Where Consumers Shop for Dairy Products and Alternatives

June 2025

Dairy products and alternatives is set to grow over the forecast period, driven by demand for health benefits and value for money options. Rising global prices are making consumers more cost-sensitive, boosting discounters. E-commerce is growing rapidly, supported by improved cold chain logistics. Retailers are also expanding private label to meet demand for affordable, quality dairy alternatives.

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This report comes in PPT.

Key Findings

Small local grocers driven by convenience and comfort

Small local grocers have experienced an important boost in their performances. Offline retail has been driven by convenience and comfort, and growth has been particularly evident in emerging economies.

E-commerce consolidates as key channel in the dairy industry

Mainly driven by the baby food category, the retail e-commerce channel has been able to maintain double-digit growth rates in the dairy products and alternatives industry, despite the slowdown it has experienced after its peak during the pandemic.

Sustainability and health awareness are set to drive the industry

Producers are continuously innovating and improving their sustainability long-term credentials, mostly based on carbon neutrality and food waste. Moreover, health awareness is a trend that has consolidated as a key factor when choosing dairy products, mostly driven by functionality.

Inflationary pressures create a positive landscape for discounters

The world has been experiencing increasing price levels and, as a consequence, consumers have become increasingly price sensitive. This situation has created an interesting landscape for discounters, as they offer consumers a more affordable portfolio of products.

Scope
Key findings
Dairy sector decelerates in 2024 due to inflation
Dairy and plant-based dairy growth driven by cheese
Developing regions to drive growth as consumers look for value-added products
E-commerce gains share, while supermarkets and hypermarkets decline
Baby food leads e-commerce sales due to less dependence on strict cold chain
Small local grocers and discounters take share from supermarkets
Discounters and small grocers show strongest growth over the historic period
Discounters drives grocery retailers’ growth
Walmart and Schwarz maintain leading positions over the historic period
Private label continues to grow in an environment of decreasing consumer purchasing power
Premiumisation of private label drives growth
E-commerce still posts a high growth rate albeit waning compared to the review period…
…as strong cold chain is required for many dairy products and alternatives
Dairy products and alternatives remains a less explored category for marketplaces
Baby food in Korea drives e-commerce growth in Asia Pacific
GDP per capita and population growth will contribute to the growth of the industry
Key takeaways
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