176 S. Bolwig et al.
a small number of large farms. According to Statista (2018), the number of
Danish dairy farms decreased by almost 50% (from 6,253 to 3,293 farms) in
the period 2005–2016. In 2010, approx. 4,100 dairy farmers each had an
average of 127 cows and a milk quota of 1,142 tonnes (Danish Agriculture &
Food Council, 2018), which made the Danish dairy sector among the largest
and most modern in Europe.
Danish dairies are strongly export oriented and two- thirds of the total
Danish milk pool go into export products, placing Denmark among the
world’s top five exporting nations (Danish Dairy Board, 2018b). The historical focus of Danish agriculture on export markets (butter and bacon to the
UK) has enabled the specialisation and growth of the dairy industry, generating increasing volumes of side streams. The value of all Danish dairy exports
equals C1.8 billion annually (Danish Agriculture & Food Council, 2018),
representing more than 20% of all Danish agricultural exports (Danish Agriculture & Food Council, 2018). The largest export market for Danish dairy
products is the EU. Exported dairy products are mostly cheese, preserved
milk products and butter. The domestic market is mainly covered by
domestic dairy production (Danish Agriculture & Food Council, 2018). The
market share of imported milk is modest.
9.4.1 Arla Foods
Arla Foods is part of the Arla Group, which has its headquarters in Denmark.
It is Europe’s largest dairy group and the fourth largest in the world in terms
of milk intake (Hansen, 2018). It is owned by 11,262 milk producers across
seven European countries, most of them in Sweden (2,780), Denmark
(2,675), Germany (2,327) and the UK (2,395) (Arla, 2017). In total, Arla processes 13,937 million kg of milk, of which 35% comes from Denmark, 23%
from the UK and 13% from Sweden and Germany respectively (ibid.).
Arla’s journey began back in 1882 when the first Danish dairy cooperative
was established, while farmers in Sweden set up their first cooperative in
1881, calling it Arla Mejeriforening (Arla Foods Ingredients, 2018a). The
dairy cooperative movement quickly took off and in 1890, there were 900
cooperative dairies in Denmark, and 10 years later the number had reached
1,000. The cooperatives grew in size and scope throughout the 20th century
and in 1970, four large cooperatives and three individual dairy farmers formed
Mejeriselskabet Danmark (MD). The creation of MD required the construction of a more professional organisation to include modern strategic and functional management. MD was continuously developed through mergers and
growth in the following two decades, resulting in the establishment of the
more internationally oriented MD Foods in 1988. In 2000, MD Foods and
Swedish Arla merged and changed their organisation’s name to Arla Foods.
At the time, the two companies processed 90% of the Danish and 66% of the
Swedish milk pool respectively.
a small number of large farms. According to Statista (2018), the number of
Danish dairy farms decreased by almost 50% (from 6,253 to 3,293 farms) in
the period 2005–2016. In 2010, approx. 4,100 dairy farmers each had an
average of 127 cows and a milk quota of 1,142 tonnes (Danish Agriculture &
Food Council, 2018), which made the Danish dairy sector among the largest
and most modern in Europe.
Danish dairies are strongly export oriented and two- thirds of the total
Danish milk pool go into export products, placing Denmark among the
world’s top five exporting nations (Danish Dairy Board, 2018b). The historical focus of Danish agriculture on export markets (butter and bacon to the
UK) has enabled the specialisation and growth of the dairy industry, generating increasing volumes of side streams. The value of all Danish dairy exports
equals C1.8 billion annually (Danish Agriculture & Food Council, 2018),
representing more than 20% of all Danish agricultural exports (Danish Agriculture & Food Council, 2018). The largest export market for Danish dairy
products is the EU. Exported dairy products are mostly cheese, preserved
milk products and butter. The domestic market is mainly covered by
domestic dairy production (Danish Agriculture & Food Council, 2018). The
market share of imported milk is modest.
9.4.1 Arla Foods
Arla Foods is part of the Arla Group, which has its headquarters in Denmark.
It is Europe’s largest dairy group and the fourth largest in the world in terms
of milk intake (Hansen, 2018). It is owned by 11,262 milk producers across
seven European countries, most of them in Sweden (2,780), Denmark
(2,675), Germany (2,327) and the UK (2,395) (Arla, 2017). In total, Arla processes 13,937 million kg of milk, of which 35% comes from Denmark, 23%
from the UK and 13% from Sweden and Germany respectively (ibid.).
Arla’s journey began back in 1882 when the first Danish dairy cooperative
was established, while farmers in Sweden set up their first cooperative in
1881, calling it Arla Mejeriforening (Arla Foods Ingredients, 2018a). The
dairy cooperative movement quickly took off and in 1890, there were 900
cooperative dairies in Denmark, and 10 years later the number had reached
1,000. The cooperatives grew in size and scope throughout the 20th century
and in 1970, four large cooperatives and three individual dairy farmers formed
Mejeriselskabet Danmark (MD). The creation of MD required the construction of a more professional organisation to include modern strategic and functional management. MD was continuously developed through mergers and
growth in the following two decades, resulting in the establishment of the
more internationally oriented MD Foods in 1988. In 2000, MD Foods and
Swedish Arla merged and changed their organisation’s name to Arla Foods.
At the time, the two companies processed 90% of the Danish and 66% of the
Swedish milk pool respectively.