Arla Foods forecasts 2025 decline in branded volume growth despite strong 2024 performance

DENMARK – Arla Foods expects a decline in a key volume metric for 2025 following a year of strong financial performance.

The dairy cooperative reported a rise in revenues and profits in 2024, with strategic branded volume-driven revenue growth reaching 3.7% for the year.

Revenues climbed to €13.8 billion (US$14.39 billion) from €13.7 billion in 2023, while net profit increased to €401 million from the previous year’s €380 million.

According to the company, revenue for 2025 is projected to range between €14.5 billion and €15.3 billion, supported by continued high dairy prices.

However, Arla Foods expects these prices, alongside consumer uncertainty, to exert pressure on its branded volume-driven revenue growth.

The company forecasts a decline in this metric by 1-2% as supply and demand dynamics influence the market throughout the year.

Arla is targeting a profit share between 2.8% and 3.2% after recording a 2.9% profit share in 2024.

A report by analtsts indicated that Arla aims to achieve efficiencies valued between €90 million and €110 million in 2025, following the €131 million realized in 2024.

When asked whether these cost-saving measures would result in job cuts or factory closures, an Arla spokesperson stated, “Efficiencies do not necessarily mean job reductions or plant shutdowns.”

In July, the company had announced its decision to shut down a UK creamery after failing to secure a buyer.

The previous month, Arla revealed plans to increase investment in the UK, raising its total expenditure in the region to over £300 million (US$377.6 million) in 2024.

The company has also been pursuing expansion opportunities outside Europe.

In October, Arla expressed interest in growing its presence in Egypt by submitting a non-binding offer for a majority stake in the Egyptian firm Arabian Food Industries, commonly known as Domty.

Commenting on this move, a company official remarked, “We see potential in strengthening our footprint in the Egyptian dairy sector.”

Despite the projected decline in branded volume-driven revenue growth, Arla maintains that its long-term strategy remains focused on value creation and market expansion.

The company continues to monitor evolving market conditions while positioning itself for sustained growth.

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