Arla Foods invests more than US$73.5M to expand skyr, cheese production

EUROPE – Arla has announced an investment of more than US$73.5 million (EUR 63 million) to expand skyr and cottage cheese production, as demand for high-protein dairy continues to grow.

This includes a US$40.8 million (EUR 35 million) investment in skyr production in Upahl, Germany, and a US$33.0 million (EUR 28.3 million) investment in cottage cheese production in Falkenberg, Sweden.

Across Europe and beyond, consumers are increasingly looking for tasty, practical foods that fit an active lifestyle and a balanced diet, according to the company.

The trend is reflected in strong growth across both categories. Over the past three years, skyr volumes have grown by more than 33% across Arla’s European markets, while cottage cheese volumes have increased by 25% across Arla’s markets over the same period.

“Consumer preferences continue to evolve, and we see growing demand for products with high-protein combined with convenience and great taste. Dairy products such as skyr and cottage cheese continue to resonate with consumers across many markets, and these investments reflect our ambition to make these products available to more people,” said Peder Tuborgh, CEO of Arla Foods.

Expanding capacity in one of dairy’s fastest-growing categories

Originally rooted in Nordic dairy traditions, skyr has become one of the fastest-growing dairy categories across Europe, appealing to consumers seeking protein-rich foods.

To support this growth, Arla is investing US$40.8 million (EUR 35 million) in additional production capacity at its site in Upahl, Germany, as part of its broader European skyr network.

The investment will help Arla meet growing demand and continue developing the category across markets.

The investment builds on a multi-year effort to expand Arla’s ability to serve growing consumer demand for skyr, which has consistently grown faster than available production capacity across several markets.

Since 2023, Arla has invested $59.4 million (EUR 51 million) to increase skyr capacity and efficiency at our dairies in Denmark, Germany and Sweden.

Cottage cheese continues its remarkable growth journey

Arla is also investing US$33.0 million (EUR 28.3 million) in its Falkenberg dairy in Sweden, Europe’s largest cottage cheese production site.

The investment supports a category transformed in recent years as consumer preferences have shifted toward protein-rich foods.

Once considered a niche product, cottage cheese has become one of the clearest beneficiaries of the global nutrition trend.

Consumers are increasingly incorporating cottage cheese into everyday meals and snacks, drawn to its versatility, taste, and nutritional profile.

In the last year, market growth has ranged from 13 % in Sweden to 37% in Denmark and the UK, and 38% in the Netherlands.

Arla is the largest branded supplier of cottage cheese across its European markets, driven largely by its strong presence in Sweden and Denmark.

The investment in Falkenberg will help Arla meet the growing demand both in Sweden and other European markets.

The Falkenberg investment is the latest step in Arla’s broader expansion of its cottage cheese business.

Since 2025, Arla has invested EUR 34 million in cottage cheese production in Sweden and expanded internationally by acquiring Australian cottage cheese producer Brancourts earlier this year.

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