In 2024, inflation remained high in Ethiopia, boosting current value sales of dairy products but hindering retail volume growth, which was modest overall. Packaged butter and spreads experienced marginal decline, as many opted for lower-priced unpackaged butter.
Ethiopia experienced its worst drought in many decades in 2024, which drove up local food prices. In Ethiopia, dairy production is predominantly subsistence-based, with most output coming from smallholder farms and relatively few commercial dairy operations.
Dairy is a core component in Ethiopian cuisine and consumption of dairy products starts from early childhood in Ethiopian families. One of the most essential ingredients in many Ethiopian dishes is nitter kibbeh, a clarified butter steeped with cardamom and various different spices.
Economic trends had a major impact on dairy products and alternatives in Ethiopia at the end of the review period, with inflation of 30% in 2023 followed by further high inflation of 25% in 2024. This was linked to the country experiencing its seventh consecutive failed rainy season, drought, surging oil and fuel prices and currency fluctuations.
The distribution of packaged food is focused on urban areas, as this is where the vast majority of affluent consumers live, with these forming the core consumer base for packaged food. In addition, the country’s major towns and cities are far more accessible than remote rural areas and formal retailing is far more prevalent in urban areas.
Over the forecast period, dairy products and alternatives is expected to see dynamic current value growth and more muted retail volume growth. Retail volume growth will be due to rapid population growth and urbanisation, while higher current value growth will be due to ongoing high inflation, with this in turn constraining retail volume growth as consumers seek to economise.
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Understand the latest market trends and future growth opportunities for the Dairy Products and Alternatives industry in Ethiopia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Dairy Products and Alternatives
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