Bremen / Düsseldorf, October 1st, 2026. Arla Foods is investing more than 63 million euros in expanding 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 whilst further expanding its position in the field of high-quality protein solutions. The 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 significantly in importance in recent years.
Consumers are increasingly turning to products that combine naturalness, taste and nutritional benefits. Protein-rich dairy products are benefiting from this trend in particular. Categories such as skyr, cottage cheese and quark have been growing rapidly for years and remain among the strongest growth drivers1 in the German dairy market. High-protein products have long since established themselves 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 per cent. To meet the long-term rise in demand, Arla Foods is investing 35 million euros in the expansion of its site in Upahl, Mecklenburg-Western Pomerania. The investment is part of a multi-year programme to expand European skyr production. This is driven by a trend that has been evident in numerous markets for years: demand for skyr is growing faster than available production capacity. By adding further capacity, Arla is laying the foundations to support this growth in the long term and to continue reliably supplying retailers and consumers in the future.
“Demand for skyr and other protein-rich dairy products continues to grow at a very dynamic pace. We have already invested a sum in the millions this year in expanding our skyr production capacity in Germany. With the further investment of 35 million euros in our Upahl site now, we are consistently continuing along this path. In this way, we are creating the conditions to meet rising demand in the long term, further stabilise 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 a modern diet. Consumers particularly appreciate its naturally high protein content, its versatility and how easily it can be incorporated into everyday life. Against this backdrop, Arla is investing a further 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. Cottage cheese2 is one of the fastest-growing segments on the dairy shelf. With MILRAM, the company achieved volume-based sales growth of more than 40 per cent in this sector in the first half of 2026. The momentum of the category underlines 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 form 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 specialised applications for sports nutrition, active lifestyles and early life nutrition.
At the same time, the company is continuously developing its brand portfolio. The new Arla Skyr Drinks have recently created additional consumption occasions in the protein-rich dairy products segment and expanded the Skyr range to include a ready-to-drink format.
“Consumers are increasingly looking for products that combine taste, naturalness and high nutritional value. The strong growth of skyr, cottage cheese and other protein-rich dairy products shows that this is no longer just a short-term trend. That is why we are making targeted investments in capacity, innovation and new product concepts to support this growth in the long term,” says Ingo Müller, Head of Arla Germany.
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[1] Circana, grainy cream cheese, food retail* > 200 square metres + DM, * food retail excluding hard discounters
[2] Circana, Chunked Cream Cheese, Top Brands in food retail > 200 square metres + DM, first half of 2026
