Arla Foods Ingredients to discontinue Early Life Nutrition business and increase ingredients capacity

20 Aug 2024 --- Arla Foods Ingredients (AFI) reveals the company plans to discontinue its Early Life Nutrition (ELN) B2B business within the next 19 months. AFI will partner with French cooperative and ELN ingredients producer, Sodiaal. AFI states that Sodiaal will handle all of its future ELN production needs in China, as well as AFI’s other ELN markets.

AFI reveals it will also invest in its Danish production site, Arinco — the company expects to soon outgrow the capacities of its two Danish plants — and transform it into a dedicated ingredients producer.

Arinco currently produces milk powder for AFI’s B2B ELN business and Arla’s branded ELN business, as well as other ingredients. According to AFI, the new strategic direction will expand Arinco’s capacity for its growing ingredients production but will also affect around 170 jobs, both at the Arinco plant and AFI’s headquarters in Aarhus.

“It goes without saying that this is a difficult situation and a tough day for our employees,” says Luis Cubel, AFI’s group VP and managing director. “The changes will not be fully implemented for another 19 months, and until then, we will do everything we can to retrain and find internal job opportunities for those affected.”

“The employees are highly-skilled and it is our clear ambition to retain as many of them as possible in Arla. However, redundancies will be unavoidable.”

The next 19 months

AFI says that over the span of the 19 month transition plan, it will work with customers to meet their demands before discontinuing ELN production at the Arinco plant, which is slated for termination by the end of the first quarter of 2026.

Additionally, AFI says its ELN business will gain from Sodiaal’s strong production capabilities, leveraging the company’s shared farmer ownership, integrated supply chains and production technologies.

“We see a very bright future for ingredients and a world of opportunities,” Cubel explains. “This new strategic direction will accelerate our ambitious growth plans for our ingredients production and enable AFI to further strengthen its position as a leading global player in the ingredients market.”

Market moves

The move follows a notable shift in AFI’s focus. The ingredients player recently acquired Volac’s whey business in a bid to boost its presence in the performance nutrition space.

The company also recently developed a clear, hydrating, protein water and a product to aid in glucose control for consumers with type 2 diabetes. In addition, the company has created a functional beverage for health-conscious gamers.

Nutrition Insight will continue to monitor this developing story.

By William Bradford Nichols