Arla Foods is entering the Swedish food manufacturing market with its first skyr production facility, backed by a €34.5m ($39.3m) investment in the existing dairy plant located in Jönköping.
To address the “growing demand for skyr” in Sweden, Arla will install a dedicated production line at the Jönköping facility, as stated on June 5. This strategic move aims to ensure an adequate supply of this popular product.
Concentrating primarily on local market needs, the Jönköping plant will produce 1kg “buckets” of skyr, along with various other formats. Arla anticipates that the new production line will become operational in the first quarter of 2028.
An Arla spokesperson said that skyr production was previously limited to its Hobro dairy in Denmark, its Upahl site in Germany, and its Sipoo facility in Finland.
Supply chain executive vice-president David Boulanger emphasized, “Consumer demand for skyr is high and growing. Our Swedish cooperative members are dedicated to producing with a lower climate footprint, and Arla has unique expertise in converting milk into protein-rich and delicious skyr products.”
“With this investment, we secure future growth in the category.”
The Jönköping dairy, recognized as Sweden’s “largest specialist dairy,” currently produces over 280 different product lines, including yogurt, sour cream, crème fraîche, and a range of lactose-free and organic items.
Employing approximately 290 people, the facility is strategically positioned to meet Swedish demand while leveraging local milk supply and existing infrastructure to establish a robust production network for skyr throughout Europe.
Although immediate job creation is not expected from this investment, the spokesperson indicated that securing long-term employment at the site remains a primary goal, while production capacity specifics for skyr at this facility remain undisclosed.
In April, Arla Foods also announced plans to merge with the German dairy cooperative DMK Group. This collaboration aims to create an extensive entity comprising over 12,000 farmers across seven countries.
The joint statement highlighted the ambition to establish “the largest dairy cooperative in Europe,” encompassing members from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg, and the Netherlands.
However, in February, Arla Foods forecast a decline in a key volume metric after experiencing a year of growth. The cooperative projected revenues between €14.5bn and €15.3bn in 2025, driven primarily by elevated dairy price levels.
Arla’s forecasts indicated that price pressures, coupled with “consumer uncertainty,” would impact branded, volume-driven revenue growth. Overall, they projected a decrease of 1-2%, although this assessment remains “subject to the balance of supply and demand dynamics throughout the year.”
