Arla Foods Expanding U.S. Presence with Valley Queen Partnership
Arla Foods, a leading dairy co-op, is increasing its footprint in the U.S. by teaming up with a processor to produce whey protein for the food and beverage industry. The partnership with South Dakota-based Valley Queen will see the production of ingredients for Arla’s Nutrilac ProteinBoost line. This whey protein concentrate is designed to enhance protein content in food and beverage products while maintaining taste and texture.
According to Luis Cubel, Group Vice President and Managing Director of Arla Foods Ingredients, the demand for protein-enriched dairy products is on the rise in the U.S. To support their growth plans in North America, Arla needed to expand its capacity significantly.
Valley Queen’s plant in Milbank, South Dakota, will begin production this winter after the installation of specialized equipment. With around 440 employees, Valley Queen processes approximately three billion pounds of milk annually.
Owned by 8,400 farmers across seven European countries, Arla has been focusing on sports nutrition and protein to enhance its ingredients business. The company recently acquired the whey nutrition business from competitor Volac, solidifying its position as a leader in the industry.
In anticipation of potential sales pressure in 2025 due to rising milk prices, Arla is intensifying its presence in the ingredients sector. The company reported a strong financial performance in 2024, with a 5.4% increase in revenue from its ingredients segment driven by the demand for whey-based ingredients.
The U.S. is experiencing soaring demand for whey protein, leading to limited supply and record-high prices. North America accounted for 38% of the revenue share for whey protein in 2023, with the global market projected to reach $10.7 billion this year.
Over the past three decades, Arla has expanded its operations in the U.S. through various partnerships and acquisitions. The co-op acquired Wisconsin-based dairy White Clover in 2006 and later formed a joint venture with Dairy Farmers of America to boost cheddar cheese production in the country.