Arla expands skyr and cottage cheese production

Arla Foods is investing €63 million over the coming years to expand production capacity for skyr and cottage cheese (hüttenkäse) to meet growing demand for these protein-rich products.The additional investment will be spread across two locations. In Upahl, Germany, €35 million is being allocated to expand the skyr production line. This comes on top of the €51 million Arla has been investing since 2023 to increase production of the dairy product. Sales of skyr in Europe have grown by more than 33% since 2023, and demand continues to exceed supply.Demand for cottage cheese is also rising, although somewhat less strongly than for skyr. Arla reports volume growth of 25%, which is enough to justify further expansion of production capacity. This will take place in Falkenberg, Sweden, where €28.3 million is being invested in new capacity. The factory is already Arla's largest cottage cheese production site. More than €30 million has been invested there in recent years.Traditionally, cottage cheese was a relatively small product category, but it has grown considerably in recent years, driven by the protein trend. According to Arla, market growth ranges from 13% in Sweden to 37% in Denmark and the UK and 38% in the Netherlands. The product is also popular elsewhere in the world, including Australia, where Arla made an acquisition earlier this year.