Arla Foods has committed more than €63m ($71m) across two of its European dairies to increase skyr and cottage cheese production.
The farmer-owned co-op said in a statement today (1 October) the investment will help meet “growing demand” as consumers turn to protein-rich foods.
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The latest tranche of spending is split between a €35m upgrade at its skyr facility in Upahl, Germany, and a €28.3m expansion at its cottage-cheese plant in Falkenberg, Sweden.
The Falkenberg investment is fresh money on top of a separate project announced in December last year, an Arla spokesperson confirmed with Just Food.
The earlier programme, which aimed to lift the plant’s Keso-branded cottage-cheese output by 1,500 tonnes, remains in development.
Meanwhile, the latest investment at the Swedish facility is earmarked for additional capacity and site modernisation, with completion expected gradually through 2028.
“The investment is primarily to modernise and future-proof the dairy,” the spokesperson said. “There is also a minor capacity increase but less than in the previous investment.”
Asked what the modernisation work would involve, Arla said the programme covers a new cheese tank, a new packaging line, expanded premises and the upgrading of existing equipment.
Arla said it is the “largest branded supplier of cottage cheese” across its European markets, with particularly strong positions in Sweden and Denmark – the two markets the Falkenberg site primarily supplies.
The site employs around 100 staff.
At Upahl, the new investment will be used to increase production capacity of skyr, which the co-op said has become “one of the fastest-growing dairy categories across Europe”.
Commenting on this investment, the spokesperson said: “Bigger focus on capacity increase here. Also building resilience and strengthening our skyr network,” adding the it will lead to an approximately 30% increase in capacity.
Skyr is currently produced at Upahl alongside Arla’s dairy in Hobro, Denmark, with a third production base planned for Linköping, Sweden, in the future.
Commercial production from the upgraded Upahl line is expected to start in the second half of 2028.
The site currently employs roughly 400 people and supplies skyr across Arla’s European markets.
Despite the scale of investment at both sites, Denmark-headquartered Arla said neither project is expected to create new full-time positions in the near term.
Arla Foods’ CEO Peder Tuborgh said: “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.”
Arla, owned by 11,000 dairy farmers, reported revenue of €7.6bn in the first half of 2026, an increase of 1.3% on the first six months of 2025.
