Desirable dairy – how innovation and agility drive sustainability at Arla

42.8% Fresh dairy

23.4%Cheese

13.0%Butter and spreads

12.9%Milk powder and

Whey proteins

7.9%Other

Our productssplit by categories

Why sustainability?• Global temperature

expected to increaseby 4 ⁰C

• World population growing for 9 billions in 2050

• By now: 7.2 billions

• Demand for dairy products are expected to double by 2050

• IPCC: 1-6 ⁰C by the end of this century

• 20% reduction in GHG emissions 1990 - 2020

• EU climate and energypackage

The global (dairy) dilemma

Full report available at:

Most important environmental impact categories for Arla Foods –calculated via Environmental Profit and Loss Accounting (E P&L)

http://eng.mst.dk/media/176132/arla-foods-epl.pdf

Sustainable Dairy Farming Strategy 2020Reducing the carbon footprint from dairy farming is an essential part of Arla’s Sustainable Dairy Farming Strategy

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Milk + rawmaterials

Processing Transport Packaging Consumer

Carbon Footprint of Arla Food’s total productionGreenhouse gas emissions ‘from cow to consumer’

mil

lio

n t

on

ne

s C

O2e

-30% per kg milk(1990-2020)

-25% in absolute numbers(2005-2020)

Activities on farm level

* Germany, Luxembourg, Netherlands and Belgium

Carbon assessments, energy assessments, farm work shops

Carbon assessment Energy assessment Farm work shops

UK 2010-2016UK 2017

2433312

--

49659

Sweden 2013 – 2016Sweden 2017

54638

34824

55-

Denmark 2013 - 2016Denmark 2017

1011179

22-

39-

Central Europe* 2013-2016Central Europe 2017

48

--

-12

Total 2010 - 2017 4533 394 661

Over 4500 carbon assessments completed in the UK, Sweden and Denmark, Arla’s farmer owners have taken a significant step towards reaching the target of reducing their carbon footprint by 30 per cent in 2020, compared to 1990. In 2017 the carbon footprint from Arla farms was reduced by 23 per cent compared to 1990. From 2017, farmers in Germany and Benelux have joined the carbon assessments

The Arla ownedOutbound Truck fleet and the fullychartered 3rd PtyTruck Fleets are now fossil-free (2018-01-01)!

Innovating sustainablyExample: Affordable nutrition for base-of-pyramid consumers

Our Research and NPD (new product development) teams work together to build on local knowledge, consumer tastes and regulatory networks to develop improved formulations for launch into a new market.

Dano Daily Pushti, is a recent launch in Bangladesh. It is produced from high quality milk ingredients. It is high in milk protein, calcium, vitamin A and vitamin D, the key ingredients for your family everyday health.

Nutritional education and sampling in schools & garment factories

Research activities in sustainable dairy farmingWhat we do today and what’s needed

Feed productionMethane (cow)Methane (manure)Nitrogen useAmmoniaDiesel (CO2)Electricity (CO2)Biogenic CO2PhosphorWaterEnvironmental footprintWaste

Future research topics linked to Arla’s sustainable dairy farming

Working in partnerships:

Thank You

Carbon footprint of 1 kg milk‘Top-down’ studies – based on national statistics

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1.0

1.2

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1990 2005 2020 1990 2005 2020 1990 2020 1990 2020

Total CF

Other

Energy (excl. feed prod.)

Feed production

Manure handling

Enteric fermentation

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0

kg

CO

2e

pe

r k

g F

PC

M

1990 2005 2020 1990 2005 2020 1990 2020 1990 2020

Sweden Denmark Germany UK

-15%-22%

-30% -30% -30%-30%

CF of milkCH4 50%N2O 30%CO2 20%

~~~

Climate impact for various beverages in Sweden

Source: Smedman et al., 2010

Greenhouse gas emissionsg

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CO

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pe

r 1

00

gra

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f b

eve

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Milk

Ora

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juice

Soy

drin

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Oat

drin

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Bot

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wat

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Sof

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Tap w

ater

Nutrient density for various beverages in Sweden

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Milk

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juice

Soy

drin

k

Oat

drin

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Red

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Bee

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Bot

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Tap w

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Source: Smedman et al., 2010

Lab scale Pilot scale Semi production scale

Towards sustainable protein supply for feed and food

Why? To cover the Danish need for protein in animal production

yield: 11.000 kg DM/ha and 2.500 kg protein/ha

4,4 mill t DM 1 mill t protein

Yearly consumption: 2,7 mill t protein

Production in DK: 1,7 mill t protein

Import: 1 mill t protein

Scenario: Clover/grass/lucerne on

400.000 ha