Surging brands and strong protein demand drive Arla Foods to a standout first half

In a market with resilient consumer demand and a powerful recovery across its brand portfolio, Arla delivered one of the strongest half-year performances for the cooperative to date, as normalising prices lifted demand for our brands and appetite for protein continued to grow. The period also saw Arla complete its merger with DMK, marking the start of a new chapter for the cooperative.

Arla Foods delivered a strong first half of 2026, as healthy global demand for nutritious dairy and a marked recovery across its strategic brands drove branded volume-driven revenue growth of 6.7 percent, a sharp turnaround from the same period last year. Group revenue reached EUR 7.6 billion, while net profit rose to EUR 213 million, up from EUR 158 million in the first half of 2025.

The result was powered by renewed consumer demand as prices normalised across markets, alongside accelerating worldwide appetite for dairy protein. Strategic brands grew across regions, with particularly strong momentum in protein and sports nutrition. The strong result has enabled the Arla Board of Directors to approve a half-year supplementary payment of 1 EUR-cent/kg of milk delivered to farmer owners.

“We have entered 2026 in formidable shape. Demand for nutritious dairy is healthy across the world, our brands have more than recovered, and consumers are responding to better value with real enthusiasm. This is the cooperative performing at its best, turning strong consumer demand into real growth for our brands,” says Peder Tuborgh, CEO of Arla Foods.

Brands return to strong growth as demand strengthens

Strategic branded volume-driven revenue growth reached 6.7 percent, a significant turnaround from the same period last year, with growth broad-based across markets and categories. The Arla® brand returned to growth of 6.5 percent, while Castello® delivered 4.0 percent and Lurpak® rebounded to 5.2 percent, both recovering strongly from a year earlier. Puck® continued its momentum with 9.9 percent growth, and Starbucks® chilled coffee added a further 8.0 percent on top of an already strong prior year.

Underpinning the recovery was a global appetite for high-quality, nutritious products, with demand strongest in protein and sports nutrition, an area where dairy protein holds a natural advantage. Arla® Skyr grew 39.6 percent and Arla® Protein grew 34.4 percent, while the cooperative's ingredients business, Arla Foods Ingredients (AFI), delivered revenue growth of 19.3 percent to EUR 867 million, supported by favourable market conditions and robust demand across key segments. This growing appetite for nutritious, protein-rich food is a structural shift that supports long-term growth opportunities for dairy and for Arla's brand portfolio.

“What we are seeing is the underlying strength of our portfolio coming through. As prices normalised, consumers leaned into our brands with real conviction, into nutrition, into protein, into the products they trust. This is a broad-based recovery, across markets and across categories, and it is exactly what gives us confidence in the months ahead,” says Torben Dahl Nyholm, CFO of Arla Foods.

In the Middle East and North Africa, Arla remained focused on its responsibility to communities it has been part of for many years, ensuring a reliable supply of nutritious food through a challenging period. Supported by a strong local organisation, the cooperative sustained solid brand growth, with brands such as Puck® and Lurpak® performing well.

A lower milk price in a market shaped by abundant supply

While brands and demand for dairy protein strengthened, the value of milk itself came under pressure during the first half. An abundance of milk across Europe, including a strong increase in Arla's own milk intake, weighed on global commodity markets and, in turn, on commercial pricing. At the same time, cost inflation, driven in part by the crisis in the Middle East, ran higher than anticipated, further lowering the value of milk across the sector.

As a result, Arla's performance price decreased to 43.6 EUR-cent/kg, from 57.5 EUR-cent/kg in the first half of 2025, and the pre-paid milk price fell to 40.7 EUR-cent/kg. The lower price level naturally weighed on revenue, but strong brand growth and higher volumes largely offset the impact, keeping the top line stable. The development reflects the same market correction Arla signaled at the start of the year, as record milk volumes worked their way through the system. Seen over a longer horizon, the price remains within a normal cycle.

Despite the lower price level, Arla remained highly competitive and delivered a robust result, supported by strong brand volumes, growing protein demand, and EUR 63 million in net efficiencies under its Fund our Future programme. The strong result has enabled the Board to approve a half-year supplementary payment of 1 EUR-cent/kg of milk delivered to Arla farmer owners.

"This is the market doing what it should. High milk availability has brought prices down across the sector, and that is the reality our owners are navigating right now, but a lower milk price does not mean a weaker cooperative. Our brands are growing, our business is efficient, and we remain highly competitive. That is what gives me confidence that Arla remains a strong and reliable home for our owners' milk," says Peder Tuborgh.

Confident in lasting demand, Arla steps up investment

The strength of global demand is reinforcing Arla's conviction in the long-term future of dairy, and the cooperative is investing accordingly. In the first half of 2026, Arla invested EUR 322 million across its markets.

Separately, this half-year Arla decided to invest in a new cheese dairy at Arla's site in Götene, Sweden, an investment of approximately EUR 300 million and the largest single investment in Arla's history. The facility will roughly double the site's milk intake to around 1 billion kg per year, strengthen supply resilience, and lift the self-sufficiency rate of Swedish cheese by around 10 percentage points. Production is expected to begin in 2030.

“Global demand for reliable, nutritious protein continues to grow, and dairy has a vital role to play in healthy diets and resilient food systems. When demand is this strong, the responsible thing to do is to build for it. We are investing at scale to create modern, efficient capacity that serves consumers, strengthens food security, and secures the future of our cooperative,” says Peder Tuborgh.

Arla and DMK begin journey as one

Following regulatory approval, Arla and DMK completed their merger with effect from 1 June, uniting two of Europe's leading dairy cooperatives to create Europe's leading farmer-owned dairy business. Together, the combined cooperative brings together around 11,200 farmer owners and 28,800 colleagues, with a total milk pool of approximately 20 billion kg.

Because the merger took effect on 1 June, only one month of DMK's activities is included in Arla's first-half results, contributing EUR 409 million to revenue and leaving the half-year figures broadly comparable with last year. The full effect of the combined cooperative will become visible over the coming year.

"We are delighted to welcome DMK, a strong and well-performing cooperative, into Arla. For our farmer owners on both sides, this is about building greater scale, resilience and long-term value together, and I look forward to what we will achieve as one cooperative in the years ahead," says Jan Toft Nørgaard, Chair of Arla Foods.

**Outlook: stronger brand growth and a combined cooperative built for volatility **

On the strength of the brand recovery, Arla is raising its guidance for strategic branded volume-driven revenue growth to 4.0 to 6.0 percent for the full year, up from the 1.0 to 3.0 percent guided in February. This upgrade reflects underlying consumer demand and is a genuine, like-for-like improvement, independent of the merger.

Arla's other full-year guidance has been restated to reflect the combined cooperative following the DMK merger, and is therefore not directly comparable with the February outlook, which covered Arla on a standalone basis. Group revenue is now expected at EUR 16.8 to 17.6 billion, reflecting seven months of DMK consolidation. Profit share is expected to remain within the 2.8 to 3.2 percent target range.

Arla remains fully committed to reducing its climate impact across the value chain, continuing to work towards its 2030 Scope 1, 2 and 3 emission reduction targets, supported by its FarmAhead™ Incentive and Customer Partnership programmes.

Market conditions are expected to remain volatile, with high milk supply continuing to weigh on global dairy prices, though early signs of stabilisation point to a possible gradual recovery later in the year.

"We are raising our expectations for our brands because the recovery we have seen is real and broad-based, and we believe it will continue. At the same time, the completion of the DMK merger gives our combined cooperative greater scale and resilience at exactly the moment the market demands it. We are entering this new chapter from a position of genuine strength, and with clear confidence in the road ahead," says Peder Tuborgh.

Additional information

Half year results 2026 key figures:

• Group revenue: EUR 7.6 billion (HY 25: EUR 7.5 billion)

• Performance price: 43.6 EUR-cent/kg (HY 25: 57.5 EUR-cent/kg)

• Milk volume: 7.9 billion kg (incl. Non-owner milk) (HY 25: 7.2 billion kg)

• Net profit share of revenue: 2.8% (HY 25: 2.1%)

• Net profit: EUR 213 million (HY 25: EUR 158 million)

• Half-year supplementary payment: 1 EUR-cent/kg milk (HY 25: 1 EUR-cent/kg milk)

• Net efficiencies (excl. DMK) : EUR 63 million (HY 25: EUR 54 million)

• Leverage: 3.5 (HY 25: 3.5)

• Overall strategic branded volume driven revenue growth (excl. DMK) : 6.7 % - Includes Lurpak® Arla ® Puck® Castello® Starbucks® (HY 25: -1.5%)

Note on the DMK merger: Arla and DMK merged with effect from 1 June 2026, and one month of DMK activity (June) is included in the 2026 half-year figures. As a result, the merger affects most key figures, including group revenue, performance price, milk volume, profit share and leverage. Strategic branded volume-driven revenue growth and net efficiencies are not affected by the merger and remain directly comparable with the same period last year. The merger's full financial contribution will be reflected from the 2026 full-year results onwards.

Commercial segments (Excluding DMK impact)

Europe:

In the first half of 2026, revenue in Arla's European segment decreased by 7.1% to EUR 3,953 million, primarily driven by lower commercial pricing following the decline in commodity markets. Despite this pricing pressure, branded volume-driven revenue growth remained robust at 6.4% (H1 2025: -2.4%). The development was supported by continued consumer demand and targeted brand investment, with particularly strong performances in the UK and Sweden. Sub-brands Arla® Skyr and Arla® Protein delivered volume-driven revenue growth of 39.6% and 25.1% respectively. Overall growth was further supported by new product formats within the cooking and milk-based beverage (MBB) segments, as well as strong execution in branded cheese. Europe accounted for 52.1% of total Arla revenue.

International:

In the first half of 2026, Arla's International segment delivered branded volume-driven revenue growth of 7.4% (H1 2025: 0.4%), while revenue declined by 1.6% to EUR 1,186 million, primarily due to lower pricing. This was partly offset by strong branded volumes and continued recovery across key brands, with Puck® increasing by 10.6, while Lurpak ® saw a growth of 7.3%. The Middle East and North Africa (MENA) region delivered particularly strong branded volume expansion of 12.7%. Within Rest of World (RoW), performance remained solid, with strategic branded volume-driven revenue growth of 4.8%. Spain continued its positive journey, achieving branded volume-driven revenue growth of 22.2% in the first half of 2026. The International segment represented 15.6% of total Arla revenue.

Arla Foods Ingredients (AFI):

In the first half of 2026, Arla Foods Ingredients delivered revenue growth of 19.3% to EUR 867 million (H1 2025: EUR 726 million), supported by favourable market conditions and strong demand across segments. Performance was driven mainly by higher whey protein prices, reflecting continued strength in whey-based ingredients demand linked to health and nutrition trends, including the impact of GLP-1 diets, together with a volume change of 5.7% in the value-add segment. Value-add share reached 84.6 (H1 2025: 82.9%). AFI accounted for 11.4% of total Arla revenue.

Global Industry Sales:

In the first half of 2026, revenue in GIS decreased by 7.0% to EUR 1,178 million (H1 2025: EUR 1,255 million), driven by lower commodity prices for butter, SMP and Gouda declining on average by 27.3 against the same period last year. This was partially offset by increased trading volumes due to continued high milk intake, particularly in Central Europe and Sweden. Consequently, the share of milk solids sold through GIS increased to 35.4% in the first half of 2026, compared to 28.5% in the same period last year.