Danish-Swedish dairy co-op Arla has said it will invest €63 million to grow its offering of skyr and cottage cheese, amid a demand for protein-rich food.

The investment, at sites in Germany and Sweden, is aimed at allowing Arla to meet growing demand across markets while creating greater value from the milk it takes in from farmers.

The dairy business said that, across Europe and other markets, consumers are increasingly looking for practical foods that can be part of an active lifestyle and balanced diet.

"Products such as skyr and cottage cheese have become everyday staples for many people, reflecting a broader shift towards protein-rich foods," Arla said.

Skyr

Over the past three years, skyr volumes have grown by more than 33% across Arla's European markets, while cottage cheese volumes have increased by 25% across the co-op's markets in the same period.

"Demand for both categories has grown so rapidly in recent years that producers across the dairy industry are investing to expand capacity and keep pace with consumer needs", Arla said.

The investment includes a €35 million investment in skyr production in Upahl, Germany, and a €28.3 million investment in cottage cheese production in Falkenberg, Sweden.

Skyr, which is originally rooted in Nordic dairy traditions, has become one of the fastest-growing dairy categories across Europe.

Arla's investment in its skyr production in Germany comes after a "multi-year effort" by the dairy business to serve growing demand for the product.

The co-op has spent €51 million (not including the new investment) since 2023 to keep pace with the consumer demand for skyr.

Cottage cheese

On its cottage cheese investment, Arla said the product has become "one of the clearest beneficiaries" of the global nutrition trend.

Commenting on the new investments, Arla 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.

"These investments ensure that we can continue meeting growing consumer demand, supporting our customers and creating long-term value from our farmer owners' milk.

"The growth we are seeing in skyr and cottage cheese gives us confidence in the long-term potential of these categories," the Arla CEO commented.