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Hello Halloumi (ESA)

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Eygló Svala Arnarsdóttir's picture

Iceland has been graced with sunshine in the past few days and in spite of the low temperatures, the BBQ season has officially started.

Because of the ongoing strikes, the range of meat products may soon be limited, but instead, BBQ enthusiasts can start looking forward to the first Icelandic version of halloumi grill cheese.

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Using milk from local farmers, West Fjords dairy Arna specializes in lactose-free milk products, hoping for a break in the tough Icelandic dairy market.

“The West Fjords have an image of being pure and clean—it’s the only region in Iceland without large-scale industry,” says Hálfdán Óskarsson, founder and CEO of Bolungarvík-based dairy company Arna, which launched production in 2013. Winner of the 2014 Fjöreggið award for innovation in the food industry, presented by the Icelandic Association of Food Producers and Nutritionists (MNÍ) and the Federation of Icelandic Industries (SI), Arna specializes in lactose-free dairy products using milk from farmers in the region. “People have welcomed our products, especially the lactose intolerant, and showed us patience through the problems we faced at the beginning,” Hálfdán says appreciatively.

Hálfdán Óskarsson, manager of dairy Arna.Hálfdán Óskarsson outside the dairy. Photo: Páll Stefánsson.

A dairy technician from neighboring Ísafjörður, Hálfdán thought of starting his own business after the local packing plant for dairy giant MS was closed down in 2011. However, it’s a tough market to break into, as MS holds a 99 percent market share and, after learning about Hálfdán’s idea, launched its own range of lactose-free products. But Hálfdán was determined to see it through, finding investors willing to support him, including Icelandic businessman Jón S. von Tetzchner, co-founder of Opera software. “The company has 11 owners,” reveals Hálfdán.

Arna now employs five people full-time and manufactures 19 different lactose-free products, including half-fat milk, full-fat cream, sour milk with Lactobacillus acidophilus and Bifidobacterium (AB), feta cheese, skyr and yogurt, and also produces regular AB sour milk for supermarket chain Bónus. “Sales could be better, but we’re looking at a steady increase,” smiles Hálfdán. Some consumers choose Arna’s products because of their health benefits, even if they’re not lactose intolerant. “Splitting lactose into galactose and glucose makes the milk sweeter, so we actually have to make the regular milk less sweet and we add 20-80 percent less sugar to the sweetened products,” explains Hálfdán.

Bolungarvík, West Fjords.The dairy is located in the tall building by the harbor in Bolungarvík. Photo: Páll Stefánsson.

Others are keen to support competition, despite the price difference. Arna has to buy the raw milk through MS, which runs the milk trucks, and pay an additional sum for each liter. However, running its own milk trucks would not yet be possible for the startup. “We try to keep the price of our products as low as possible but the process of making them lactose-free costs 40 percent more than the production of regular dairy products,” states Hálfdán. Being located in Bolungarvík also weighs heavily in Arna’s budget. “Twenty-five percent of our revenue goes into distribution costs.” However, the location is important to many consumers. “Proportionally, we sell the most products here in the West Fjords.”

Unfazed, Arna is now preparing the launch of a cow’s milk version of halloumi grill cheese, which has never been produced in Iceland before, ahead of the BBQ season. I ask Hálfdán whether he isn’t afraid MS will catch weather of it and try to beat him to that too. He laughs. “There are no secrets in Iceland.”

Eygló Svala Arnarsdóttir – eyglo(at)icelandreview.com

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