Global Dairy Market to Reach $1.17 Trillion by 2031, Driven by Demand for Nutritional and Lactose-Free Products

Key Growth Drivers

1. Population Growth & Dietary Shifts
   The growing population and an increasing preference for fresh dairy products are primary contributors to market expansion. Awareness of the health benefits of dairy, including its rich nutritional profile, continues to attract consumers globally.

2. Technological Advancements in Dairy Production
   Innovations in dairy processing, such as clean-label and organic product development, are creating new opportunities. Rising investments in state-of-the-art production technologies, like Arla Foods’ €210 million mozzarella facility in the UK, are driving efficiency and variety.

3. Lactose-Free Dairy Products
   With rising health concerns and a growing prevalence of lactose intolerance, the demand for lactose-free dairy products is expected to grow significantly, with a projected CAGR surpassing other product categories. Major players like Nestlé and First Milk have introduced innovative lactose-free offerings to capture this expanding segment.

Segment Highlights

• Cheese Segment Growth
  The cheese category is expected to register the highest CAGR of 5.2%, driven by increasing demand for ready-to-eat products, fast-food adoption, and the rising popularity of flavored and western-style cheeses.

• Cow Milk Dominance
  Cow milk is anticipated to account for over 81.2% of the market in 2024 due to its widespread availability and consumer preference for its digestibility and nutritional benefits.

• Organic Dairy Products
  Organic dairy is set to grow rapidly, bolstered by consumer focus on clean-label and premium products. Health-conscious choices and concerns over antibiotic residues in conventional dairy are steering demand towards organic options.

• Online Retail Surge
  The online retail segment is poised to expand at a CAGR of 5.3%, reflecting consumer preference for convenient purchasing and growing penetration of food delivery platforms.

Regional Insights

Asia-Pacific is projected to lead the market with the highest CAGR of 5.1% during the forecast period. Factors such as increasing demand for processed and western dairy products, technological advancements, and foreign investments in the region are contributing to this growth.

Industry Developments

• In March 2024, India’s Gujarat Co-operative Milk Marketing Federation (GCMMF) partnered with Michigan Milk Producers Association to launch fresh milk in the U.S. market.
• Nestlé launched its N3 milk in China in November 2023, focusing on prebiotic fiber-enriched and low-lactose variants.
• The UK-based First Milk acquired chilled dairy producer B V Dairy in February 2023 to strengthen its product portfolio.

Challenges Ahead

Despite robust growth, the market faces challenges, including increasing competition from plant-based dairy alternatives and a growing vegan population. Additionally, the high prevalence of lactose intolerance and allergies poses a constraint to conventional dairy sales.