Arla Foods Annual Report 2020
RESPONSE
TREND
Management Review Our Strategy Our Brands and Commercial Segments Our Responsibility Our Governance
Our Performance Review
Our Consolidated Financial Statements
Our Consolidated Environmental, Social and Governance Data
EMBRACING CHANGE: MAJOR TRENDS
AND STRATEGIC RESPONSES (CONTINUED)
LONG-TERM TRENDS
ACCELERATING SUSTAINABILITY AGENDA
With the strong commitment to the Sustainable Development
Goals from governments and businesses across the world, there is
an increased focus on finding solutions to the world's most
pressing issues. The latest UN reports highlight the severity of
climate change, and the new President of the USA has expressed
his aim to recommit to the Paris Agreement and ramp up global
climate ambition. Consumers are also increasingly looking for
sustainably produced products. Recent studies show that 35 per
cent of global consumers are willing to trade up for a sustainable
product ¹).
INCREASING WORLD POPULATION
By 2050, the world population is expected to have increased
to 9.7 billion people 2). Half of the growth is expected to
occur in Africa, and Asia is expected to be the second largest
contributor with 0.9 billion people. Especially the middle class
is growing rapidly in Asia and moderately in Africa. The rapidly
growing world population will challenge the global food
supply.
INCREASING ONLINE CHANNEL
AND DIGITALISATION
Covid-19 has accelerated the channel shift towards e-commerce
and discounters across countries and categories. Online
consumer bases have increased on average by 30 per cent in
food and household categories across markets ³). In addition to
the e-commerce trend, digitalisation is swiftly penetrating all
other business areas, putting increasing pressure on Arla's
speed of adaptation to stay competitive.
In Arla, we want to be part of the solution driving the
sustainability agenda in the dairy industry and
creating value through sustainable dairy. We have set
the bar high with our Stronger Planet - Stronger
People strategy and an ambition of becoming carbon
net zero by 2050, and we constantly challenge
ourselves to find new ways of accelerating our
sustainability journey.
As a part of our Stronger Planet - Stronger People
sustainability strategy, Arla is committed to be part
of the solution of feeding the world. We have strength-
ened our focus on offering affordable nutrition in
selected international markets, e.g. our affordable and
healthy nutrition for infants and toddlers, Baby&ME
organic, was introduced in emerging markets in the
Middle East. We also support local dairy development
in emerging markets.
In Arla, we have responded quickly to the accelerated
digital trends. Building on our strong partnerships in the
grocery sector, we have launched various initiatives in
e-commerce, including investments in technology across
e-commerce sales and digital marketing. Our ambition is
that 10 per cent of sales across Europe come from online
by 2025. We have also launched significant initiatives
within supply chain and core business processes, for
example digital robots and artificial intelligence.
19 ARLA FOODS ANNUAL REPORT 2020
1) McKinsey 2017-2020 Global Sentiment Survey
2) UN World Population Prospects 2019
3) McKinsey & Company Covid-19 consumer pulse survey, March-September 2020View entire presentation