Arla Foods expands Danish facility to meet growing Japanese appetite for Cheese

DENMARK – Arla Foods, one of the largest dairy cooperatives in Europe, is expanding its cheese production capacity in Denmark in order to meet rising demand in Japan.

The Danish dairy cooperative says that the project includes the construction of two new ripening warehouses, the installation of a new cheese equipment and building of a new drainage room.

Arla plans to invest up to DKK 50 million (about US$8.2 million) into the project which will be carried out at its site in Troldhede Dairy, West Jutland.

According to a statement from the company, the expansion will result in a new production method that will ensure its long-lasting cheeses remain even fresher and softer once unpacked.

The company further notes that the redevelopment will result in increased efficiency, while also becoming more sustainable with electricity and water savings.

Despite increased efficiency, Arla expects the production plant to maintain the same number of employees – 140. The expansion is expected to be completed by mid-2023.

“[The investment] offers completely new opportunities in the production of long-lasting cheese,” said Torben Pradsgaard, director of Troldhede Dairy.

Troldhede Dairy produces several types of cheeses such as Castello Brie and Camembert, and mainly exports to Japan, Australia, UK and Nordic countries.

Arla shifted production of its Castello cheese to the larger dairy in Troldhede a few years ago.

The new expansion project particularly eyes the Japanese market where demand is reported to be growing at a higher rate compared to supply.

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According to recent data from Statista, the Japanese Cheese segment is estimated to be worth US$2.015 billion in 2021.

The market is expected to grow annually at a compounded annual growth rate of 0.27% during the forecast period of 2021-2025, according to Statista.

Morten Rønberg, category director for cheese at Arla Foods, said: “The Japanese have a billion-euro market for cheese, which is probably surprising to many. But they have a high standard of living and want to pay a good price for a good product.

“And at the same time, they are trendsetters for southeast Asia. Therefore, we hope that the enthusiasm for the cheeses will increase and that we will be able to sell even more in a few years.”

With the expansion, Arla expects around 2,000 tonnes of cheese to be sold to Japan each year, up from its current 1,200 tonnes.

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