Arla puts €63M into skyr and cottage cheese capacity as high-protein dairy booms

What Happened

Arla Foods will invest €35M in skyr production at Upahl, Germany, and €28.3M in cottage cheese at Falkenberg, Sweden. Upahl is due to finish in the second half of 2028, and Falkenberg will be upgraded gradually through 2028. Arla cites 33% skyr volume growth in Europe and 25% overall cottage cheese growth, with Denmark and the UK each up 37% and the Netherlands up 38%.

Why It Matters

A major dairy cooperative is committing capital on a multi-year horizon to strained-style and fresh high-protein dairy, which suggests it sees the demand as structural rather than a passing trend. The growth figures are strongest in markets where cottage cheese was long a niche.

Arla is betting €63M that high protein is not a fad.

FET's Takeaway

Skyr and cottage cheese are both protein-concentrating dairy processes, and the challenge in both is whey handling and yield per litre of milk. The 2028 timeline means capacity will not ease near-term supply for high-protein formulators. Expect plant-based and precision-fermentation dairy to be benchmarked against these products on protein per serving and price.