Arla Foods is investing more than €63 million to expand production of skyr and cottage cheese in Germany and Sweden, as demand for high-protein dairy products continues to grow across European markets.
The farmer-owned dairy cooperative will invest €35 million to expand skyr production at its Upahl site in Germany and €28.3 million to increase cottage cheese capacity and modernise its Falkenberg dairy in Sweden. Commercial production from the new skyr capacity is expected to begin in the second half of 2028, while the cottage cheese project will be completed progressively through 2028.
Skyr and Cottage Cheese Demand Accelerates
Arla reported that skyr volumes across its European markets have increased by more than 33% over the past three years, while cottage cheese volumes have risen by 25% across its markets during the same period.
The company said consumers are increasingly looking for foods that combine high protein with convenience and taste, positioning skyr and cottage cheese as everyday options rather than niche products.
The latest investment builds on Arla's earlier expansion programme. Since 2023, the company has invested €51 million to increase skyr capacity and efficiency across dairies in Denmark, Germany and Sweden. It has also invested €34 million in cottage cheese production in Sweden since 2025 and acquired Australian cottage cheese producer Brancourts earlier in 2026.
Cottage Cheese Moves Beyond Its Traditional Niche
Arla said cottage cheese has benefited from the broader consumer shift towards protein-rich foods and is increasingly being used across meals and snacks.
Market growth during the past year has ranged from 13% in Sweden to 37% in Denmark and the UK and 38% in the Netherlands, according to figures cited by the company.
Arla CEO Peder Tuborgh said the investments are intended to meet growing demand while creating greater value from milk supplied by the cooperative's farmer owners.
The expansion highlights a broader shift in the European dairy market, where protein-rich and convenience-oriented products are attracting investment in both processing capacity and product development.
Source: Dairynews7x7 02 Oct, 2026 Read full story here
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