The European dairy cooperative Arla performed robustly overall in the first half of 2025. Price increases, targeted investments, and sustainability measures shaped business development. Geopolitical uncertainties and high raw material costs continued to shape the market environment. In June 2025, Arla and the DMK Group gave the green light for a merger. The aim is to pool expertise in the cooperative sector in order to respond jointly to the challenges of the global dairy market. Regulatory authorities are expected to complete the approval process in the first half of 2026.
Sales and profit development at Arla
In the first half of the year, the Arla Group generated sales of €7.5 billion. Net profit amounted to €158 million, which corresponds to a profit margin of around 2.1 percent. The milk price averaged 57.5 cents per kilogram, including additional payments and capital contributions. Volume-based sales growth in the branded business declined by 1.5 percent. “As we mark our 25th anniversary, Arla Food’s ability to maintain a solid performance in a volatile market clearly demonstrates the strength of our cooperative model and the dedication of our farmer-owners and colleagues. Our performance in the first half of 2025 reflects our ongoing commitment to healthy, sustainable dairy and to creating value for all those who depend on Arla Foods,” says Peder Tuborgh, CEO of Arla Foods.
Arla recorded a decline in brand sales due to consumer restraint
Price adjustments and economic uncertainties caused the decline in branded product sales. This was due to price adjustments and economic uncertainties that influenced consumer purchasing behavior. At the same time, individual brands such as Arla Skyr remained on a growth trajectory, particularly through new variants and a stronger market presence.
Positive business development in Europe
European business increased sales by 10.9 percent to €4.27 billion in the first half of 2025. Higher retail and food service prices mainly drove this development, which offset increased raw material costs. At the same time, volume-based growth declined slightly due to the high price level, particularly in the area of full-fat products. Other product categories, on the other hand, recorded stable to growing sales volumes.
International markets show mixed dynamics
Arla grew slightly in its international business. Sales rose by 0.9 percent to €1.21 billion in the first half of 2025. Higher prices drove this development, while negative currency effects, particularly from the US Dollar, had a counteracting effect. Several regions achieved stable to increasing sales volumes. Growth in other regions offset the declines in individual markets, for example due to regulatory adjustments or portfolio streamlining.
Investments at Arla strengthen global production structure
In the first half of the year, investments totaling several hundred million Euros were initiated, including in the United Kingdom, Denmark, Sweden, and Bahrain. These measures are aimed at expanding capacity and increasing security of supply. The total investment for 2025 is estimated at 650 to 700 million Euros. “Arla Foods’ high level of investment decisions in the first half of 2025 is a clear demonstration of our commitment to long-term resilience and reliability. By strengthening production and supply capabilities, we continue to play an important role in safeguarding food security and ensuring a steady supply of high-quality dairy products for customers and communities across our markets,” says Peder Tuborgh.
Sustainability: Arla expands customer partnerships
The further development of the FarmAhead platform and new customer collaborations in Denmark underpin the goal of reducing emissions on farms. Over four billion kilograms of milk were covered by the program in the first half of the year, representing progress toward the goal of reducing emissions by 30 percent per kilogram of milk by 2030. “By working closely with our customers and farmer-owners, Arla Foods is able to support meaningful progress on climate action and sustainability in the dairy sector. These partnerships help us create practical solutions and deliver value across the entire value chain,” explains the CEO.
Arla raises forecast for brand sales slightly
Moderate sales growth is expected in the branded segment in the second half of the year. The forecast for the full year has been raised to volume-based sales growth of between minus 0.5 and plus 0.5 percent. Total sales are expected to be between €14.7 and €15.2 billion. The profit margin is still expected to be within the target range of 2.8 to 3.2 percent.
