Dairy products and alternatives in 2025: The big picture
Value sales of dairy products and alternatives in Uganda rose in 2025, supported by strong government backing for the dairy industry and increased investment in processing and distribution infrastructure. The sector remains a cornerstone of Uganda’s Vision 2040 and National Development Plan III, both of which position dairy as a key pillar of agro-industrialisation. Growth has been fuelled by the government’s targeted initiatives, including the provision of cold chain facilities and milk collection centres, which have improved efficiency and reduced post-harvest losses, particularly in remote areas. These measures have also helped smallholder farmers access formal markets and stabilise incomes, contributing to overall sector resilience.
Key trends in 2025
Uganda’s dairy output reached approximately 5.3 billion litres in 2025, of which only around 800 million litres were consumed locally, leaving substantial untapped export potential. However, the industry remains vulnerable to climatic variability, which causes fluctuations in supply and pricing across seasons. Inflation further exacerbated cost pressures on both farmers and processors, impacting profitability and consumer affordability. To mitigate these risks, manufacturers increasingly diversified into value-added dairy products, including fortified milk, flavoured yoghurt, and powdered milk formats designed for longer shelf life and easier transportation.
Competitive Landscape
Pearl Dairies Ltd remained one of the leading companies in dairy products and alternatives in Uganda in 2025. Its flagship brand, Lato Milk, enjoys strong recognition locally and regionally, supported by a wide product portfolio spanning fresh, flavoured, and powdered milk as well as yoghurt. The company has also entered the infant food segment with Lato Nadolac, a cereal with milk targeting infants aged 6 to 36 months. Ongoing investment from international development financiers, including the IFC and FMO, has enabled the company to expand its powdered milk plant and enhance packaging operations in both Uganda and Kenya. With distribution extending to markets such as Egypt, Tanzania, DRC, and Zambia, Pearl Dairies has consolidated its reputation as a leading exporter of Ugandan dairy.
Channel developments
Supermarkets and hypermarkets remained the leading distribution channels for dairy in 2025, benefitting from their extensive product assortments and attractive in-store displays. These outlets continue to appeal to urban consumers who prefer the convenience of one-stop shopping and greater product variety, particularly for value-added and branded dairy goods. However, smaller neighbourhood grocery stores still play an important role in rural and peri-urban areas, particularly for single-serve milk sachets and yoghurt.
What next for dairy products and alternatives?
Looking ahead, value sales of dairy products and alternatives are set to rise steadily over the forecast period. Government initiatives will remain a core driver, with continued support from the Uganda Industrial Research Institute (UIRI) and the Uganda Development Bank (UDB) aimed at improving processing facilities, providing low-interest financing, and upgrading cold chain infrastructure. These measures will enhance product shelf life and market reach, while supporting value addition and smallholder farmer integration into formal supply chains.
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Overview:
Understand the latest market trends and future growth opportunities for the Dairy Products and Alternatives industry in Uganda 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 Uganda, 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 Uganda 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 Uganda?
- Which are the leading brands in Dairy Products and Alternatives in Uganda?
- How are products distributed in Dairy Products and Alternatives in Uganda?
- 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 Uganda?
- 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 Uganda
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
Key Data Findings
2025 Developments
Levied taxes on imported processed dairy products limited affordability but supported local manufacturing
Competition among manufacturers spurred innovation and value addition
Strong distribution networks reinforced accessibility and consumer trust
Prospects and Opportunities
High taxes on imports and exemptions for local producers to shape the competitive landscape
Establishment of breast milk banks to moderate demand for infant formula
Growing competition and innovation to support steady category expansion
Category Data
Key Data Findings
2025 Developments
Government support programmes and infrastructure development sustain dairy growth
Competition intensifies as manufacturers expand product portfolios and marketing
Expanding retail infrastructure and e-commerce access drive distribution efficiency
Prospects and Opportunities
Climatic challenges to remain a structural constraint on milk output
Product innovation and health-oriented marketing to drive premiumisation
Government initiatives and school milk programmes to support demand
Category Data
2025 Developments
Prospects and Opportunities
Category Data
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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