Arla’s record year is fuelled by protein and cold coffee

Summary

• High‑value protein and whey ingredients are providing resilience and acting as the main engine of growth for the co-op.
• Protein demand surged in 2025, fuelled by interest in health, sports nutrition, and weight management, strengthening both branded and B2B performance.
• Branded growth was uneven, but high‑protein products and Starbucks RTD coffee stood out as clear consumer favourites.
• Convenience‑led categories gained traction, with chilled RTD coffee emerging as a major contributor to Arla’s branded momentum.

Arla Foods posted record-high revenue in 2025 against a backdrop of a volatile consumer and commodity market environment.

The co-op’s revenue jumped 43% year over year, with net profit also up 3.5%.

This performance was driven by Arla’s ingredients arm, which recorded revenue growth of over 40% in the period through protein ingredient sales and the integration of Volac’s whey processing business.

Branded revenue – which accounts for nearly half of Arla’s group total – rose too, but this was largely price- rather than volume-led as consumers were deterred by high prices in some categories, notably premium butter (Lurpak volumes declined 3.3%).

Meanwhile, Arla’s high-protein brands such as Arla Protein and Skyr, along with Starbucks chilled coffee products, led volume growth with double-digit increases.

Starbucks leads Arla’s branded volume growth

Branded products are the single largest contributor to Arla’s total revenue, exceeding €7bn (up 6.9%) in 2025.

Volumes were largely flat at +0.2% versus 3.7% in 2024, however, with Puck and particularly Starbucks the only bright spots in Arla’s global portfolio.

Starbucks chilled coffee products – which Arla manufactures and distributes in several global markets under a long-term licence with the global coffee chain – led branded volume growth with a ~14% growth.

This was driven largely by the Starbucks Protein Drink with Coffee , which was rolled out across EMEA in 2025 after first launching in the UK in mid-2024.

Starbucks-branded RTD coffee holds a market-leading share in chilled coffee in EMEA since 2018. In 2025, Arla carried out distribution and channel optimisations, which further contributed to Europe RTD volume increases of 15.7% in the period.

Here’s how each of Arla’s global brands fared in 2025.

Arla

• 2025 revenue: ~€4bn (2024: €3.7bn)
• YoY revenue growth: +7.7%
• Volume‑driven revenue growth: –1.0%
• Notes: Strong performance from Arla Protein (+19.5%) and Arla Skyr (+17.8%) with Arla Pro foodservice up 7.5%.

Lurpak

• 2025 revenue: €903m (2024: €837m)
• YoY revenue growth: +7.8%
• Volume‑driven revenue growth: –3.3%
• Notes: Europe volume –7.6%, International +4.5%

Puck

• 2025 revenue: €528m (2024: €514m)
• YoY revenue growth: +2.6%
• Volume‑driven revenue growth: +6.7%
• Notes: Strong momentum in MENA (+6.3%); growth in cooking and spreadables categories.

Castello

• 2025 revenue: €248m (2024: €245m)
• YoY revenue growth: +1.2%
• Volume‑driven revenue growth: +0.3%
• Notes: Strong growth in Denmark (+21.8%), declines in Germany (–11.8%); shift from mould to yellow cheese.

Starbucks chilled RTD coffee

• Revenue: Not specified
• Volume‑driven revenue growth: +13.9%
• Notes: Strongest growth among global brands; Europe +15.7%, International +9.1%, driven by Starbucks Protein Drink with Coffee and improved distribution.

Protein remains a leading force for Arla

Protein demand was central to Arla’s performance in 2025 and remains a crucial piece in the co-op’s future growth strategy.

According to Arla CEO Peder Tuborgh, demand for protein is being accelerated by demographic changes globally as well as consumer trends such as weight management. He said in a press conference that the co-op is investing in its protein processing facilities “more than ever”.

The processing plant acquired from Volac in Wales is central to the co-op’s ambitions. Arla produces whey protein isolate (WPI) there as well as whey fat concentrate and lactose. The plant is set to be expanded in the coming years as the co-op aims to ramp up its WPI sales significantly over the next few years.

The overall aim is to capitalise on demand from the health and sports nutrition sectors, which are growing at a high single-digit CAGR according to the dairy major.

Record-setting performance unlikely to be repeated

Despite achieving record revenue in 2025, Arla has cooled off expectations that this result would be repeated.

The main reason for this is the global milk oversupply situation, which has been putting pressure on global dairy commodity prices since mid-2025 and into 2026.

Still, Arla’s group revenue for 2026 is expected to be in the range of €13.3 to 14.1bn, with net profit share in the same target range of 2.8% to 3.2%.

On the bright side, lower prices should trickle down to branded dairy over the course of this year and lift the co-op’s branded volumes, the co-op hopes.

Snap verdict: B2B focus pays off

Arla’s ingredients division has driven the biggest gains to its FY2025 revenue, enabling the co-op to post record-setting results in a turbulent period dominated by commodity market fluctuations and lukewarm consumer sentiment.

The co-op’s ingredients business operated at full steam to deliver a 43.1% growth backed up by a 29% increase in protein ingredient sales. The added processing capacity in the UK also contributed to this revenue increase, highlighting the benefits of investing in this space.

Overall, the strategy has had a two-fold impact by acting as a critical revenue stream as well as a buffer to retail and commodity market challenges.

Arla’s performance is the latest case study into why other dairy majors have pivoted towards B2B services and ingredient supply.

In 2025, Fonterra and Kerry Group were among the dairy majors to strengthen their focus on ingredient sales while shedding non-core parts of their businesses.

With demand for protein currently outstripping supply, these companies have meaningful headroom for future growth.