The trends, technologies and products that will shape the worldwide dairy category in the future will be created hand-in-hand with chefs, scientists, consumers and customers at Arla Foods’ new state-of-the-art global innovation center, built in the heart of one of the world’s fastest growing food clusters in Aarhus, Denmark.
Arla has put open innovation at the centre of its growth plans for the next decade. The dairy farming cooperative aims to be the most collaborative innovator in the USD 400 billion global dairy market, and has kick-started this ambition with its new innovation center in Aarhus, which is officially opened on May 16 by Her Royal Highness Crown Princess Mary of Denmark.
Arla’s new innovation center will play a pivotal role in the company’s collaboration with its customers and will play a central part in Arla’s pursuit of its strategy, Good Growth 2020, by adding more value-added products to Arla’s markets around the world. Arla will also work with scientists and universities on research within a number of areas such as dairy farming, prevention of lifestyle diseases, innovative packaging and technologies that can make it easier to transport milk and fresh dairy products across continents.
Today, Arla products are sold in over 100 countries around the world, with the Group’s biggest markets being UK, Germany, Sweden, Denmark and with long-term strategic growth ambitions in four emerging markets outside the EU. By 2020, Arla plans to grow its branded sales in the Middle East and North Africa, USA, Sub-Saharan Africa as well as China and Southeast Asia. Already the world’s biggest producer of organic dairy products, Arla has also set out to further expand its global organic dairy sales by 2020.
“As a dairy cooperative, we are built on farmers getting together in the 1880s to create better opportunities together. It is in our DNA to collaborate to achieve better results. Our new global innovation center will apply that same approach to our research and development of not just new products but also new ways to consume them. The global food industry has never been more competitive than it is today – especially in Europe and across the emerging markets with its booming middle class of consumers in Asia, Africa and beyond. The best innovator wins,” says CEO of Arla Foods, Peder Tuborgh.
Building a world-leading food cluster
Arla’s new innovation centre is situated in a cluster of food industry companies and research centres in the European Culture Capitol of 2017, Aarhus, Denmark, which has set out to become the ‘Silicon Valley’ of food development and innovation.
“By securing a location in the midst of one of the world’s strongest and most ambitious food clusters, Arla will gain much better opportunities to strike new partnerships and alliances. And we are confident that our new global innovation centre will accelerate and drive the environment and become the beacon that will attract even more international companies and research institutes. It will be a huge asset for us and the entire Danish food cluster,” says Senior Vice President of Research & Development in Arla, Sven Thormahlen.
He emphasises that Arla’s innovation model has a strong competitive edge compared to other international food companies, because Arla is a cooperative owned by 12,000 dairy farmers in seven European countries, which means the company can control the entire value chain and apply its innovation approach from farm to fork.
“Farming and processing are combined every step of the way. All our products contain as few and as natural ingredients as possible and our systematic approach to health is an integral part of our collaborations with universities and in our product innovation. Everyone is focused on, how we can help people live healthier lives and give as many people as possible access to natural, nourishing dairy products.”
Food retailers can taste and co-create the foods of the future
With the new global innovation centre, Arla’s innovation processes will take place at a vastly accelerated pace thanks to the advanced in-house dairy test plant, which can quickly test new ideas and flavours.
A quicker route from idea to finished product is expected to be of high strategic value to many of Arla’s food retailers and foodservice customers across Europe, USA, Asia and the Middle East, where innovative edge is a key differentiator to driving up market shares in any food category.
“Arla serves retail and foodservice customers around the world, and we are very excited to offer our customers a greater involvement in the innovative process. We believe in open innovation, and our new facility sets the perfect stage for that kind of collaboration,” says Peder Tuborgh.
A crucial part of Arla’s growth ambitions
As a company, Arla has grown by more than 50 per cent since 2010 through strong brand building in the dairy aisle and a series of mergers and acquisitions. It is the world’s 4th largest dairy company and owned by 12,000 dairy farmers in Denmark, Sweden, UK, Germany, Belgium, the Netherlands and Luxembourg. Now the company is eyeing significant value-creation in its key European business as well as on key strategic markets outside the EU by 2020.
“We have set high ambitions for our business in the coming years, because we believe and see that demand is growing worldwide for natural dairy products that help people make good food choices. We are investing heavily in innovation to respond to this global demand and to create better returns for our farmer-owners. The work that will take place at our new innovation centre is crucial to us achieving our goals,” says Peder Tuborgh.
Arla’s new innovation centre will employ 150 specialists from different parts of the world.
Facts about the Arla Innovation Centre:
- The functions of the building: The building consists of a small and compact dairy pilot plant, a wide range of laboratories, the Consumer House, the Customer Collaboration Lab and modern office facilities designed to support creativity and cross-functional projects.
- Sustainability: The Arla Innovation Centre is designed as a carbon neutral building, excluding the process areas. The building also meets the requirements of the Low Energy Building Class 2020 stipulated by the Danish building regulations. Moreover, water saving fixtures are installed throughout, and the building has a total of 525 m2 solar cells on the roof for the production of renewable energy.
- Agro Food Park:Agro Food Park, in Aarhus’ Skejby district, is a fast-growing innovation ecosystem for the international agriculture and food industry. Currently, 75 companies and institutions, e.g. Food Universe, Food Observatory, Business Incubator, Foodture lab (gastronomic lab) and the Food Faculty at Aarhus University, employ a total of more than 900 employees. Agro Food Park provides a unique opportunity for collaboration and interaction between companies, entrepreneurs, institutions and investors – perfect conditions for growth.