Fermented Milk Products Market Outlook 2025–2031

The global Fermented Milk Products Market size is estimated at US$ 312,000 million in 2025 and is projected to reach approximately US$ 458,000 million by 2031, growing at a CAGR of 6.6% during 2025–2031.
Rising health awareness, growing probiotic consumption, and increasing demand for functional dairy products are supporting sustained market expansion globally.

Market Historical Performance

The Fermented Milk Products Market has shown resilient growth over the past five years, driven by steady consumer demand for nutritious and gut-friendly food options. From 2020 to 2024, the market expanded from nearly US$ 258 billion to around US$ 298 billion, reflecting a historical CAGR of approximately 3.7%.

During the COVID-19 period, fermented dairy products such as yogurt, buttermilk, and kefir witnessed increased household consumption due to their perceived immunity-boosting and digestive health benefits. Post-2021, innovation in flavors, lactose-free variants, and fortified products further strengthened market performance, especially in urban and health-conscious consumer segments.

What Is Driving the Fermented Milk Products Market?

Fermented milk products are dairy-based foods produced through controlled fermentation using beneficial bacteria, enhancing shelf life, digestibility, and nutritional value. Increasing awareness of gut health and the role of probiotics in immunity and digestion has positioned fermented milk products as daily dietary staples rather than occasional foods.

Government dietary guidelines promoting balanced nutrition, combined with rising disposable incomes and westernization of diets in developing economies, are accelerating adoption. In addition, food safety regulations and quality standards in developed markets are supporting product innovation and premiumization across fermented dairy categories.

Market Overview & Key Statistics

• Market Size 2025: US$ 312 Billion
• Forecast 2031: US$ 458 Billion
• CAGR (2025–2031): 6.6%
• Historical CAGR (2020–2024): ~3.7%
• Major End Users: Household Consumers, Foodservice, Retail & Institutional Buyers
• Fastest-Growing Region: Asia-Pacific

The market is further supported by rising investments in cold chain infrastructure, modern retail expansion, and increased penetration of packaged dairy products in emerging economies.

Key Market Drivers

• Rising Consumer Focus on Gut Health and Immunity
  Probiotic-rich fermented milk products are increasingly consumed to support digestion, immunity, and overall wellness.
• Urbanization and Changing Dietary Habits
  Busy lifestyles are driving demand for convenient, ready-to-consume fermented dairy products across urban populations.
• Product Innovation and Premiumization
  Manufacturers are introducing low-fat, lactose-free, plant-blended, and fortified fermented milk products to attract diverse consumers.
• Expansion of Modern Retail and Cold Chain
  Improved distribution networks and refrigeration facilities are enabling wider availability of fermented milk products globally.

Market Restraints & Challenges

• Lactose Intolerance in Certain Populations: Limits consumption despite product innovations.
• Short Shelf Life: Requires robust cold storage and logistics, increasing operational costs.
• Price Sensitivity in Developing Markets: Premium probiotic products may face affordability challenges.
• Regulatory Compliance: Strict food safety and labeling regulations can increase production complexity.

Fermented Milk Products Market Segment Analysis

1. By Product / Technology / Type

➤ Yogurt (Largest Segment – ~44% Share)
Includes set yogurt, stirred yogurt, Greek yogurt, and drinkable yogurt, driven by daily consumption and wide flavor variety.

➤ Cultured Milk & Buttermilk (~23% Share)
Popular in Asia and the Middle East, growing at ~6.9% CAGR due to traditional consumption patterns.

➤ Kefir and Probiotic Drinks
Fastest-growing category, expanding at over 9% CAGR, supported by premium health positioning.

➤ Other Fermented Dairy Products
Includes sour cream, skyr, and regional fermented milk products with stable demand.

2. By Application / End-User

➤ Household Consumption (62% Market Share)
Daily consumption of yogurt and cultured milk products drives the majority of market demand.

➤ Foodservice & HoReCa (21% Share)
Restaurants, cafes, and hotels increasingly use fermented dairy in beverages, desserts, and breakfast menus.

➤ Institutional & Commercial Buyers
Schools, hospitals, and corporate cafeterias are adopting fermented milk products for nutritional programs.

3. By Region / Geography

➤ Asia-Pacific (Largest Market – ~39% Share)
• Strong consumption base in India, China, and Japan
• Growing middle-class population and dairy processing capacity
• High demand for traditional fermented milk beverages

➤ Europe (~28% Share)
• Mature market with high per-capita yogurt consumption
• Strong preference for organic and clean-label fermented dairy

➤ North America (~22% Share)
• Rising demand for Greek yogurt and probiotic drinks
• Health-driven consumption trends

➤ Latin America & Middle East & Africa
• Expanding urban populations and improving cold chain infrastructure

Emerging Trends in the Fermented Milk Products Market

• Growing demand for probiotic and functional dairy products
• Increasing popularity of lactose-free and low-sugar variants
• Clean-label and organic fermented milk products
• Regional flavor innovations tailored to local preferences
• Blending of dairy with plant-based ingredients for hybrid products

Investment Opportunities

• Expansion of probiotic yogurt and kefir production facilities
• Investment in cold chain and dairy processing infrastructure
• Product innovation in functional and fortified fermented milk
• Market entry into emerging economies with high dairy consumption
• Strategic partnerships with retail and foodservice chains

Despite pricing and logistics challenges, long-term returns remain attractive due to consistent consumer demand and health-focused dietary shifts.

Key Companies in the Fermented Milk Products Market

• Danone S.A.
• Nestlé S.A.
• Lactalis Group
• Fonterra Co-operative Group
• Arla Foods
• Yakult Honsha Co., Ltd.
• FrieslandCampina
• Amul (GCMMF)
• Chobani LLC

Future Outlook

The Fermented Milk Products Market is expected to maintain steady growth through 2031, supported by rising health awareness, product innovation, and expanding consumption in emerging regions. Functional benefits, premium offerings, and localized product development will shape competitive dynamics over the forecast period.

Conclusion

The Fermented Milk Products Market represents a vital segment of the global dairy industry, combining nutrition, convenience, and functional health benefits. With strong consumer acceptance and evolving dietary preferences, the market offers long-term growth opportunities for producers, investors, and distributors worldwide.

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