In 2026, the industry’s global retail volume sales are predicted to surpass the 2021 level, with growth being steady over the period to 2031, at a 1.2% CAGR. Value sales forecast are more optimistic, with price-led strategies driving baby food, and yoghurt and sour milk products. Indulgence through flavourful and engaging experiences will characterise innovation and drive demand, while a presence in emerging markets will offer long-term rewards should the adoption of dairy in diets increase.
Delivery
This report comes in PPT.
Key Findings
Volume is expected to pick up and bolster price-led value sales potential
In 2026, the industry’s global retail volume sales are predicted finally to surpass the 2021 level, with forecast growth stabilising at a 1.2% CAGR over 2026-2031, mainly driven by low per capita consuming markets and rising adoption of drinking milk products. The value outlook is more optimistic, with price-led strategies driving baby food, and yoghurt and sour milk products.
Categories that offer indulgence and functionality drive growth
Indulgence through fun, flavourful and engaging experiences is expected to boost demand for categories like coffee whiteners and chilled snacks. At the same time, functional ingredients and benefits like gut health and clean label are elevating the appeal of fermented dairy products like fromage frais and quark, creating emerging segments for growth across markets.
Leading dairy companies compete through M&A and by venturing into new markets
Lactalis’s expansion efforts reaped rewards in 2026 as it outpaced Nestlé to secure second place in the global industry, inching closer to Danone’s share. Yili and Mengniu continue to struggle at a global level due to challenging domestic market conditions, though both companies are actively seeking new growth avenues. Regional incumbents are gaining share as emerging markets grow.
High value potential sits in the US, while long-term rewards lie in Asia Pacific
Aversion towards ultra-processed food in the US is driving greater appeal for fresh sources of nutrition, such as milk and functional dairy, accompanied by value-led innovation in coffee whiteners, and yoghurt and sour milk products. A presence in emerging markets in Asia Pacific will lead to volume and value growth rewards should the adoption of dairy in diets increase.
E-commerce benefits from spending shifts as consumers seek value
E-commerce is expected to win from both ends of a polarising market – consumers seeking more premium, trendy dairy products and those who favour affordable brands that sell in bulk or at discounted prices. However, e-commerce sales are limited by market infrastructure, although third party pure play platforms can significantly improve the accessibility of dairy online.
Dairy products and alternatives snapshot
Key findings
Value growth at 5.7% continues to be price-led in 2026, as volume remains flat at 0.5%
Our expert’s view of dairy products and alternatives in 2026
Top five trends in dairy products and alternatives
Top five trends uncovered
Drivers of consumer markets and impact on dairy products and alternatives
Adjacent industries and how they impact dairy products and alternatives
Prices continue to offset softening volume growth
Price-led growth is shifting innovation and consumption priorities
Western Europe predicted to overtake Asia Pacific as the largest region in 2026
Ingredient preferences indicate the potential innovation whitespaces
Leading companies focus on diversifying opportunities in new markets and categories
Activity in nascent categories drives competition
Demand for affordable yet quality products shifted the competitive landscape
Value-led categories focus on meaningful innovations rather than high NPL cadence
No artificial ingredients remains the largest type of sustainability claim for the industry
Critical to consolidate share and growth from a vast category and market footprint
Shopping behaviour shifts towards high discount and value channels, or health stores
E-commerce platforms offering pricing transparency and assurance of authenticity win
Coffee whiteners’ growth leadership indicates the direction of dairy’s role in diets
The US and India offer massive growth potential despite being large markets
Asia Pacific to reclaim top spot as India surges, and China and Japan’s declines soften
Lifestyle trends like UPF aversion, and product variety drive forecast volume uptake
Asia Pacific is the region with the largest unmet potential across dairy categories
Dairy’s potential lies beyond wellness; lifestyle adoption and format are growth pockets
The industry shifts to battle cost and diet adoption issues
Opportunities for growth
Our expert’s view of dairy products and alternatives to 2031
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