Arla is investing more than 63 million euros in the future of high-protein dairy products
Demand for skyr, cottage cheese, and protein solutions is driving investment in Europe
Arla Foods is investing more than 63 million euros to expand its production capacity for Skyr and cottage cheese. With investments in Germany and Sweden, the company is strengthening two of the most dynamic categories in the European dairy market while further expanding its position in the high-quality protein solutions segment. These investments reflect the sustained high demand for protein-rich dairy products, which are increasingly becoming an integral part of a health-conscious diet. This trend is also evident in the German market, where skyr and cottage cheese, in particular, have gained significant ground in recent years.
Arla Plant in Upahl
Arla Foods
Consumers are increasingly turning to products that combine naturalness, taste, and nutritional benefits. High-protein dairy products are benefiting from this trend in particular. Categories such as skyr, cottage cheese, and quark have been growing dynamically for years and remain among the strongest growth drivers [1] in the German dairy market. High-protein products have long since moved beyond the realm of traditional sports nutrition and now appeal to a broad consumer base.
Continued Rise in Demand for Skyr
Today, Germany is one of the most important growth markets for skyr in Europe. In the first half of 2026 alone, Arla® skyr recorded volume-based sales growth of 62 percent. To meet the long-term rise in demand, Arla Foods is investing 35 million euros in the expansion of its facility in Upahl, Mecklenburg-Western Pomerania. The investment is part of a multi-year program to expand European skyr production. This move comes against the backdrop of a trend that has been evident in numerous markets for years: demand for skyr is growing faster than available production capacity. By adding capacity, Arla is laying the groundwork to support this growth over the long term and ensure a reliable supply to retailers and consumers in the future.
“Demand for skyr and other protein-rich dairy products continues to grow very dynamically. We have already invested millions this year in expanding our skyr production capacity in Germany. With the additional investment of 35 million euros in our Upahl facility that we have now announced, we are consistently continuing on this path. In this way, we are creating the conditions to meet rising demand over the long term, further stabilize supply, and continue to develop the skyr category together with our retail partners,” said Ingo Müller, Head of Arla Germany.
Cottage cheese is establishing itself as a growth category
At the same time, demand for cottage cheese is also growing. In recent years, the category has evolved from a niche product into an integral part of modern diets. Consumers particularly appreciate its naturally high protein content, its versatility, and how easily it can be incorporated into their daily lives. Against this backdrop, Arla is investing an additional 28.3 million euros in cottage cheese production in Falkenberg, Sweden—the largest cottage cheese production site in Europe.
This trend is also clearly evident in Germany. Grainy cream cheese[2] is one of the fastest-growing segments on dairy store shelves. With MILRAM, the company achieved volume-based sales growth of more than 40 percent in this segment during the first half of 2026. The category’s momentum underscores the growing importance of naturally protein-rich dairy products and confirms consumers’ continued interest in a protein-conscious diet.
Protein Expertise Across the Entire Value Chain
For Arla Foods, these investments underscore the long-term importance of high-protein dairy products and are part of a broader protein strategy aimed at meeting the rising demand for high-protein dairy products in Europe and supporting further growth in strategically important categories.
As the world’s leading supplier of whey proteins, Arla Foods is investing in high-quality protein solutions across the entire value chain. These include whey proteins, lactoferrin, and other specialized applications for sports nutrition, active lifestyles, and early life nutrition.
At the same time, the company is continuously expanding its brand portfolio. With the new Arla Skyr Drinks, additional consumption occasions in the protein-rich dairy products segment were recently created, and the Skyr range was expanded to include a ready-to-drink format.
“Consumers are increasingly looking for products that combine taste, natural ingredients, and high nutritional value. The strong growth of skyr, cottage cheese, and other high-protein dairy products shows that this is no longer just a short-term trend. That’s why we are making targeted investments in capacity, innovation, and new product concepts to support this growth over the long term,” said Ingo Müller, Head of Arla Germany.
[1] Circana, Grainy Cream Cheese, food retail stores > 200 square meters + DM, food retail stores excluding hard discount stores
[2] Circana, Chunked Cream Cheese, Top Brands in Food Retail > 200 square meters + DM, 1st Half of 2026
Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.
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