Dairy Products Market Size, Share, Growth, Trends 2024 To 2033

Dairy Products Market Size and Growth 2024 To 2033

The global dairy products market size was captured at USD 518.94 billion in 2023 and is expected to reach around USD 704.18 billion by 2033, growing at a compound annual growth rate (CAGR) of 3.09% from 2024 to 2033.

The dairy products market encompasses a diverse range of products derived from milk, including milk, cheese, yogurt, butter, margarine, ice cream and others. It includes various sources like cow, goat, sheep, and other milks, and is distributed through supermarkets, convenience stores, online platforms, and specialty stores. The market caters to households, foodservice industries, and industrial applications. The sector is segmented by form (liquid, solid, powdered) and region, with significant growth driven by rising consumer demand for diverse dairy products, convenience, and innovation in dairy formulations. Regional preferences and distribution channels further influence market dynamics.

• “Researchers from Voronezh State University of Engineering Technologies have developed a sensor that detects microbes and bacteria in milk with 83% accuracy. The sensor identifies minute volatile compounds released by bacteria, potentially transforming raw milk quality control.”
• “Dairy firm Heritage Foods is expanding its presence in Eastern India as part of its pan-India strategy. In Odisha, Heritage launched its products six to nine months ago. CEO Srideep M. Kesavan noted that the East has the lowest per capita dairy consumption, presenting growth opportunities.”
• “Coopernova, a dairy cooperative in Mato Grosso, Brazil, has transformed milk production by using dried distillers’ grains (DDG) in cattle feed. Since implementing this practice in 2017, Coopernova has reported remarkable improvements in milk yields, according to Vice President Milton Dalmolin.”
• ” Corey Scott, with extensive experience in agriculture from agronomy to animal nutrition and sustainability, now serves as CEO of Midwest Dairy. She describes this new role as one that fills her with exceptional optimism and enthusiasm.”

Report Highlights

• By Region, Asia Pacific has dominated the market by achieving revenue share of 44.26% in 2023.
• By Region, North America is experiencing significant growth by generating 15.6% of revenue share in 2023.
• By Product Type, milk segment has reported highest revenue share of 58.71% in 2023.
• By Distribution Channel, hypermarket/supermarket segment has reported highest revenue share of 54.2% in 2023.

Dairy Products Market Growth Factors

• Rising Health Consciousness: Increased awareness of the health benefits of dairy products, such as high protein and calcium content, drives consumer demand for dairy, including options like Greek yogurt and fortified milk.
• Product Innovation: Advances in dairy product formulations, such as low-fat, lactose-free, and probiotic-enriched options, attract health-conscious consumers and expand market offerings.
• Growing Population and Urbanization: Increasing population and urbanization boost demand for dairy products due to higher consumption rates and the need for convenient food options.
• Expansion of Distribution Channels: The growth of e-commerce and improved retail infrastructure enhance accessibility to a wide range of dairy products, driving market expansion.
• Rising Disposable Incomes: Higher disposable incomes in emerging markets lead to increased spending on premium and diverse dairy products, such as artisanal cheeses and specialty yogurts.

Dairy Products Market Trends

Increasing Demand for Convenience Foods: The growing preference for ready-to-eat and convenient meal solutions boosts the demand for dairy products such as cheese slices, yogurt cups, and flavored milk, which offer quick and easy consumption options.

Expansion of Dairy Alternatives: The rising popularity of dairy alternatives, such as plant-based milk and cheese, is driven by lactose intolerance and veganism. This trend encourages innovation and product diversification in the dairy sector.

Emerging Markets: Expanding dairy consumption in emerging markets like India and Southeast Asia presents opportunities for growth, as rising incomes and urbanization increase demand for diverse dairy products.

Sustainability and Organic Products: Growing consumer interest in sustainable and organic dairy products creates opportunities for brands to develop and market environmentally friendly and organic dairy options, catering to eco-conscious consumers.

Report Scope

Dairy Products Market Dynamics

Drivers

Increasing Urbanization:

• Urbanization leads to busier lifestyles and a growing preference for convenient, ready-to-eat dairy products. Urban consumers seek accessible options like flavored yogurts, cheese snacks, and pre-packaged milk. The demand for these products rises as urban areas expand and lifestyles become more hectic, driving market growth.

Enhanced Dairy Processing Technologies:

• Advances in dairy processing technologies, such as improved pasteurization, ultrafiltration, and smart packaging, enhance product quality, safety, and shelf life. These innovations allow for a broader range of high-quality products, including extended shelf-life milks and functional dairy ingredients, fueling market expansion and consumer trust.

Restraints

Fluctuating Raw Material Prices:

• The dairy industry is affected by the volatility in prices of raw materials such as milk and feed. Price fluctuations can impact profit margins, leading to higher consumer prices and potentially reduced demand. This unpredictability challenges dairy producers to maintain stable pricing and manage cost pressures effectively.

Regulatory and Health Concerns:

• Stringent regulations and health concerns, such as lactose intolerance and the use of growth hormones, pose challenges to the dairy market. Compliance with diverse international standards and addressing consumer health concerns can increase production costs and limit market expansion, affecting consumer acceptance and sales.

Opportunities

Growth in Functional Dairy Products:

• There is an increasing consumer interest in functional dairy products that offer added health benefits, such as probiotic yogurts and fortified milk. This trend provides opportunities for innovation and product development in the dairy sector to meet the demand for health-enhancing products.

Expansion of Premium and Artisanal Dairy Products:

• Rising consumer preference for premium, artisanal, and specialty dairy products presents growth opportunities. High-quality cheeses, handcrafted yogurts, and gourmet dairy items cater to niche markets and affluent consumers seeking unique and luxurious dairy experiences, driving market expansion.

Challenges

Environmental Impact:

• Dairy production poses environmental challenges, including high greenhouse gas emissions, excessive water usage, and waste generation. Addressing these issues requires significant investment in sustainable practices, such as improved manure management and energy-efficient technologies, which can be costly and complex for producers, affecting market stability and growth.

Supply Chain Disruptions:

• The dairy industry is highly susceptible to supply chain disruptions from factors like transportation delays, labor shortages, and geopolitical events. These disruptions can lead to inconsistent product availability, increased costs, and potential shortages, creating instability in pricing and supply for both consumers and producers.

Dairy Products Market Segmental Analysis

Product Type Analysis

Milk: The milk product type has confirmed highest market share of 58.71% in the year of 2023. Milk is a liquid dairy product consumed fresh or processed into various forms, including whole, skim, and flavored varieties. The market is shifting towards organic and plant-based alternatives, such as almond and oat milk, driven by health-conscious consumers and those with lactose intolerance. Additionally, fortified and functional milks with added nutrients are gaining popularity. 

Cheese: Cheese segment has recorded second highest market share of 19.16% in 2023. Cheese is a dairy product produced by coagulating milk proteins, available in various types such as cheddar, mozzarella, and gouda. The cheese market is expanding with the growing popularity of gourmet and artisanal cheeses. There is increasing demand for low-fat and reduced-sodium options, and innovative cheese flavors and textures are being introduced to cater to diverse consumer preferences. 

Yogurt: The yogurt segment has captured market share of 9.15% in 2023. Yogurt is a fermented dairy product made from milk and beneficial bacteria cultures, available in various forms such as Greek, regular, and probiotic yogurt. The yogurt market is experiencing growth in Greek and high-protein varieties, along with plant-based and dairy-free options. Consumers are increasingly seeking probiotic-rich yogurts for digestive health and functional benefits. 

Dessert: Dessert segment has registered market share of 6.3% in 2023. Dairy-based desserts include products like puddings, custards, and ice creams made from milk and cream. There is rising consumer interest in premium and low-sugar dairy desserts, including those with natural and organic ingredients. Innovation in flavors and health-conscious formulations, such as reduced-fat and lactose-free options, is driving market growth.

Butter: In 2023, the butter segment has reported 4.26% of market share. Butter is a dairy product made from churning cream, available in salted, unsalted, and flavored varieties. The butter market is seeing increased demand for artisanal and organic butters. There is also growing interest in plant-based butter substitutes and spreads, driven by dietary preferences and health considerations.

Milk Powder: Milk powder is a dried form of milk used for various applications, including reconstitution into liquid milk and as an ingredient in processed foods. The milk powder market is expanding due to its convenience and long shelf life. Increased demand for infant formula and dairy ingredients in food manufacturing is driving growth, along with innovations in fortification and specialized formulations.

Cream: Cream is a dairy product derived from the high-fat layer of milk, used in cooking and as a topping or ingredient in desserts. The cream market is experiencing growth with the rise of premium and organic creams. There is also increasing interest in reduced-fat and plant-based cream alternatives, catering to health-conscious consumers and dietary preferences.

Others: In 2023, the others segment has measured market share of 2.42%. The "Others" category includes various dairy products not specifically mentioned, such as kefir, buttermilk, and dairy-based sauces. This segment is growing as consumers explore diverse dairy products and traditional items. Innovations in flavors, packaging, and functional benefits are driving interest in these niche products, reflecting broader trends in personalization and health-focused consumption. 

Distribution Channel Analysis

Hypermarket / Supermarket: The hypermarkets and supermarkets segment has dominated the market with market share of 54.2% in 2023. Hypermarkets and supermarkets are large retail outlets offering a wide range of dairy products, including milk, cheese, yogurt, and butter. This segment is seeing increased demand for private-label products and organic options. Stores are expanding their dairy sections and integrating advanced inventory management to ensure product freshness and variety. The rise of in-store promotions and loyalty programs is also driving growth. 

Convenience Store: Convenience stores segment has achieved market share of 32.71% in 2023. Convenience stores are smaller retail outlets offering essential dairy products like milk, cheese, and yogurt for quick purchases. Convenience stores are focusing on offering ready-to-eat and single-serve dairy products to cater to on-the-go consumers. There is a growing trend toward stocking premium and organic options to meet evolving consumer preferences, along with enhanced refrigeration technologies to maintain product quality.

Speciality Store: The speciality store segment has calculated market share of 9.84% in 2023. Specialty stores focus on niche or premium dairy products, such as artisanal cheeses and gourmet yogurts. This segment is growing due to increasing consumer interest in high-quality, unique dairy items. Specialty stores emphasize product authenticity and sourcing, often highlighting local or organic ingredients. Trends include the rise of curated selections and personalized customer experiences. 

Online Stores: Online stores sell dairy products through e-commerce platforms, offering home delivery options for convenience. The online segment is expanding rapidly due to the growing preference for online shopping and home delivery. Innovations such as subscription services, personalized recommendations, and improved logistics are enhancing consumer convenience. There is also a rise in direct-to-consumer sales from dairy brands.

Others: In 2023, the others segment has generated 3.25% of market share in 2023. This category includes alternative distribution channels such as direct-to-salon sales, foodservice, and institutional buyers. Opportunities in this segment include partnerships with foodservice providers and institutions that use dairy products in bulk. There is an increasing focus on customized dairy solutions and supply chain innovations to meet the specific needs of these non-traditional distribution channels. 

Dairy Products Market Regional Analysis

Why Asia Pacific is leading in the dairy products market?

The Asia-Pacific region is experiencing rapid growth in dairy consumption due to increasing urbanization, rising incomes, and changing dietary habits. Asia Pacific market size is calculated at USD 236.80 billion in 2024 and is projected to grow around USD 311.67 billion by 2033 with a CAGR of 3.06%. There is a growing interest in dairy products like yogurt and cheese, coupled with a rising trend for functional dairy products. Market expansion is also driven by innovations in product flavors and formats.

Why North America is experiencing significant growth in the dairy products market?

In North America, there is a growing demand for organic and specialty dairy products driven by health-conscious consumers. North America market size is expected to reach around USD 109.85 billion by 2033 increasing from USD 83.46 billion in 2024 with a CAGR of 3.87%. The market is also experiencing increased adoption of dairy alternatives, such as plant-based milks. Technological advancements in dairy processing and supply chain efficiency are enhancing product availability and quality. U.S market size is estimated to reach around USD 82.39 billion by 2033 increasing from USD 62.60 billion in 2024.

Europe Dairy Products Market Trends

Europe is seeing a trend toward sustainable and ethical dairy production, with consumers prioritizing eco-friendly packaging and organic options. Europe market size is measured at USD 148.68 billion in 2024 and is expected to grow around USD 195.69 billion by 2033 with a CAGR of 3.21%. The region is also witnessing growth in premium and artisanal dairy products, driven by a strong emphasis on quality and traditional methods. Regulatory standards and health trends influence product offerings.

LAMEA Dairy Products Market Trends

In LAMEA(Latin America, Middle East, and Africa), there is growing demand for affordable and accessible dairy products due to rising disposable incomes and urbanization. LAMEA market size is forecasted to reach around USD 86.97 billion by 2033 from USD 66.07 billion in 2024. The market is expanding with increased investment in dairy infrastructure and distribution networks. Additionally, there is a rising interest in dairy alternatives and premium products in select markets.

Global Dairy Products Market Top Companies

• Nestlé S.A.
• Danone S.A.
• Lactalis Group
• Arla Foods amba
• FrieslandCampina N.V.
• Saputo Inc.
• Kraft Heinz Company
• General Mills, Inc.
• Dean Foods Company
• Fonterra Co-operative Group Limited
• Unilever PLC
• Lactalis Ingredients
• Bel Group
• Kirkland Signature
• Dairy Farmers of America (DFA)

Companies like Oatly and Elmhurst are entering the market with innovative dairy alternatives, focusing on plant-based products and sustainable practices. They leverage advancements in formulation and production to cater to the growing demand for lactose-free and environmentally friendly options. Nestlé S.A. and Danone S.A. dominate the market through extensive product portfolios, global distribution networks, and substantial R&D investments. They drive innovation with new product launches and strategic acquisitions, maintaining market leadership by adapting to evolving consumer preferences and investing in sustainable practices.

Recent Developments

• In 2023, China Mengniu has acquired organic infant formula producer Bellamy's Australia for USD 1 billion. This strategic acquisition aims to enhance Mengniu's product portfolio and market presence in the organic infant formula sector, expanding its global footprint.
• In 2022, Danone's Activia brand has launched Activia+ in the United States and other North American markets. This new drinkable yogurt is available in strawberry, peach, and raspberry flavors, expanding the brand's product lineup and catering to diverse consumer tastes.
• In 2022, Chobani LLC, based in New Berlin, New York, has launched two new dairy products: ultra-filtered milk and lactose-free half & half. These products feature protein-packed formulas and are packaged in recyclable paper-based containers, made from locally sourced milk.
• In 2022, Unilever has partnered with ASAP for the distribution of its ice cream products. Under this agreement, ASAP will handle the delivery of ice cream and treats from Unilever’s virtual storefront, The Ice Cream Shop, enhancing accessibility and convenience.

Market Segmentation

By Product Type

• Milk
• Cheese
• Yogurt
• Dessert
• Butter
• Milk Powder
• Cream
• Others

By Distribution Channel

• Hypermarket / Supermarket
• Convenience Store
• Speciality Store
• Online Stores
• Others

By Regions

• North America
• APAC
• Europe
• LAMEA