Dairy Products and Alternatives in Western Europe

January 2024

Sales were in decline in a number of countries in Western Europe in 2023 as manufacturers, retailers and consumers continued to be confronted with high inflation rates in this year. This was seeing many consumers switch to private label lines or shop in discounters in order to try and save money. Nevertheless, trends such as health and wellness and a greater proclivity towards plant-based products continued to be seen in dairy products and alternatives.

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Key findings

HW products in demand

HW remains important for German consumers when choosing dairy products, and there continues to be growing demand for products with reduced fat, sugar and artificial additives. Players are responding by developing healthier dairy options, including low-/no-fat alternatives or products enriched with probiotics or other functional ingredients.

Private label holds the biggest sales share

Although not as big a presence in plant-based dairy or baby food, private label accounts for a third of dairy retail value sales in Western Europe. In the UK, almost three quarters of fresh milk sales are accounted for by private label, while the retailers’ lines have 90%-plus shares in shelf stable dairy desserts in Germany and condensed and evaporated milk in Switzerland. And the high inflation in recent years has further boosted the popularity of private label.

Modern grocery retailers dominate sales

Modern grocery retailers dominate sales in Western Europe, with discounters, already the main distribution channel in Germany, making major gains in Turkey over 2018-2023. E-commerce, which received additional impetus during the pandemic, has continued to grow since then, albeit at slower rates.

Second tranche of HFSS regulations due in the UK in October 2025

The second set of HFSS regulations are set to be introduced in the UK in October 2025. These will include limitations on multibuy offers and a ban on advertising both online and on television. This will likely continue to push brand owners to reformulate any products high in fat, salt or sugar ahead of the upcoming legislation.

Scope
Key findings
Western Europe the second biggest region in sales and per capita terms
Steadier performance expected after the pandemic and inflationary period
Western Europe has the biggest dairy market, at least for now
Strong growth for dairy in Turkey
Germany takes over as the biggest plant-based dairy market
Low or declining birth rates impacting baby food sales over 2018-2023
Rising costs and prices a key issue at the end of the review period
Modern grocery retailers dominate distribution in Western Europe
E-commerce has almost doubled its pre-pandemic share, but remains a minor channel
Private label the major presence in many Western European markets
Lactalis and Danone the leading players in Western Europe
France the major revenue generator for a lot of the top 10 players
Sütas is working hard to combat the competition from private label in Turkey
Positive, if modest, growth expected in Western Europe over the forecast period
Plant-based dairy will be most dynamic, cheese will add the most new sales
Austria: Market Context
Austria: Competitive and Retail Landscape
Belgium: Market Context
Belgium: Competitive and Retail Landscape
Denmark: Market Context
Denmark: Competitive and Retail Landscape
Finland: Market Context
Finland: Competitive and Retail Landscape
France: Market Context
France: Competitive and Retail Landscape
Germany: Market Context
Germany: Competitive and Retail Landscape
Greece: Market Context
Greece: Competitive and Retail Landscape
Ireland: Market Context
Ireland: Competitive and Retail Landscape
Italy: Market Context
Italy: Competitive and Retail Landscape
Netherlands: Market Context
Netherlands: Competitive and Retail Landscape
Norway: Market Context
Norway: Competitive and Retail Landscape
Portugal: Market Context
Portugal: Competitive and Retail Landscape
Spain: Market Context
Spain: Competitive and Retail Landscape
Sweden: Market Context
Sweden: Competitive and Retail Landscape
Switzerland: Market Context
Switzerland: Competitive and Retail Landscape
Turkey: Market Context
Turkey: Competitive and Retail Landscape
UK: Market Context
UK: Competitive and Retail Landscape
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