Dairy products and alternatives in 2025: The big picture
Value sales of dairy products and alternatives in the UK have experienced modest growth in 2025, driven primarily by continued unit price increases rather than volume expansion. While inflation across the market has largely stabilised, it remains slightly elevated due to persistent global supply chain disruptions and prevailing economic uncertainty. Notably, the cheese and butter categories have seen the strongest price growth, fuelled by volatile ingredient costs on top of ongoing labour shortages among UK dairy farmers. These structural challenges have elevated input costs, which are expected to sustain upward pressure on retail prices. Weather-related disruptions have further compounded supply issues, with an unusually wet spring delaying pasture access for livestock, potentially tightening milk supply and inflating downstream product prices, particularly cheese.
Key trends in 2025
Health and wellness remains firmly at the forefront of demand within dairy products and alternatives. This is evident in the popularity of products perceived to support gut health, such as natural yoghurt, and sour milk products such as kefir, the latter of which has emerged as the most dynamic category in current value terms in 2025. The surge in consumer interest has been fuelled by increased media coverage on the benefits of gut microbiome, prompting retailers to significantly expand shelf space for fermented dairy offerings. Kefir’s success reflects a broader consumer pivot toward functional foods that offer tangible health benefits.
Competitive Landscape
Arla Foods has cemented its position as the leading brand manufacturer in dairy products and alternatives, leveraging the enduring strength of its flagship brands, Lurpak, Anchor, and Cravendale. The company’s success is rooted in its focus on premiumisation and continuous innovation, which aligns with rising consumer demand for quality, health-conscious options, and culinary versatility. A standout example of Arla’s innovation-led strategy is the 2024 launch of Lurpak Plant Based, a product designed to replicate the rich taste and functionality of traditional dairy butter while appealing to vegan and flexitarian consumers though a simplified ingredient list which underscores Arla’s agility in responding to market trends that favour transparency and cleaner labels.
Channel developments
Supermarkets retains its position as the leading distribution channel for dairy products and alternatives in the UK despite seeing a slight drop in its value share in 2025. The channel’s strong lead is underpinned by the unmatched accessibility of these stores, their broad product assortments, and their ability to cater to both mainstream and niche consumer preferences. Major retailers such as Tesco, Sainsbury’s, and Asda have leveraged their expansive store networks and robust supply chains to maintain a consistent availability of dairy staples like milk, cheese, and yoghurt, while also expanding their offerings in plant-based dairy. Their strategic focus on private label development and promotional pricing has further reinforced consumer loyalty, especially amid ongoing cost-of-living pressures
What next for dairy products and alternatives?
Both traditional dairy and plant-based alternatives are expected to maintain growth momentum over the forecast period, though the nature of growth will differ across the different categories. For conventional dairy, rising input costs stemming from climate change-related disruptions, such as erratic weather patterns affecting feed and pasture quality, and geopolitical instability across Europe are likely to push prices upward. Labour shortages and fluctuating domestic milk production will further strain supply chains, making price increases a structural feature of the market rather than a temporary trend. This inflationary environment may prompt consumers to reassess their purchasing habits, with many gravitating towards value-tier products or private label offerings that balance affordability with quality. At the same time, premiumisation will persist among more affluent or health-conscious shoppers.
Delivery:
Files are delivered directly into your account soon after payment is received and any tax certification is verified (where applicable).
This report comes in PDF with additional info in Excel included.
Overview:
Understand the latest market trends and future growth opportunities for the Dairy Products and Alternatives industry in United Kingdom 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 United Kingdom, 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 United Kingdom 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 United Kingdom?
- Which are the leading brands in Dairy Products and Alternatives in United Kingdom?
- How are products distributed in Dairy Products and Alternatives in United Kingdom?
- 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 United Kingdom?
- 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 the United Kingdom
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 the United Kingdom
KEY DATA FINDINGS
Baby food faces headwinds from cost pressures and increased regulatory focus
Danone retains lead as Kendamil rises through value-focused growth
Supermarkets dominate but discounters and digital channels drive growth
Modest value growth expected amid demographic decline
Baby food innovation shifts toward developmental support and ingredient integrity
Transparency and trust set to take centre stage in baby food reform
Butter and Spreads in the United Kingdom
KEY DATA FINDINGS
Consumers turn to butter as ingredient transparency becomes key
Butter and spreads market shifts toward natural appeal and functional indulgence
Supermarkets lead sales while e-commerce continues to gain ground
Butter drives modest growth as consumers prioritise taste and naturalness
Flavour development is set to balance premium appeal with everyday relevance
Clean label innovation could reinforce growth in margarine and spreads
Cheese in the United Kingdom
KEY DATA FINDINGS
Value growth in cheese supported by premiumisation and health trends
Saputo leads while Strings & Things capture momentum through snacking trends
Supermarkets lead cheese distribution as value and variety boosts sales
Category expansion expected through new formats and flavours
Value growth set to be driven through health and indulgence claims
Sustainability and authenticity set drive cheese differentiation amidst declining plant-based cheese sales
Drinking Milk Products in the United Kingdom
KEY DATA FINDINGS
Full fat and flavoured formats drive category momentum
Private label increases its dominance despite new brand activities
Discounters continue to gain ground while e-commerce shows promise
Future growth anchored in protein rich and premium milk offerings
Functional innovation set to support growth momentum
Regulatory pressure may shape the future formulations of drinking milk products
Yoghurt and Sour Milk Products in the United Kingdom
KEY DATA FINDINGS
Sour milk products the standout category in 2025 as consumers look for naturally healthy options
Danone leads as functional innovation gains ground while Arla sees strong showing
Supermarkets lead as online platforms expand their reach
Premium formats and gut health trends set to support growth
Yoghurt innovation set to continue as families seek nourishment and transparency
Single-serve formats and category blurring expand yoghurt’s role in daily diets
Other Dairy in the United Kingdom
KEY DATA FINDINGS
Stabilising prices and premium indulgence support growth in other dairy
Tradition meets trend as Ambrosia and Gu Desserts redefine the dairy dessert landscape
Supermarkets anchor sales while e-commerce and convenience channels expand
Sales of other dairy set to decline as health trends gain ground
Fromage frais is set to see positive performance with protein and wellness appeal
Cream set to benefit from home cooking trend and new innovations
Plant-Based Dairy in the United Kingdom
KEY DATA FINDINGS
Mixed performances seen within plant-based dairy in 2025
Alpro maintains its leadership as Rude Health climbs the rankings
Supermarkets remain key to sales of plant-based dairy despite rise of e-commerce
Plant-based dairy set for further gains as clean label and local sourcing gain traction
Health trends set to drive innovation and premiumisation in plant-based dairy
Innovation in plant-based cheese set to revive consumer interest
The following categories and subcategories are included:
Dairy Products and Alternatives
-
- Dried Baby Food
- Prepared Baby Food
- Other Baby Food
-
-
- Liquid Standard Milk Formula
- Powder Standard Milk Formula
-
- Liquid Follow-on Milk Formula
- Powder Follow-on Milk Formula
-
- Liquid Growing-Up Milk Formula
- Powder Growing-Up Milk Formula
-
- Liquid Special Baby Milk Formula
- Powder Special Baby Milk Formula
-
-
-
- Butter
- Cooking Fats
- Margarine and Spreads
-
- Spreadable Cheese
- Processed Cheese excl Spreadable
-
- Packaged Hard Cheese
- Unpackaged Hard Cheese
- Soft Cheese
-
-
- Dairy Only Flavoured Milk Drinks
- Flavoured Milk Drinks with Fruit Juice
-
-
-
- Fat-free Fresh Milk
- Semi Skimmed Fresh Milk
- Full Fat Fresh Milk
-
- Fat-free Shelf Stable Milk
- Semi Skimmed Shelf Stable Milk
- Full Fat Shelf Stable Milk
-
- Goat Milk
-
- Powder Milk
-
-
- Sour Milk Products
-
- Drinking Yoghurt
- Flavoured Yoghurt
- Plain Yoghurt
-
-
- Chilled Dairy Desserts
- Shelf Stable Dairy Desserts
- Chilled Snacks
- Coffee Whiteners
-
-
- Flavoured Condensed Milk
- Plain Condensed Milk
- Evaporated Milk
-
- Cream
-
- Flavoured Fromage Frais and Quark
- Plain Fromage Frais and Quark
- Savoury Fromage Frais and Quark
-
-
-
-
- Soy Drinks
- Other Plant-based Milk
- Plant-based Yoghurt
- Plant-based Cheese
-
Why buy this report?
- Gain competitive intelligence about market leaders
- Track key industry trends, opportunities and threats
- Inform your marketing, brand, strategy and market development, sales and supply functions
This report originates from Passport, our Dairy Products and Alternatives research and analysis database.
NEW REPORT GUARANTEE
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extraction Free!