Demand for high-protein dairy products has outpaced capacity. Arla is now investing in expanding its dairies in Germany and Sweden.

Arla Foods is expanding. The cooperative is investing a total of DKK 474 million to increase production of skyr and cottage cheese at two of its dairies, Arla writes in a press release.

At the dairy in Upahl, Germany, skyr production will be expanded at a cost of DKK 262 million, while DKK 212 million will be invested in increased capacity and modernisation at the dairy in Falkenberg, Sweden, Europe’s largest cottage cheese production site.

Demand is outpacing capacity
According to Arla, sales of skyr in European markets have risen by more than 33 percent in volume terms over the past three years, while cottage cheese sales have grown by 25 percent across Arla’s markets.

Arla stresses that in several markets, demand has for some time grown faster than production capacity has been able to keep up with. Since 2023, the company has invested DKK 381 million in skyr capacity and efficiency improvements at dairies in Denmark, Germany and Sweden, and the Upahl investment comes on top of this. In cottage cheese, Arla has invested DKK 255 million in Sweden since 2025 and earlier this year acquired the Australian cottage cheese producer Brancourts.

“Consumer eating habits are changing, and more people are looking for high-protein products that also taste good and are easy to use in everyday life,” says CEO Peder Tuborgh.

According to Arla, several dairies in the industry are also investing in additional capacity to keep up with demand.

By Camilla Waldmann
Photo: Arla Foods