The Danish dairy giant plans to expand its skyr and cottage cheese production facilities in Germany and Sweden. Through a series of investments, Arla Foods aims to benefit from the protein food boom.

Arla Foods plans to invest tens of millions of dollars to expand skyr and cottage cheese production in Europe. The Danish company's chief executive said the investment is aimed at capturing strong consumer demand for high-protein dairy products.

CEO Peder Tuborgh said in an interview: "The reason the investment in skyr and cottage cheese is attractive is that they align deeply with a global health consumption trend."

The Danish dairy giant will invest more than 63 million euros (about 71 million US dollars) to expand capacity at its existing skyr and cottage cheese plants in Germany and Sweden. Tuborgh said the target output increase for both product categories is around 15%-20%.

Driven by multiple factors including healthy eating habits, the rise of fitness trends, and the growing use of weight-loss drugs, global demand for high-protein dairy products has surged. Companies around the world are positioning themselves by either acquiring related businesses or building their own product lines to seize growth opportunities.

According to Arla Foods, skyr is a traditional Nordic dairy product with a texture similar to Greek yogurt. It belongs to the high-protein category and has now become one of the fastest-growing dairy segments in Europe. Over the past three years, the company's skyr sales in core European markets have increased by one-third.

Demand for cottage cheese has also risen, partly because social media bloggers have vigorously promoted it, showing how it can be used in various recipes such as pizza, cookies, pasta gnocchi, and French toast. Arla Foods said its cottage cheese sales have risen by one-quarter in the past three years.

Speaking about skyr and cottage cheese, Tuborgh said: "The development of both products relies on an extremely strong high-protein consumption trend."

Arla will invest 35 million euros in its Upahl plant in Germany for skyr production, and slightly more than 28 million euros in its Falkenberg plant in Sweden for cottage cheese capacity construction.

Arla Foods recently completed a business merger with Germany's DMK to form a European super-large dairy cooperative. The group reported revenue of 7.6 billion euros and net profit of 213 million euros in the first half of 2026.

Like other companies in the industry, Arla is also using multiple investments to fully tap the opportunities brought by the high-protein food boom. Since 2023, it has invested about 51 million euros to increase skyr production capacity at plants in Germany, Sweden, and Denmark.

Similarly, French food company Danone has completed multiple acquisitions to position itself in the high-protein consumption sector, including the meal-replacement shake ready-to-eat food startup Huel and the Australian high-protein beverage nutrition company MADE Group. Swiss food giant Nestle announced the acquisition of ready-to-drink meal-replacement startup yfood Labs.

Arla is also expanding its whey protein business. In 2024, Arla Foods Ingredients signed an agreement to acquire Volac's whey nutrition business, strengthening its ability to process whey into sports nutrition ingredients. In 2022, the ingredients division cooperated with British dairy cooperative First Milk to produce specialty whey protein powder.