IN Brief:
- Arla recorded €7.6 billion of first-half revenue and €213 million net profit, up from €158 million a year earlier.
- Arla Foods Ingredients increased revenue 19.3% to €867 million as whey-protein demand and pricing supported the business.
- The DMK merger and roughly €300 million Götene cheese project add milk volume and processing capacity to a group already handling record supply.
Arla Foods has reported first-half revenue of €7.6 billion and net profit of €213 million as branded volumes recovered and demand for protein-rich dairy products continued to grow. Net profit increased from €158 million in the first half of 2025, while strategic branded volume-driven revenue growth reached 6.7%.
The performance came despite a substantial decline in milk pricing. Arla’s performance price fell to 43.6 euro-cent per kg from 57.5 euro-cent per kg a year earlier as high European milk availability pushed commodity markets lower, while total milk intake increased from 7.2 billion kg to 7.9 billion kg.
Higher physical volumes therefore coincided with lower pricing across parts of the business. European revenue fell 7.1% to €3.953 billion, principally because of weaker commercial prices, although strategic branded volume-driven revenue in the region increased by 6.4%.
Several branded products grew considerably faster. Arla Skyr recorded 39.6% volume-driven revenue growth at group level and Arla Protein increased 34.4%, adding weight to the cooperative’s view that demand for high-protein dairy remains one of the stronger areas of the current market.
Arla Foods Ingredients also benefited. Revenue in the ingredients business increased 19.3% to €867 million from €726 million, supported by higher whey-protein prices and demand connected with health and nutrition applications. The value-added share of AFI sales reached 84.6%, compared with 82.9% a year earlier.
Milk volume is feeding investment decisions
Protein demand cannot be separated neatly from the rest of dairy processing because whey supply is closely linked to cheese production. Higher cheese volumes create additional whey streams, which can then be separated, concentrated, purified, and dried into higher-value proteins if enough downstream capacity is available.
Arla’s current capital programme reflects those connections. The cooperative invested €322 million across its markets during the first half and has separately committed approximately €300 million to a new cheese dairy at Götene in Sweden, the largest single investment announced in its history.
The Götene development is expected to roughly double milk intake at the site to around one billion kg annually, with production scheduled to begin in 2030. Increasing cheese manufacture at that scale affects milk allocation, whey availability, utilities, storage, logistics, and the downstream ingredient network rather than simply adding another finished-product line.
Arla is also upgrading existing whey operations. Its separate Videbæk project is electrifying heat supply to a whey-processing tower, linking ingredient capacity with the energy demand created by concentration and drying processes.
The DMK merger adds considerably more scale. The two dairy cooperatives formally combined from 1 June, bringing together around 11,200 farmer owners, approximately 28,800 employees, and a milk pool of about 20 billion kg. Because the transaction became effective only one month before the end of the reporting period, DMK contributed €409 million to Arla’s first-half revenue.
The full production and financial effect will therefore become more visible in later reporting. Integrating a larger milk pool gives the cooperative more raw material to balance between branded dairy, cheese, butter, powders, ingredients, and commodity sales, but it also raises the importance of matching processing capacity to changes in product demand.
That challenge is already apparent in Arla’s Global Industry Sales division. High milk intake increased trading volumes, but falling commodity prices for butter, skimmed milk powder, and Gouda reduced revenue. More milk can support higher plant utilisation, although the return on that additional throughput depends heavily on where the milk solids are ultimately sold.
Efficiency programmes provide another buffer. Arla recorded €63 million of net efficiencies during the first half, excluding DMK, as it continued investment across a manufacturing estate facing energy, labour, maintenance, and raw-material pressures.
The cooperative has raised its expectation for full-year strategic branded volume-driven revenue growth to 4–6% from the previous 1–3% range. It expects 2026 group revenue of €16.8–17.6 billion, while warning that milk supply and commodity conditions remain volatile.
The protein figures give Arla one of the clearer routes towards higher-value use of that milk. The constraint is increasingly physical: cheese capacity, whey recovery, membrane processing, drying equipment, energy supply, and customer demand have to expand in step if increased milk availability is to produce more than additional commodity volume.
Götene and the enlarged DMK milk pool will take time to work through the production system. In the meantime, AFI’s 19.3% revenue growth and the performance of Arla’s protein-led brands provide a practical indication of where the cooperative currently sees the stronger returns from processing its growing raw-material base.
