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Arla targets Chinese cheese demand with innovation investment

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By Mark Astley+

Last updated the 29-Apr-2014 at 14:24 GMT

Arla Foods has ploughed DKK10m ($1.86m, €1.34m) into the development of an innovation lab in Beijing to support the development of "unique" cheese for China.

The facility, established at the existing China-Denmark Milk Technology Cooperation Centre developed by Arla and its Chinese strategic business partner Mengniu, was opened late last week by the Prince Consort of Denmark.

Four people, including cheese makers and innovation specialists from Denmark and China, will initially work in the lab. 

The team will work with customers, consumers and Mengniu to launch new cheese products "exclusively developed and produced for Chinese consumers," said Arla.

“We aim to take the lead in the cheese category in China, and building a cheese lab is a key step in creating long-term collaboration with our customers and consumers – a place where we can do-create and innovation in an agile and dynamic manner,” said senior vice president of Arla Foods, Frede Juulsen.

"Unique taste for cheese"

As well as European-manufactured UHT milk and milk powder, Arla currently exports cheese into China.

But with a "unique taste for cheese" developing in China, Arla decided it was time to look for inspiration in the country, said Juulsen, who is responsible for the Arla business in China.

“It’s all about developing the next blockbuster product for the Chinese dairy market,” he said.

“Our first focus will be to create the right kind of cheese products that will make more Chinese consumers love cheese in new and different ways."

“But it must be done in a way that respects and contributes to the food trends developing in China, and therefore we are placing this innovation lab in Beijing," he added.

"Localisation" of concepts

Under its latest five-year growth plan, Strategy 2017, Arla intends to increase its focus on four emerging markets - Russia, the Middle East, Africa and China.

Prior to identifying China has an area of focus, Arla increased its presence in the country through a deal to become an indirect shareholder of Mengniu in June 2012.

Through the agreement, Arla gained greater access to sales and distribution channels in the country, and outlined plans for the China-Denmark Milk Technology and Cooperation Centre. 

Since then, Arla Foods has also revealed plans for a global innovation centre in Denmark to support the increasingly important "localisation" of its dairy product concepts.

It said at the time that "satellite centres" would be established in China, Russia, the Middle East and Africa.

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