Arla starbucks

Starbucks has struck a 21-year licensing deal with Arla Foods to manufacture, distribute and market its range of premium ready-to-drink milk-based coffees across Europe, the Middle East and Asia.

It extends an existing seven-year partnership between the two companies. Arla said revenue from the RTD business had risen by an average of 40% per year since the partnership began in 2010.

The dairy co-op produces the range at its sites in Esbjerg, Denmark, using milk from its 11,200 farmer-owners across Europe and Starbucks’ ethically sourced 100% arabica coffee.

“This new licensing agreement signals our commitment to continue working together to grow the business within the ready-to-drink sector,” said Starbucks EMEA channel development and foodservice vice president Duncan Moir.

The partnership would combine Arla’s extensive experience in manufacturing dairy beverages and our widespread distribution network with Starbucks’ unique coffee expertise, added Arla vice president and chief marketing officer Hanne Søndergaard.

“Consumers in the EMEA region have welcomed the great taste and premium nature of the beverages, and we remain committed to working closely with Starbucks on developing and growing the category in the future.”

The announcement comes after Starbucks struck a £5.3bn licensing deal with Nescafé and Nespresso owner Nestlé last month, allowing it to sell and distribute Starbucks’ consumer packaged goods and foodservice products. The agreement gave Nestlé the rights to use the Starbucks brand on Nestlé’s single-serve capsule systems such as Nespresso and Nescafé Dolce Gusto.

In January, rival Costa also extended its pre-existing supply partnership with Alpro, which saw the coffee chain launch a new range of coconut milk-based drinks.

Read next: How will Nestlé and Starbucks’ coffee deal affect the two brands in the UK?