Dairy Market - Global Industry Research Analysis

According to Market Research Store, the global dairy market size was valued at around USD 889.47 billion in 2023 and is estimated to reach USD 1333.26 billion by 2032, to register a CAGR of approximately 4.60% in terms of revenue during the forecast period 2024-2032.

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The dairy report provides a comprehensive analysis of the market, including its size, share, growth trends, revenue details, and other crucial information regarding the target market. It also covers the drivers, restraints, opportunities, and challenges till 2032.

Global Dairy Market: Overview

Dairy products are derived from the milk of mammals, primarily cows, goats, and sheep. These products include milk, cheese, butter, yogurt, cream, and other processed items like ice cream and powdered milk.

Dairy has long been a staple in diets around the world due to its nutritional benefits, providing essential nutrients such as calcium, protein, and vitamins like B12. The dairy industry involves farming, processing, and distribution, making it a vital sector in agriculture and food production.

Key Highlights

• The dairy market is anticipated to grow at a CAGR of 4.60% during the forecast period.
• The global dairy market was estimated to be worth approximately USD 889.47 billion in 2023 and is projected to reach a value of USD 1333.26 billion by 2032.
• The growth of the dairy market is being driven by rising demand for both traditional dairy products and plant-based alternatives.
• Based on the product type, the fluid milk segment is growing at a high rate and is projected to dominate the market.
• On the basis of distribution channel, the hypermarkets and supermarkets segment is projected to swipe the largest market share.
• By region, North America is expected to dominate the global market during the forecast period.

Dairy Market: Dynamics

Key Growth Drivers

• Rising Global Demand: Increasing population and changing dietary preferences towards protein-rich foods are fueling demand for dairy products.
• Health Benefits: Dairy products are rich in essential nutrients like calcium, protein, and vitamin D, making them a popular choice for health-conscious consumers.
• Product Innovation: The introduction of value-added products like flavored milk, yogurt, and cheese is driving market growth.
• E-commerce Growth: Online platforms are expanding access to dairy products, especially in urban areas.

Restraints

• Price Volatility: Fluctuating raw material prices, particularly milk, can impact profitability.
• Supply Chain Challenges: Maintaining a consistent and reliable supply chain can be difficult due to factors like weather conditions and animal diseases.
• Regulatory Hurdles: Strict regulations regarding food safety and quality can increase compliance costs.

Opportunities

• Emerging Markets: Developing countries with growing middle-class populations offer significant growth potential.
• Organic Dairy: The demand for organic and natural dairy products is increasing due to health concerns.
• Functional Dairy: Dairy products fortified with probiotics and other functional ingredients are gaining popularity.
• Plant-Based Alternatives: While a challenge, the growing plant-based food trend can also be an opportunity for dairy producers to innovate and cater to this market segment.

Challenges

• Climate Change: Climate change can impact milk production due to extreme weather events and changing weather patterns.
• Animal Welfare Concerns: Increasing public awareness about animal welfare can lead to stricter regulations and consumer boycotts.
• Food Safety Risks: Outbreaks of foodborne illnesses can damage consumer trust and harm the industry's reputation.
• Competition from Plant-Based Alternatives: Plant-based milk alternatives are gaining market share, especially among younger consumers.

Dairy Market: Segmentation Insights

The global dairy market is divided by product type, distribution channel, and region.

Segmentation Insights by Product Type

Based on product type, the global dairy market is divided into fluid milk, flavoured milk, drinkable yogurt, cheese, ice-cream, UHT milk, milk powder, and others.

Fluid milk remains one of the largest segments of the dairy market, representing the basic, fresh form of milk that consumers commonly purchase. This product is available in various forms, such as whole milk, skim milk, and low-fat milk. It serves as a staple in households and is widely consumed for its nutritional benefits, including high levels of calcium, protein, and vitamins. The fluid milk market benefits from being an essential part of daily diets, whether for drinking directly, adding to coffee, or using in cooking.

Cheese is another dominant product in the dairy market, enjoyed worldwide in various forms such as soft, hard, processed, and fresh cheeses. It is commonly used as a snack, in cooking, and as an essential ingredient in various cuisines, including pizzas, sandwiches, and pastas. The cheese segment has been growing due to increased demand for specialty cheeses, including organic, artisanal, and ethnic varieties, as well as the rise in plant-based cheese alternatives.

The ice cream segment has maintained strong demand, with a variety of flavors and forms available, from traditional ice cream to frozen yogurt and sorbet. Ice cream is a widely consumed dessert, especially in the warm months, but also as a year-round indulgence. The market continues to innovate, with new flavors, healthier options like low-fat or non-dairy ice creams, and seasonal specialties drawing consumer interest.

UHT milk, which is processed at high temperatures to extend shelf life without refrigeration, is a significant segment in regions where fresh milk availability is inconsistent. It offers convenience for consumers, particularly in areas with less access to fresh milk. UHT milk’s long shelf life and easy storage make it a preferred option in many countries, especially in Asia and the Middle East.

Milk powder, which includes both whole milk powder and skim milk powder, is often used in regions where fresh milk is not readily available or for manufacturing purposes. It has high demand in countries with growing populations and expanding dairy consumption. Milk powder is also commonly used in baby food products, as well as in the production of other dairy-based items like processed cheese and condensed milk.

Drinkable yogurt is a popular choice among consumers looking for a convenient, nutritious snack or beverage. It is available in a wide range of flavors and is often marketed for its probiotic benefits, which contribute to digestive health. The segment has seen an increase in demand due to growing awareness of health-conscious eating habits and a shift towards functional foods.

Flavoured milk, often sweetened and enhanced with various flavors like chocolate, strawberry, and vanilla, has a strong appeal among younger consumers and those looking for more variety in their milk consumption. It provides a refreshing, fun alternative to regular milk and is seen as an indulgent treat or snack. With new flavors and formulations, this segment has seen continued innovation, particularly in health-conscious formulations like reduced sugar or added protein.

Segmentation Insights by Distribution Channel

On the basis of distribution channel, the global dairy market is bifurcated into specialty retailers, hypermarkets/supermarkets, convenient stores, online channels, and others.

Hypermarkets and supermarkets are the largest and most widespread distribution channels for dairy products. They offer a wide range of dairy items, from fresh milk and cheese to packaged products like ice cream and yogurt. These stores are attractive to consumers because they provide a one-stop shopping experience where dairy products are often located in the refrigerated sections.

The wide variety and convenience of purchasing everything in one place contribute to the dominance of this channel in many regions. Hypermarkets and supermarkets often have larger volumes of dairy, ensuring a constant supply and often offering competitive pricing.

Specialty retailers are stores that focus on specific categories of products, including dairy. These can range from small, locally owned dairy shops to larger chains dedicated to organic or health-focused dairy products. Specialty retailers typically offer premium products, such as artisanal cheeses, organic milk, or lactose-free options.

Consumers who prioritize quality, uniqueness, or niche dairy products tend to prefer these channels. This segment is growing as consumer demand for specialized and higher-quality dairy products continues to rise.

Convenience stores cater to customers looking for quick and easy access to daily necessities, including dairy products. While the selection may be smaller compared to hypermarkets or specialty retailers, convenience stores are popular for their accessibility, especially in urban areas.

Products like single-serve milk bottles, yogurt, and cheese snacks are common in convenience stores. The main advantage of this distribution channel is the proximity to consumers and the speed of purchase, making it a preferred option for impulse buys or last-minute dairy needs.

The rise of e-commerce has significantly impacted dairy product sales, particularly with the growing trend of online grocery shopping.

Online channels allow consumers to shop for a variety of dairy products, often with the convenience of home delivery. This channel has gained momentum during the COVID-19 pandemic and continues to grow due to convenience, especially for bulk purchases or specific dietary needs like lactose-free or plant-based dairy alternatives. Additionally, many online platforms offer competitive prices and subscription services, which contribute to the increasing share of online sales in the dairy market.

Dairy Market: Report Scope

Dairy Market: Regional Insights

• North America is expected to dominates the global market

North America stands as the largest and most influential player in the global dairy market. The United States is the primary contributor, supported by an extensive network of dairy farms and processing plants. The region benefits from sophisticated infrastructure that ensures efficient supply chains, both for domestic consumption and exports. Dairy products, particularly milk, cheese, and yogurt, hold a significant place in the diet, and innovation in dairy alternatives and value-added products continues to shape the market.

Europe is another major player, with countries like France, Germany, and the United Kingdom being central to production and consumption. Europe has a long-standing tradition of dairy farming and consumption, with a focus on high-quality dairy products such as cheese, butter, and yogurt. The region also leads in the development of organic and specialty dairy offerings, such as lactose-free and plant-based options, which continue to expand market reach both locally and globally.

Asia-Pacific is the fastest-growing region for dairy consumption. The rise of urban populations, improved living standards, and the adoption of Western dietary habits have significantly increased demand for dairy products, especially in countries like China and India. Despite limited local production capacity in certain areas, the region's rapid growth in dairy consumption presents both challenges and opportunities, driving an increase in imports and the development of local production capabilities.

Latin America shows consistent growth in dairy demand, particularly in Brazil and Argentina. Dairy is a staple in the region, with milk, cheese, and yogurt being central to local diets. The region also plays a key role in dairy exports, although challenges related to fluctuating production costs and regulatory policies can influence market stability.

Middle East & Africa remains a smaller, but expanding market. This region relies heavily on dairy imports, as local production is insufficient to meet growing demand. However, urbanization and shifting dietary preferences are driving an increase in dairy consumption, with nations like Saudi Arabia and the U.A.E. showing notable growth in both local dairy processing and imports.

Recent Developments:

• Danone, a leading food company, expanded its plant-based offerings in December 2018 by introducing four new flavors of probiotic almond yogurt under its Light & Fit brand. This move aimed to cater to the growing demand for vegan and dairy-free options in the yogurt market.
• In December 2018, Keventer Agro, a leading player in India, ventured into the UHT milk business. The company operates a facility capable of processing 200,000 liters of milk per day.

Dairy Market: Competitive Landscape

The report provides an in-depth analysis of companies operating in the dairy market, including their geographic presence, business strategies, product offerings, market share, and recent developments. This analysis helps to understand market competition.

Some of the major players in the global dairy market include:

• Nestle
• Dairy Farmers of America
• Fonterra
• Danone
• Arla Foods
• Muller Group
• Groupe Danone 
• Kraft Foods
• Amul Industries Private Limited
• Yili
• Mother Dairy Fruit & Vegetables Private Ltd.
• The Lactalis Group.

The global dairy market is segmented as follows:

By Product Type

• Fluid Milk
• Flavoured Milk
• Drinkable Yogurt
• Cheese
• Ice-Cream
• UHT Milk
• Milk Powder
• Others

By Distribution Channel

• Specialty Retailers
• Hypermarkets/Supermarkets
• Convenient Stores
• Online Channels
• Others

By Region

• North America
  • U.S.
  • Canada
• Europe
  • U.K.
  • France
  • Germany
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Rest of Latin America
• The Middle East and Africa
  • GCC Countries
  • South Africa
  • Rest of Middle East Africa

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