Arla Foods Invested Over €63 Million in Dairy Capacity
The dairy producer has upgraded facilities in Germany and Sweden to meet rising demand for high-protein products.
Updated on Oct. 1, 2026 in Organic Food
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Arla Foods has directed more than €63 million into its manufacturing infrastructure to boost the production of skyr and cottage cheese. This move follows substantial volume growth across European markets over the last three years.
Why it matters
The investment aims to address the significant and growing consumer demand for high-protein dairy products throughout Europe. By modernizing production sites, the company intends to scale its output to match these changing dietary preferences.
Arla Foods committed €35 million to its site in Upahl, Germany, and €28.3 million to its facility in Falkenberg, Sweden. These additions support product lines that saw volume increases of 33% for skyr and 25% for cottage cheese over three years.
The players
Arla Foods
This international dairy cooperative is one of the world's largest producers of dairy products.
Brancourts
This Australian dairy producer was acquired by Arla Foods in 2026 to expand its regional market presence.
The details
The capital injection will expand skyr manufacturing at the Upahl site while simultaneously increasing cottage cheese capacity and modernizing operations at the Falkenberg facility. This infrastructure push builds upon previous strategic investments in skyr and Swedish cottage cheese production made since 2023 and 2025, respectively.
Timeline
Arla began investing €51 million in skyr capacity in 2023.
The company started investing €34 million in Swedish cottage cheese in 2025.
Arla acquired the Australian producer Brancourts in 2026.
Commercial production at the Upahl site is scheduled to start in the second half of 2028.
Upgrades at the Falkenberg facility are expected to be completed gradually throughout 2028.
Culture Shift
This move highlights a broad shift toward health-conscious dietary choices as European consumers increasingly prioritize high-protein snacks. This trend mirrors the larger evolution in the global dairy sector as brands pivot away from legacy products to meet modern nutritional preferences.
Consumers can expect more consistent availability of popular high-protein dairy items as production scales to meet market needs. The modernization of these manufacturing sites also ensures that the supply chain is better equipped to handle fluctuating shopping demands.
The takeaway
The expansion reflects how major dairy cooperatives are adapting their industrial footprint to keep pace with the popularity of high-protein diets. Keeping an eye on product availability can help shoppers adjust their weekly grocery budgets and nutrition planning.
Further reading
Learn more about the industry at the Organic Food section.
Live Poll
Do you plan to purchase more high-protein dairy products like skyr or cottage cheese this year?
