Arla Foods said its brands were boosted by returning consumers in the second half of 2023 but it reported flat sales for the year as a whole.

Reporting its 2023 results today (20 February), the farmer-owned cooperative said consumer sentiment improved throughout the year and it expects that positive momentum to continue in 2024.

CEO Peder Tuborgh, speaking in a post-results press conference, said: “The second half of the year was different to the first. The consumer market is in much better balance and we have seen significant growth in our brands come back again.”

The Lurpak, Castello and Arla brands owner reported 2023 revenues of €13.7bn ($14.75bn), roughly the same level as its 2022 figure of €13.8bn.

Sales were flat in the first half of the year as cash-strapped consumers opted for discounted products.

However, Arla’s reported “strategic branded volume driven revenue” fell 6% in the first half but grew 4.1%. in the second six months of the year.

“We have navigated a deflated and volatile global dairy market as well as headwind from several currencies,” Tuborgh said.

“While we anticipate continued volatility on multiple levels, our strong performance in the second half of 2023 makes us face 2024 with great confidence.”

In 2023, Arla achieved a net profit of €380m, or 2.8% of revenue, which is at the bottom end of its target range of 2.8-3.2%.

CFO Torben Dahl Nyholm said revenue growth in European markets was mainly based on pricing efforts implemented in late 2022.

Tuborgh said, more generally, Arla’s price increases were “limited” in 2023 compared to the cost inflation it had seen and suggested “it is much more in balance now”.

He added: “Consumers are coming back to the brands. It is getting much more normal now between brands, discounted and retailer [products].”

Questioned on whether second-half revenue growth was based on price discounting, Tuborgh said Arla’s promotions were “more back to normal levels now”.

Asked by Just Food about the performance of its plant-based range Jörđ, launched in 2020 and recently re-branded as Arla Jörđ, Tuborgh said: “It is still very early days. It is relatively small.”

For 2024, Arla is guiding revenue growth of between 1.0% and 3.0%, up from -2.0% to 1.0% predicted in August. It points to a revenue total of €13.2bn to €13.7bn, the same as in previous guidance,