Dairy products and alternatives in 2025: The big picture
In 2025, dairy products and alternatives in Malaysia demonstrated mixed trends, with retail value sales continuing to grow while retail volume sales, which held a marginally higher share than the foodservice channel, recording a slight decline. The growth in value sales can be attributed to the essential nature of key dairy categories such as butter and spreads, cheese, and drinking milk products, which are consumed daily across all demographic segments. These products benefit from wide availability through both modern retail outlets, including supermarkets and convenience stores, and traditional grocery shops, ensuring that they remain accessible, even in less urbanised areas.
Key trends in 2025
A key trend noted in 2025 was the growing consumer focus on nutritional benefits, driven largely by increasing health consciousness. Parents, in particular, placed a high priority on milk formula that supports immunity and digestive health, reflecting heightened concerns about child wellness. This trend was crucial in driving sales, especially amid declining birth rates, as it aligned with the broader shift towards health and wellness among Malaysian consumers. The emphasis on child wellness not only bolstered sales of milk formula offering specific health benefits but also fostered brand loyalty among parents who sought the best for their children.
Competitive Landscape
The competitive landscape of dairy products and alternatives in Malaysia continued to be led by Dutch Lady Milk Industries Bhd in 2025, which maintained its strong position through a combination of a well-established brand presence, a broad product portfolio, and a wide distribution network. The company was further supported by strong consumer trust, effective marketing initiatives, and a focus on nutritional innovation, all of which resonated deeply with Malaysian consumers. Dutch Lady also introduced resealable closures for drinking milk products in liquid cartons in December 2024. This packaging innovation not only aimed to enhance consumer convenience and product freshness but also met the rising demand for practical and hygienic solutions, particularly among busy families and on-the-go consumers. Additionally, the company's strong engagement with local suppliers to ensure a sustainable raw milk supply and support the local dairy industry aligned with the national goal of achieving 100% fresh milk self-sufficiency, reinforcing its commitment to the community and sustainability.
Channel developments
Small local grocers remained the leading distribution channel for dairy products and alternatives in 2025, despite experiencing only moderate growth. The convenience of the channel’s locations near residential areas, combined with the availability of parking, makes it a preferred choice for consumers seeking quick and affordable grocery shopping. These stores offer a range of products at competitive prices, attracting budget-conscious customers, in addition to providing them with a personalised experience.
What next for dairy products and alternatives?
Over the forecast period, dairy products and alternatives in Malaysia is expected to experience flat retail value growth due to the maturity of most product categories, including baby food, butter and spreads, cheese, and other dairy. This saturation is likely to limit innovation and discourage manufacturers from introducing new products, leading to a stable but stagnant market. However, the industry's leading companies, such as Dutch Lady Milk Industries Bhd, Farm Fresh Bhd, and Fraser & Neave Holdings Bhd, are anticipated to expand their product portfolios within drinking milk products. These companies are increasingly investing in the local dairy industry, which is expected to enhance their supply chain and product offerings, potentially revitalising certain segments.
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Overview:
Understand the latest market trends and future growth opportunities for the Dairy Products and Alternatives industry in Malaysia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
Data and analysis in this report provides further detailed coverage dedicated to a comprehensive range of core packaged food categories.
If you're in the Dairy Products and Alternatives industry in Malaysia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
The Dairy Products and Alternatives in Malaysia report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volume and value sizes, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent research methodology, conducted in-country
This report answers:
- What is the market size of Dairy Products and Alternatives in Malaysia?
- Which are the leading brands in Dairy Products and Alternatives in Malaysia?
- How are products distributed in Dairy Products and Alternatives in Malaysia?
- How is the rise of e-commerce and/or the expansion of modern grocery retail impacting traditional retail?
- What are the key health and wellness concerns driving, or challenging, sales in Dairy Products and Alternatives?
- How significant are vegan and vegetarian dietary requirements in determining sales growth in Malaysia?
- How has COVID-19 impacted consumer demand? To what extent have lockdown, home seclusion and stockpiling boosted sales? Will the longer term economic repercussions of the pandemic stimulate or suppress future growth?
- Where is future growth expected to be most dynamic?
- How significant will values-based claims, such as sustainability and ethical labelling, be in supporting future growth and brand equity?
Dairy Products and Alternatives in Malaysia
Dairy products and alternatives in 2025: The big picture
Key trends in 2025
Competitive Landscape
Channel developments
What next for dairy products and alternatives?
DISCLAIMER
Baby Food in Malaysia
KEY DATA FINDINGS
Demographic changes limit baby food’s growth in Malaysia
Dutch Lady Milk Industries retains leadership in consolidated competitive landscape
Mix of distribution channels to satisfy different consumer needs
Sluggish growth prospects in market with falling birth rates
Rising interest in functionality set to drive up value of baby food
Players look to innovation and expansion to remain relevant
Butter and Spreads in Malaysia
KEY DATA FINDINGS
Busy lifestyles and foodservice competition hinder retail demand
Upfield strengthens leadership in consolidated competitive landscape
Convenience and competitive pricing support dominance of small local grocers
Further challenges for retail demand over the forecast period
Health and wellness trend to increasingly influence new product development
Players’ strategies to expand presence and manage costs
Cheese in Malaysia
KEY DATA FINDINGS
Processed cheese remains popular option, but foodservice continues to drive overall demand
Mondelez retains leadership amid increasing competition
Proximity to communities favours small local grocers
In stagnant category, players will look to diversify portfolios and consumption occasions
Marketing health and wellness benefits likely to increasingly emerge
More stringent regulations could influence new product development
Drinking Milk Products in Malaysia
KEY DATA FINDINGS
Healthy perception supports positive performance of drinking milk products
Dutch Lady Milk strengthens leadership, while Fresh Farm makes further gains
Small local grocers leads distribution, while foodservice benefits from rising coffee culture
Positive outlook but sugar tax increase to potentially impact flavoured milk drinks
Health and wellness awareness to strongly support demand for cow’s milk
Expansion and further investment in local production likely
Yoghurt and Sour Milk Products in Malaysia
KEY DATA FINDINGS
Drinking yoghurt continues to drive sales, favoured for its convenience and portability
Major players benefit from exit of Dutch Lady Milk Industries
Small local grocers and hypermarkets suited to different shopping occasions
Indulgence aspect likely to hinder stronger performance
Health and wellness aspect offers some growth opportunities
Rise in sugar tax likely to impact drinking yoghurt’s future development
Other Dairy in Malaysia
KEY DATA FINDINGS
Other dairy remains popular category for both retail and foodservice in Malaysia
Fraser & Neave Holdings strengthens convincing lead of other dairy
Convenience and affordability support dominance of small local grocers
Moderate growth predicted for mature category over the forecast period
Health and wellness trend has potential to shape other dairy
New product development to focus on plant-based and specific health benefits
Plant-Based Dairy in Malaysia
KEY DATA FINDINGS
Niche category has limited reach due to pricing and lack of awareness
Fraser & Neave Holdings retains slim lead of consolidated competitive landscape
Small local grocers and hypermarkets appeal to different shopping occasions
Foodservice offers greater prospects for plant-based dairy over forecast period
Health and wellness trend offers new development potential
Potential price hikes due to import tariffs on soybeans will be negative factor
The following categories and subcategories are included:
Dairy Products and Alternatives
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- Dried Baby Food
- Prepared Baby Food
- Other Baby Food
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- Liquid Standard Milk Formula
- Powder Standard Milk Formula
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- Liquid Follow-on Milk Formula
- Powder Follow-on Milk Formula
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- Liquid Growing-Up Milk Formula
- Powder Growing-Up Milk Formula
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- Liquid Special Baby Milk Formula
- Powder Special Baby Milk Formula
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- Butter
- Cooking Fats
- Margarine and Spreads
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- Spreadable Cheese
- Processed Cheese excl Spreadable
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- Packaged Hard Cheese
- Unpackaged Hard Cheese
- Soft Cheese
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- Dairy Only Flavoured Milk Drinks
- Flavoured Milk Drinks with Fruit Juice
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- Fat-free Fresh Milk
- Semi Skimmed Fresh Milk
- Full Fat Fresh Milk
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- Fat-free Shelf Stable Milk
- Semi Skimmed Shelf Stable Milk
- Full Fat Shelf Stable Milk
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- Goat Milk
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- Powder Milk
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- Sour Milk Products
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- Drinking Yoghurt
- Flavoured Yoghurt
- Plain Yoghurt
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- Chilled Dairy Desserts
- Shelf Stable Dairy Desserts
- Chilled Snacks
- Coffee Whiteners
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- Flavoured Condensed Milk
- Plain Condensed Milk
- Evaporated Milk
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- Cream
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- Flavoured Fromage Frais and Quark
- Plain Fromage Frais and Quark
- Savoury Fromage Frais and Quark
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- Soy Drinks
- Other Plant-based Milk
- Plant-based Yoghurt
- Plant-based Cheese
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This report originates from Passport, our Dairy Products and Alternatives research and analysis database.
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