Global Fermented Milk Market By Type (Cheese, Yogurt, Butter, Sour Cream, Others), By Flavor (Plain/Natural, Fruit, Vanilla, Chocolate, Others), By End Use (Household/Retail Consumption, Food Service Industry, Food Processing Industry), By Distribution Channel, Supermarkets and Hypermarkets, Convenience Stores, Online Retail, Specialty Stores, Others) , By Region, and Key Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Report Overview

The Global Fermented Milk Market size is expected to be worth around USD 510 Bn by 2033, from USD 307 Bn in 2023, growing at a CAGR of 5.2% during the forecast period from 2024 to 2033.

Fermented milk refers to a variety of dairy products that are produced through the fermentation of milk, where specific microorganisms, primarily lactic acid bacteria, convert lactose (the sugar in milk) into lactic acid. This process not only enhances the flavor and texture of the milk but also increases its shelf life and digestibility.

Common examples of fermented milk products include yogurt, kefir, cultured buttermilk, and koumiss. The fermentation process typically involves inoculating the milk with a starter culture, which can include various strains of bacteria such as Lactobacillus and Bifidobacterium.

Government subsidies significantly influence the pricing dynamics of fermented milk products by affecting production costs, market competition, and consumer prices. For instance, in India, the Karnataka Milk Federation (KMF) has leveraged state-backed financial support to sell its products at prices 5-10% lower than competing brands.

This pricing strategy is made possible by substantial government investments—approximately Rs 1,200 crore annually—which help maintain low procurement costs for farmers and subsidize retail prices. As a result, dairy farmers in Karnataka receive Rs 27-35 per liter, which is notably higher than the Rs 22-25 per liter received by farmers in neighboring states like Maharashtra.

In the U.S., similar dynamics are observed with federal milk marketing orders (FMMOs), which aim to stabilize milk prices for producers. Recent proposals from the USDA to overhaul these pricing regulations are expected to restore higher prices for fluid milk, potentially benefiting producers by addressing previous losses estimated at $1.3 billion due to unfavorable pricing changes made by the 2018 farm bill.

Key Takeaways

• Fermented Milk Market size is expected to be worth around USD 510 Bn by 2033, from USD 307 Bn in 2023, growing at a CAGR of 5.2%.
• Cheese held a dominant market position in the fermented milk sector, capturing more than a 37.7% share.
• Plain/Natural flavors held a dominant market position in the fermented milk sector, capturing more than a 54.5% share.
• Household/Retail Consumption held a dominant market position in the fermented milk market, capturing more than a 46.1% share.
• Supermarkets & Hypermarkets held a dominant market position in the fermented milk market, capturing more than a 43.1% share.
• Asia-Pacific (APAC) is the dominating region in the fermented milk market, holding a substantial 43% market share with a valuation of USD 133.3 billion.

By Type

In 2023, Cheese held a dominant market position in the fermented milk sector, capturing more than a 37.7% share. This segment benefits significantly from its widespread use across various cuisines and its essential role in daily diets globally. Cheese’s popularity is bolstered by its versatility and the growing consumer interest in artisanal and premium varieties.

Following cheese, Yogurt is another key segment, celebrated for its health benefits, including probiotics which aid in digestion and enhance immune function. The demand for yogurt continues to rise as consumers increasingly prefer nutritious and functional food options.

Butter ranks next, primarily driven by its traditional use in cooking and baking. With a rising trend in home cooking and gourmet baking, butter remains a staple in kitchens worldwide.

Sour Cream also sees steady demand, especially in culinary applications for sauces and dips. Its creamy texture and tangy flavor make it a favorite for enhancing dishes.

By Flavor

In 2023, Plain/Natural flavors held a dominant market position in the fermented milk sector, capturing more than a 54.5% share. This segment benefits from consumers’ growing preference for products without added sugars or artificial flavorings, appealing to those seeking healthier, more natural dietary options.

Fruit-flavored fermented milk follows, offering a variety of options that combine the health benefits of dairy with the refreshing taste and nutritional value of fruit. Popular choices like strawberry, blueberry, and mango drive this segment’s appeal, particularly among younger demographics and those looking for a tastier alternative to plain dairy products.

Vanilla and Chocolate flavors also hold significant market shares, with vanilla appreciated for its classic, subtle flavor that pairs well with other foods, and chocolate favored for its rich, indulgent taste. These flavors are particularly popular in markets where consumers are accustomed to flavored milk products and desserts.

By End Use

In 2023, Household/Retail Consumption held a dominant market position in the fermented milk market, capturing more than a 46.1% share. This segment’s prominence is due to the widespread use of fermented milk products like yogurt, cheese, and butter in daily diets, with consumers appreciating both their nutritional benefits and culinary versatility.

Retail consumption benefits from the increasing availability of a wide range of fermented milk products in supermarkets and online platforms, catering to the health-conscious consumer looking for convenient, healthy food options.

The Food Service Industry also represents a significant segment, utilizing fermented milk products extensively in restaurants, cafes, and other dining venues. Products like sour cream, cheese, and yogurt are staples in culinary preparations, contributing flavor and texture to a variety of dishes, from appetizers to desserts.

Food Processing Industry uses fermented milk products as key ingredients in the manufacturing of goods like baked products, confectionery, and ready-to-eat meals. This sector capitalizes on the functional properties of fermented milk such as texture enhancement and flavor development, which are crucial for producing high-quality processed foods.

By Distribution Channel

Key Market Segments

By Type

• Cheese
• Yogurt
• Butter
• Sour Cream
• Others

By Flavor

• Plain/Natural
• Fruit
• Vanilla
• Chocolate
• Others

By End Use

• Household/Retail Consumption
• Food Service Industry
• Food Processing Industry

By Distribution Channel

• Supermarkets & Hypermarkets
• Convenience Stores
• Online Retail
• Specialty Stores
• Others

Driving Factors

Government initiatives promoting nutritious dairy consumption.

One major driving factor for the fermented milk market is the increasing consumer awareness of the health benefits associated with fermented milk products, such as improved digestion and immune system support. The market is experiencing substantial growth due to the rising demand for products that contribute positively to gut health and overall well-being.

This trend is supported by the growing preference among consumers for lactose-friendly dairy options, as the global prevalence of lactose intolerance continues to rise. Additionally, the inclusion of probiotics in fermented milk products, like yogurt, enhances their health benefits, further driving consumer demand.

Government initiatives also play a crucial role in supporting the fermented milk market by promoting the consumption of nutritious dairy products. These initiatives often focus on improving public health outcomes, which in turn boosts the market for health-oriented products like fermented milk.

The global fermented milk market is projected to grow significantly, with forecasts suggesting a continued expansion driven by these health trends and supported by innovations in product offerings that cater to health-conscious consumers. The market’s growth is also facilitated by advancements in dairy processing technologies that improve the safety, quality, and nutritional value of fermented milk products.

Restraining Factors

Innovation as a Response to Challenges in the Fermented Milk Sector

A major restraining factor for the growth of the fermented milk market is the increasing competition from non-dairy alternatives. As consumer preferences shift towards plant-based diets due to health, ethical, or environmental concerns, the demand for dairy-based fermented products like yogurt, cheese, and kefir is adversely affected. This shift is seeing more consumers opting for alternatives derived from almonds, soy, oats, and coconuts, which are often marketed as having similar probiotic and nutritional benefits as traditional dairy products​.

Additionally, the high costs associated with the production and storage of fermented dairy products also pose significant challenges. These products require specific starter cultures and conditions for fermentation, as well as cold storage facilities to maintain their quality and extend their shelf life. Such requirements increase operational costs and can make these products less accessible or attractive to consumers looking for more economical options​.

These factors, combined with stringent regulatory standards and the complex logistics of maintaining a cold chain from production to retail, can hinder market growth and profitability. As the market adapts to these challenges, companies may need to innovate and diversify their offerings to remain competitive and meet the evolving preferences of today’s consumers.

Growth Opportunity

Technological Advancements Enhancing Fermented Milk Products

One significant growth opportunity for the fermented milk market lies in the expanding demand in Asia-Pacific regions, driven by rising health consciousness and urbanization. This region, which includes rapidly developing economies like China and India, is witnessing increased consumer interest in health-focused products like yogurt and kefir, known for their probiotic benefits. The fermented milk market in Asia-Pacific is poised for significant expansion, with expected growth driven by modern trade developments, dynamic product innovations, and evolving consumer habits​.

Additionally, the market is benefiting from advancements in fermentation technology, which enhance product quality, nutritional value, and shelf life. Companies like Yakult and Danone are leveraging these technologies to produce probiotics that offer consistent health benefits and longer shelf life, thus meeting the increasing consumer demand for high-quality, health-oriented products. These technological advancements are opening new avenues for market expansion and driving growth across global regions​.

The growing trend towards functional foods is another key driver. As consumers increasingly seek foods that offer health benefits beyond basic nutrition, the demand for fermented milk products that enhance digestion and immune function continues to rise. This trend is particularly strong in regions like North America and Europe but is gaining momentum globally as well​.

Latest Trends

One of the major latest trends in the fermented milk market is the increasing demand for products with health benefits, particularly those enhanced by advanced fermentation technology. This trend is driven by a growing consumer preference for functional foods that support digestive health and boost immune function.

Products like kefir and Greek yogurt are gaining popularity because of their probiotic content and associated health benefits, which are becoming more important to health-conscious consumers​/

Additionally, there is a significant push towards innovation in product offerings. Companies are expanding their product lines to include fermented milk products with unique flavors, varied textures, and enhanced nutritional benefits.

This not only caters to a diverse range of consumer tastes but also helps to meet specific dietary needs. For example, the introduction of yogurts with reduced sugar content and the addition of functional ingredients like vitamins or omega-3 fatty acids are becoming more common as brands seek to differentiate themselves in a competitive market​.

Moreover, the use of precision fermentation and controlled microbial processes is becoming more widespread. These technological advancements help improve the shelf life, nutritional value, and overall quality of fermented milk products, making them more appealing to consumers and providing companies with new opportunities for market growth​.

These trends highlight a dynamic shift in the fermented milk market towards health-oriented and technologically enhanced products, reflecting broader consumer demand for foods that are not only tasty and convenient but also beneficial to health.

Regional Analysis

Asia-Pacific (APAC) is the dominating region in the fermented milk market, holding a substantial 43% market share with a valuation of USD 133.3 billion. The region’s market is propelled by increasing health awareness, rising disposable incomes, and the integration of Western dietary habits. Countries like China, Japan, and India are leading this growth, fueled by large populations and expanding middle classes who are embracing fermented milk products for their health benefits.

North America follows with a strong preference for functional dairy products enriched with probiotics. The market here is supported by well-established dairy consumption patterns and high consumer awareness of the health benefits associated with fermented milk products like yogurt and kefir.

Europe also shows significant market activity, with a focus on artisanal and organic fermented milk products. European consumers highly value the quality and source of their dairy products, driving demand for premium fermented dairy items. The region benefits from stringent food safety regulations that enhance product quality and safety.

Latin America, while smaller in comparison to other regions, is experiencing growth due to increasing urbanization and the rising popularity of dairy products as a dietary staple. Countries like Brazil and Mexico are witnessing gradual shifts towards more processed and packaged dairy products, including fermented milk.

Middle East & Africa (MEA) presents a growing market opportunity, particularly in urban centers where there is an increasing presence of international food brands and a growing expatriate population. The region is slowly adopting more diverse dairy products, including those that are fermented, though traditional dairy consumption patterns still dominate.

Key Regions and Countries

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

The fermented milk market is significantly shaped by the presence and strategic movements of key players such as Danone, Nestle SA, Arla Foods, and FrieslandCampina, among others. These companies have a strong global footprint and are known for their innovative product lines, which include a range of yogurt, kefir, and other fermented dairy products tailored to meet diverse consumer preferences and nutritional needs.

For instance, Danone and Yakult are prominent for their probiotic beverages, while Chobani and Yoplait are leaders in the yogurt market, known for their flavored and Greek yogurt varieties. Additionally, companies like Lactalis and Fonterra focus not only on consumer products but also play significant roles in the B2B sector, supplying dairy ingredients to other industries.

These major players are engaged in continuous research and development efforts to enhance the nutritional profile of their offerings and expand their market reach through strategic mergers, acquisitions, and collaborations, further intensifying the competition within the fermented milk industry.

Top Key Players in the Market

• Agri-Mark, Inc.
• Agrosuper
• Arla Foods
• Britannia Industries Limited
• Chobani, LLC
• Clover Industries Limited
• Dairy Farmers of America
• Danone
• Emmi AG
• Fonterra Co-operative Group
• Friesland Campina
• GENERAL MILLS, INC.
• Grupo Lala
• Kraft Heinz
• Lactalis
• Laïta
• Meggle
• Meiji Co., Ltd.
• Mother Dairy
• Muller Group
• Müller-Milch
• Nestle S A
• Parmalat
• Rainbow Dairy Foods
• Royal FrieslandCampina N.V.
• Yakult
• Yoplait

Recent Developments

In 2023 Agri-Mark, Inc., an established cooperative owned by over 450 dairy farm families in New England and New York, has made significant strides in the fermented milk sector in recent years.

In 2023 Agrosuper, a prominent player in the Chilean food industry, has made notable strides in the fermented milk sector, particularly.

Report Scope