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Starbucks signs 21-year RTD partnership with Arla Foods

Licensing agreement extends existing partnership between the firms to manufacture, distribute and market Starbucks premium milk-based ready-to-drink (RTD) coffee beverages for the EMEA region

The deal will see the two companies working together until 2039, after the existing partnership, which was struck in 2010, was extended.

Arla Foods reports that Starbucks’ RTD business grew by an average of 40% per year across the EMEA (Europe, Middle East and Africa) region during the initial phase of the partnership, a figure that was confirmed by Starbucks vice president channel development and foodservice, EMEA, Duncan Moir.

“The strength of our relationship with Arla Foods over the past seven years has seen our RTD business grow by an average of 40% per year across EMEA. This new licensing agreement signals our commitment to continue to work together to grow the business within the ready-to-drink sector, and we are proud to be working alongside Arla Foods,” he said.

The deal will continue to focus on Starbucks’ milk-based RTD products, a segment that Arla has identified as an important focus for its business strategy. Part of the firm’s ‘Good Growth 2020’ plan includes the ambition to be “a leading provider of milk-based beverages in Northern Europe, The Middle East, Asia and Northern Africa in 2020” according to Executive Vice President, Hanne Søndergaard.

“The partnership combines Arla’s extensive experience in manufacturing dairy beverages and our widespread distribution network with Starbucks unique coffee expertise. Consumers in the EMEA region have welcomed the great taste and premium nature of the beverages, and we remain committed to working closely with Starbucks on developing and growing the category in the future,” he added.

Arla Foods, which is owned by some 11,200 dairy farmers who produce the company’s milk, reportedly expects to sell more than 110 million Starbucks products, which include its RTD Frappuccino range, in the EMEA region per year.

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