| Denmark

Arla Foods to invest $43m to meet rising on-the-go coffee demand

Danish dairy cooperative Arla Foods is investing $43m to expand its Esbjerg production facility to meet increased demand for on-the-go cold coffee beverages, after sales of its Starbucks ready-to-drink (RTD) products increased by 34% last year

Sales of Arla Foods' Starbucks-branded coffee products rose 34% by volume in 2021 | Photo credit: Starbucks


 

Danish dairy company Arla Foods is to invest $43.3m to expand its Esbjerg production plant to meet growing global demand for on-the-go chilled coffee beverages. 
 

The company, which makes and markets drinks for Seattle-based coffee chain Starbucks, said that the expansion will increase production capacity by approximately 20%, whilst also expand packaging lines and cooling areas at the dairy plant. 


In June 2018, Arla Foods extended an agreement with Starbucks to manufacture, distribute and market the chain’s milk-based ready-to-drink (RTD) coffee beverages for the Europe, Middle East and Asia (EMEA) region. The companies have been working together since 2010. 


Upon signing the extension in 2018, Arla Foods said Starbucks' RTD business had grown by 40% annually in the EMEA region since 2010. 


In February 2022 Arla Foods announced that sales of its Starbucks-branded coffee products rose almost 34% in volume in 2021. Sales increased 27.3% the year previously, highlighting increased at-home coffee consumption during several Covid-19 lockdowns around the world. 


Starbucks has a similar agreement with Swiss food and beverage giant Nestlé, which distributes Starbucks’ RTD coffee products across Southeast Asia, Oceania and Latin America as part of a $7.1bn Global Coffee Alliance agreement. 


Nestlé reported that Starbucks-branded retail coffee products achieved 15.5% year-on-year growth over a nine-month period in 2021 to reach $2.4bn across 79 markets. 


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