Arla Foods acquires Yeo Valley Dairies

Arla Foods acquires Yeo Valley Dairies
Image courtesy of Arla Foods

Arla Foods has gained the rights to use the Yeo Valley brand in milk, butter spreads and cheese after acquiring subsidiary Yeo Valley Dairies.

The Yeo Valley yogurt, ice cream, cream and desserts business will continue to be run independently through Yeo Valley Group, which remains under the ownership of the Mead family.

Tomas Pietrangeli, Arla Foods MD, said: “The potential for future investment in range through this licensing agreement with Yeo Valley provides a significant opportunity to offer a greater choice to consumers at attractive prices.

“Our ambition is to encourage customers to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across dairy categories.”

With one in four households now purchasing organic products, there is opportunity for the dairy sector to convert more of its customers from standard to organic dairy.

To fuel this growth and meet the growing needs of consumers requires investment in innovation and range and under both the Yeo Valley brand and Arla brand.

“Arla Organic Free Range milk has driven 60% of all the growth within the organic milk category in the last 12 months, with 70% of all Arla Organic Free Range milk sales attributable to customers who would have not previously purchased organic milk,” Pietrangeli added.

“Through the licence to use the Yeo Valley brand, we believe that we can further drive organic penetration of the milk market.”

Tim Mead, organic farmer and custodian of Yeo Valley, said: “Arla’s farmer-owned credentials are aligned to the values and ethos that the Yeo Valley brand is based on – “Supporting British Family Farms”.

“We have a long-held ambition to grow organic dairy in the UK, because at Yeo Valley, we believe that organic dairy is better for the planet, for the cows and for health.”

Currently in the UK, only 4% of milk sold in the UK fresh milk market is organic, which compares with far greater shares of organic in the milk market in Germany (10%), Sweden (16%) and Denmark (29%).

“This is a great chance for us to catch up with our European neighbours” said Pietrangeli.

“Organic milk has a key role to play as consumers increasingly look for ways to make their diets healthier. Its production without the use of artificial or manufactured herbicides and fertilisers and with high standards of animal welfare are key reasons it is in growth, especially with younger consumers.

“Arla is working with industry bodies to continue to help consumers understand the additional benefits that come with organic milk.”

Completion of the transaction will take place following merger approval by the UK Competition and Markets Authority.