In 2025, the global retail value of dairy products and alternatives is projected to reach USD705.5 billion, growing by 2.0% in constant terms and 6.4% in current terms (fixed 2025 exchange rates), with pricing playing a central role. Amid volatile production costs and shifting consumer lifestyles and priorities, Euromonitor has identified five key trends shaping the industry’s future.
Price highs meet market turbulence
In 2025, dairy faces mounting pressures globally from trade tensions, livestock disease and climate change. A temporary US-China trade deal eased tariffs, briefly boosting dairy ingredient trade. Meanwhile, disease outbreaks in Europe and extreme weather in Australia have tightened supply and driven up prices.
Despite the disruptions, retail volume sales rose slightly by 1.3% in 2025, reflecting resilient consumer demand
Source: Euromonitor International
To stay competitive amid ongoing volatility, companies must reinforce supply chains, diversify geographically, mostly where there is high unmet potential, and balance affordability with value. Shelf-stable formats, regional sourcing and smarter pricing strategies will be key to unlocking demand in price-sensitive regions and protecting brand trust.
Dairy is evolving into a multifunctional wellness platform, driven by demand for science-backed benefits across need states such as energy, gut health and mental clarity. Brands are primarily innovating with convenient formats like RTD drinks and yoghurt pouches, combining protein with botanicals, probiotics and fibre. To build trust, functional claims must be clear and credible, supported by natural ingredients and clean labels. Recent launches reflect this trend: The Collective’s yoghurt pouches in the UK are tailored to specific need states such as “restore” and “kickstart”, while Danone’s Oikos Fusion, launched in summer 2025 in the US, is high in protein and designed for GLP-1 users. Targeted innovation is reigniting interest; brands must align with modern routines and wellness aspirations, positioning dairy as a daily health staple.
Life stage reimagined
Demographic shifts are reshaping innovation. Declining birth rates challenge infant nutrition, yet demand for premium formulas and baby snacks remains strong. Brands like Yili, with its organic premium formula with HMO blends in China, and Indonesia’s Yummy Bites, offering allergen-free and organic baby snacks, succeed through added-value offerings.
Meanwhile, ageing populations (65+) will grow by 54% over 2025-2040, and are driving demand for clean label dairy products with functional benefits for heart health, digestion, cognition and sleep. In Japan, Morinaga’s new Ninchi Kinou Taisaku probiotic yoghurt targets cognitive support. To remain competitive, companies must embed life-stage nutrition into strategy, with success hinging on natural ingredients and alignment with evolving health priorities.
Re-energising plant-based dairy
After years of rapid expansion, plant-based dairy is entering a more mature phase, with growth slowing across key markets. To restore momentum, brands must move beyond basic alternatives and invest in added value and functionality. For instance, Minor Figures’ Hyper Oat, launched in April 2025 in the UK, showcases how adaptogens and nootropics can elevate plant-based drinks with benefits like energy, cognitive clarity and immune health. In Finland, Fazer’s revamped Aito Oat Gurt, launched in summer 2025, has improved taste and texture, leverages national pride by using locally-produced oats and offers health benefits through fortification. These examples highlight the importance of sensory upgrades and functional nutrition. To compete with private label, brands must also align with evolving routines, while prioritising clean label formulations to stand out from ultra-processed alternatives.
Dairy snacking is evolving into a wellness-driven space. Consumers seek indulgent yet functional formats that suit diverse occasions, from breakfast and fitness to social sharing. Texture, convenience and emotional satisfaction are key. For example, in Hungary, Pöttyös Protein Rudi was launched in January 2025, offering a guilt-free modern twist on a traditional chilled dairy snack by incorporating whey protein isolate, inulin for added fibre and no added sugar. In China, The Laughing Cow taps into local breakfast habits by pairing cheese with familiar items like youtiao, aiming to unlock new consumption occasions. As snacking becomes part of daily wellbeing, dairy brands must innovate with portion-controlled formats and multisensory experiences that align with modern routines and eating occasions.
Outlook: Driving growth through value and resilience
Looking ahead, pricing volatility will remain a defining challenge for the dairy industry. To stay competitive, brands must strike a balance between affordability and added value, leveraging innovation through functionality and format to justify price points and sustain consumer trust.
Learn more about the state of dairy products and alternatives and the trends shaping the industry in our report, The World Market for Dairy Products and Alternatives.