The report examines the economic landscape of Estonia and provides information on major monetary indicators, foreign trade and government finance. The economy contracted in real terms in 2024, dragged down by exports, private consumption, investments. Furthermore, global economic slowdown, increasing geopolitical tensions and economic fragmentation as well as tight financial conditions pose risks to the country’s economic outlook.

Volume growth of cheese is expected to slow to stagnation in Estonia in 2025. Rising prices - driven in part by the increased VAT rate - are limiting its expansion. Nevertheless, Estonians show no signs of giving up cheese, which continues to enjoy strong cultural and culinary relevance. Packaged hard cheese remains the most popular category, due to its versatility in cooking and snacking, which helps support stable demand. The growing availability of pre-sliced cheeses, often priced similarly t

Other dairy is expected to register a solid performance in current value terms in Estonia in 2025. However, this stems primarily from significant price increases rather than a rise in consumer demand. Inflationary pressures, including higher production costs and increased VAT, have pushed up retail prices upwards across most categories.

Volume sales of drinking milk products are expected to remain stable in Estonia in 2025, continuing the trend of the previous year. The market is dominated by full fat fresh milk, which is a staple for the majority of households. Local consumers continue to overwhelmingly prefer fresh milk to shelf stable products as the former is considered to be healthier and contain fewer preservatives. Demand for shelf stable milk products is further depressed by the fact that most homes in Estonia have refr

Retail sales of baby food in Estonia are expected to continue declining in volume terms in 2025. The primary driver behind this trend is the country’s falling birth rate, which significantly reduces the consumer base for these products. Even rising prices - partly driven by a 2% VAT increase in July 2025 - have not been able to offset the drop in volume sales. In fact, the price hikes have likely actually discouraged bulk purchases among budget-conscious families.

Volume sales of yoghurt and sour milk products in Estonia are expected to decline in 2025. The market has become largely saturated, with limited room for further expansion. Sour milk products, especially kefir, which dominates the category - are long-established staples in the local diet. While kefir maintains a solid reputation for its probiotic benefits, it is relatively mature and shows only modest growth potential. Flavoured yoghurt also continues to face challenges, largely due to its high

The market for butter and spreads in Estonia is expected to see a decline in volume sales in 2024, while current value sales will continue to rise. This trend is being driven by a consumer shift towards butter, which is perceived as a healthier and more premium product. Although margarine and spreads are more affordable, growing health concerns - particularly over trans fats, which have been linked to heart disease - have led consumers to favour butter. Cooking fats are also experiencing a conti

The market for dairy products and alternatives in Estonia is expected to see a flat performance in volume terms in 2025. Despite early signs of economic recovery, a VAT increase, implemented in July, has led to a noticeable rise in retail prices across most food categories, including dairy. As a result, consumers are becoming more cautious with their spending, prioritising essentials and cutting back on discretionary purchases.

While sales of plant-based dairy products in Estonia remain modest compared to regular dairy offerings, the market is expected to continue seeing robust growth in both volume and current value terms in 2025. This will be driven primarily by the rising popularity of plant-based milk, which has expanded beyond traditional soy milk to include oat, almond, coconut, and other nut-based variants. The growth is particularly supported by younger, urban consumers, many of whom perceive plant-based option

Insight into income, wealth and expenditure of consumers and households is vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

Current value growth for sugar confectionery in Estonia in 2025 is projected to be much stronger than in 2024, when sales only increased marginally. This is primarily because cost pressures are driving up unit prices, though the category also looks set to record a lower rate of decline in volume terms than it did the previous year. Overall demand has improved slightly thanks to a substantial drop in domestic inflation, which has bolstered confidence among the population and made people somewhat

Gum in Estonia is set to show a substantially improved performance in current value growth terms in 2025. While this is mainly due to price hikes imposed to cover still-elevated manufacturing and import costs, the category is also expected to record a lower rate of decline in retail volume sales than in 2024. Overall demand has picked up somewhat thanks to a nascent recovery in consumer confidence and spending facilitated by the gradual easing of domestic inflationary pressures. Gum products hav

Chocolate confectionery in Estonia is poised to register double-digit growth in current value sales in 2025. This is almost entirely due to a steep rise in global cocoa prices, however, as retail volume sales are set to contract for the third year in a row. The overall rate of volume decline should be moderately slower than in 2024, mainly because the scope for price-based promotional activity has improved somewhat as domestic inflationary pressures have receded from the highs witnessed during t

With rising input costs and a VAT hike that took effect from July placing upward pressure on unit prices, sweet biscuits, snack bars and fruit snacks in Estonia is set to post an improved result in current value growth terms in 2025. Retail volume sales meanwhile are expected to contract for the second year in a row due to heightened budget-consciousness. The rate of decline should be slower than in 2024, however, as a more stable inflationary environment in comparison to the latter part of the

While savoury snacks current value sales are only expected to increase marginally in 2025, this would be an improvement on the contraction witnessed in 2024. The return to growth is largely explained by unit price hikes imposed to offset elevated cost pressures and a rise in VAT, as volume sales are set to fall for the second year in a row. However, the pace of volume decline has slowed thanks to a sustained reduction in domestic inflation, which has bolstered price-based promotional activity an

Snacks in Estonia is poised to register a markedly improved performance in current value growth terms in 2025. This is primarily due to unit price increases imposed to offset elevated cost pressures and a hike in VAT that took effect from July, however, as retail volume sales are set to contract for the second year in a row. Nonetheless, with the recent spike in domestic inflation having now largely receded, a nascent recovery in confidence and disposable income levels among consumers should hel

Ice cream in Estonia is predicted to register a modestly improved performance in current value growth terms in 2025. This is primarily due to unit price hikes resulting from cost pressures and an increase in the VAT rate, as volume growth looks set to be slower than in 2024. Nonetheless, it is the only one of the six main snacks categories expected to expand in volume terms over the year as a whole. Its resilient showing in this respect is partly testament to the strength of traditional consumpt

With consumers continuing to exercise greater caution in their spending habits following the recent spike in the cost of living, wine in Estonia saw total volume sales contract for a second consecutive year in 2024. The rate of decline was deeper than in 2023, as heightened budget-consciousness caused on-trade demand to plummet. Off-trade volume sales also remained in negative territory, but picked up slightly thanks to improved consumer sentiment amidst a significant reduction in inflation. Mor

Total volume sales of beer in Estonia only increased marginally in 2024, mainly because on-trade consumption fell sharply as elevated cost-of-living concerns led many people to rein in discretionary spending. The impact of this trend was mitigated somewhat by rising inbound tourist numbers, spells of warmer weather and the staging of several festivals and similar events, especially during the summer, but the category still registered a double-digit volume decline at the on-trade level. In contra

Cider/perry in Estonia showed another negative performance in total volume sales terms in 2024 as consumers remained inclined to curb non-essential spending due to the rising cost of living. The contraction was sharper than in 2023, mainly because squeezed household budgets caused on-trade demand to fall dramatically. Off-trade consumption held up much better, with the rate of decline actually slowing slightly from the previous year. This improvement was largely attributable to increased price-b

Total volume sales of spirits in Estonia declined for the second year in a row in 2024, and at a considerably steeper pace than in 2023. As with alcoholic drinks in general, demand was depressed by more cautious attitudes to discretionary spending in the wake of the rapid rise in the cost of living during the latter part of the review period. This trend took the heaviest toll in on-trade channels, though off-trade consumption also continued to fall. Due to comparatively high unit prices, the cat

Alcoholic drinks in Estonia saw growth in total current value sales slow sharply in 2024, while total volume sales contracted for a second consecutive year. With cost-of-living pressures remaining elevated, consumption continued to be subdued by more cautious attitudes to discretionary spending. The negative impact of this trend was most apparent at the on-trade level, where the vast majority of categories posted steep volume declines. Retail demand proved much more resilient, with overall off-t

RTDs significantly outperformed the other main alcoholic drinks categories in Estonia in 2024, with growth in total volume sales remaining robust and accelerating from 2023. Its resilience to the market-wide downturn was underpinned by the fact that demand is heavily concentrated among young adults. These consumers were less inclined to respond to elevated cost-of-living pressures by reducing spending on alcohol, as they tend to have fewer financial obligations and place a higher priority on soc

In 2024, cigarettes in Estonia witnessed another year of retail volume sales decline. The downward trajectory is largely attributable to rising excise taxes on tobacco products, which have pushed cigarette prices higher. Increasing public health awareness has also contributed to a reduction in smoking prevalence. Additionally, government initiatives aimed at improving public health, along with stricter regulations on tobacco sales and advertising, have significantly influenced consumer behaviour