The UK’s largest dairy cooperative, Arla Foods, has announced a significant extension of its strategic partnership with XPO Logistics. The agreement centres on the development of a new Central Distribution Centre (CDC) designed to consolidate the dairy giant's entire UK chilled palletised network into a single, future-ready hub.
Currently under development at Prologis RFI DIRFT in Northamptonshire, the facility is scheduled to become operational in late 2027. XPO Logistics has been appointed to project manage the build and will subsequently operate the site.
Operational Consolidation and Efficiency
The new facility represents a strategic shift towards a centralised logistics model. Once active, the CDC will handle all of Arla’s UK chilled palletised products—including cheese, butter, and yoghurts—moving away from a fragmented network.
Key Strategic Objectives:
Resilience: Strengthening the supply chain against disruption through automation and temperature-controlled infrastructure.
Sustainability: Reducing total road miles by optimising distribution routes from a central location.
Efficiency: Streamlining the handling of fresh dairy to ensure faster throughput to retailers.
Fran Ball, SVP UK Supply Chain for Arla Foods UK, commented on the logistical logic:
“Consolidating our chilled pallet operations into a single, advanced facility in Northamptonshire is a strategic leap forward for Arla. By partnering with XPO Logistics and Prologis, we are improving the resilience of a critical part of our supply chain and making meaningful progress on reducing waste and road miles.”
Facility Specifications and Sustainability
The next-generation facility is designed to meet high environmental standards, targeting BREEAM Outstanding and EPC A+ ratings. It will feature advanced automation to manage the high-velocity requirements of the chilled dairy category.
Phil Oakley, SVP at Prologis UK, noted the site's role in the regional economy: “Partnerships and developments like this play an important role in creating long term economic value for West Northamptonshire... At Prologis RFI DIRFT, we’ve built a community with the capacity and skills to support high-performing logistics operations like this one.”
Investment Context
This infrastructure project follows a period of heavy capital expenditure for Arla in the UK. The announcement comes on the heels of a €107.7m (£90m) investment at the Arla Lockerbie site to create a centre of excellence for UHT and lactose-free milk.
Collectively, these projects build on more than €355m of UK investments announced in 2024, reinforcing Arla's commitment to British manufacturing.
Dan Myers, Managing Director – UK and Ireland at XPO Logistics, stated:
“This future ready CDC will play a key role in ensuring that Arla continues to deliver great products whilst improving the resilience, sustainability, and efficiency of Arla’s supply chain. Working together, we’re driving positive strategic change which will support Arla’s business to continue to prosper today and tomorrow.”
Bas Padberg, Managing Director of Arla Foods UK, added: “Today’s announcement further signals our commitment to driving change in the UK, and supporting the future of British dairy. The UK food sector has a vital role in public health, and we’re committed to delivering nutritious, affordable dairy for more people.”
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