UK Dairy Market Research Report By Product Type (Milk, Cheese, Butter, Yogurt, Dairy Cream, Ice Cream, Others), By Category (Organic, Conventional), By Distribution Channel (Store-Based, Non-Store-Based) and By Store-Based (Supermarkets Hypermarkets, Convenience Stores, Others) - Forecast to 2035

UK Dairy Market Overview

As per MRFR analysis, the UK Dairy Market Size was estimated at 29.98 (USD Billion) in 2023.
The UK Dairy Market Industry is expected to grow from 31.02(USD Billion) in 2024 to 42 (USD Billion) by 2035. The UK Dairy Market CAGR (growth rate) is expected to be around 2.793% during the forecast period (2025 - 2035).

Key UK Dairy Market Trends Highlighted

The UK Dairy Market has been affected by consumer perspectives as well as industry activities. A major factor in this market is the increasing need for dairy substitutes due to dietary changes. This development has motivated conventional dairy manufacturers to diversify by adding more product lines, like lactose-free and fortified dairy products, empire-structuring with health-conscious consumers. Increased knowledge of health and wellness issues has also intensified the demand for organic and sustainably grown dairy products, which has changed the focus on animal care and the environment in the industry.

The UK Dairy Market has great opportunities due to the explosion in online sales that became popular during the pandemic. This enables dairy companies to market broaden their brand awareness and sales for rising consumer demands. In addition, using technology along with product traceability and transparency aids in creating customer trust as well as loyalty. The shift towards premiumisation in dairy consumption is also quite overt, with many consumers indulging more for high-quality, local, or handcrafted products. The market has been experiencing a trend of public health initiatives set by the UK government towards dealing with obesity issues by reducing sugar and fat content in dairy products. 

Furthermore, food trends embracing globalization have impacted UK consumers by increasing the acceptance of dairy products with different flavors internationally. The evolution of the UK Dairy Market is evident in their consumer preference, focusing on health and sustainability alongside technological advancements.

UK Dairy Market Drivers

Growing Demand for Dairy Products

The UK Dairy Market Industry is witnessing an increasing demand for dairy products, driven primarily by population growth and changing consumer preferences. As the UK population continues to expand, expected to reach approximately 69 million by 2030 according to data from the Office for National Statistics, the consumers are not only looking for basic dairy products but also for more specialized items like lactose-free and fortified dairy products.

This growing population along with an increase in health-conscious consumers seeking nutritious options points towards a higher demand for dairy goods. Leading organizations, such as the Dairy UK, indicate that the dairy sector remains a crucial part of the UK food landscape, accounting for about 15% of the total agricultural output. With the shift towards healthier lifestyles, research shows that consumption of dairy products is expected to increase significantly, creating a potential boost for the UK Dairy Market Industry moving forward.

Sustainable Farming Practices

Sustainability continues to be a key driver in the UK Dairy Market Industry, with a growing emphasis on environmentally friendly practices among dairy producers. As consumers become more environmentally conscious, brands that adopt sustainable farming methods are likely to see an increase in sales. Recent reports indicate that approximately 60% of UK consumers prefer purchasing dairy products from environmentally responsible sources. Organizations such as the National Farmers' Union have initiated campaigns to promote sustainable dairy farming practices.

This increased consumer awareness not only boosts the demand for sustainably sourced dairy products but also opens opportunities for innovation in the market, contributing to long-term growth in the UK Dairy Market Industry.

Expansion of Retail Channels

The UK Dairy Market Industry is benefitting significantly from the expansion of retail channels and the availability of dairy products through diverse platforms. Growth in e-commerce is transforming the way consumers purchase dairy products, with online grocery sales projected to reach around 20% of the total grocery market by 2025, according to research from the British Retail Consortium. Supermarkets and grocery stores are increasing their dairy product offerings to meet rising consumer demand.

This expansion of retail channels is essential in making dairy products more accessible to a broader audience across the UK, positively impacting sales and contributing to the growth of the UK Dairy Market Industry.

Health Benefits of Dairy Consumption

Growing awareness regarding the health benefits associated with dairy consumption is fueling positive growth in the UK Dairy Market Industry. Dairy products, known for their high calcium, protein, and vitamin content, are increasingly being linked to improved health outcomes. For instance, data from Public Health England indicates that adequate dairy consumption is instrumental in preventing deficiencies in essential nutrients, particularly in the young population that has growing dietary needs.

Furthermore, campaigns promoting the health benefits of dairy products, led by the Dairy Council, ensure that consumers are informed about the role of dairy in a balanced diet. This rising consciousness around health and nutrition elevates the importance of dairy in the UK market, further driving its growth.

UK Dairy Market Segment Insights

Dairy Market Product Type Insights

The UK Dairy Market is a vital sector within the food industry, exhibiting significant diversity through various Product Types such as Milk, Cheese, Butter, Yogurt, Dairy Cream, Ice Cream, and others. Milk remains a cornerstone of this market, widely recognized as a nutritional staple and a key ingredient in several dietary routines across the UK, influencing consumer preferences and shopping habits. Cheese is notably significant, encompassing a broad array of varieties that cater to different culinary uses, and playing an essential role in the culture of the UK food scene, from retail to food service. Butter, known for its rich flavor and functionality in cooking and baking, maintains a strong presence as consumers increasingly seek quality over quantity, promoting locally sourced products that enhance domestic agricultural practices.

Yogurt has gained momentum as a health-oriented choice, largely due to rising awareness around wellness and dietary management, driven by demands for probiotic-rich options and low-fat alternatives that appeal to a health-conscious demographic. Dairy Cream sees consistent growth, utilized in both cooking and dessert preparation, underlining its versatility and popularity amongst consumers seeking indulgence. Ice Cream, loved for its variety, brings a seasonal influence, spurred by changing weather patterns and festivities, making it a compelling category throughout the year. The 'Others' category encapsulates niche dairy products that cater to emerging tastes and preferences, further illustrating the market's adaptability and innovation.

The growth of plant-based alternatives and increased consumer awareness regarding food provenance challenge the traditional dairy segment, compelling it to adapt and innovate while enhancing sustainability practices. On the other hand, the UK's robust dairy farming sector provides significant opportunities through local sourcing, fostering a sense of community and supporting economic stability. Overall, the UK Dairy Market segmentation showcases a dynamic interplay of consumer preferences and industry responses, reinforcing dairy's integral role within the broader food landscape. These market trends echo the evolution of dietary habits and highlight the ongoing import of dairy in the UK diet, supported by various health campaigns and government initiatives aimed at promoting dairy consumption while balancing trade dynamics and consumer needs.

Dairy Market Category Insights

The UK Dairy Market has demonstrated considerable growth, contributing significantly to the country's economy, with a strong focus on different categories. Among these, Organic and Conventional dairy products play pivotal roles, with the Organic segment gaining momentum due to increasing consumer awareness regarding health and environmental issues. This category often possesses higher price points but represents a high-margin opportunity for producers and retailers, appealing to ethically conscious consumers. On the other hand, the Conventional category maintains a strong market presence, largely favored for its affordability and accessibility, catering to a broader demographic.

This dynamic presents unique opportunities and challenges, as the demand for organic products propels innovation in farming practices while Conventional dairy producers strive to enhance sustainability measures. The contrast between the two segments underscores the diverse preferences within the UK Dairy Market, driving strategic decisions and influencing market growth. Additionally, as both segments continue to evolve, they reveal valuable insights into changing consumer behaviors and preferences, making them integral components of the overall UK Dairy Market segmentation.

Dairy Market Distribution Channel Insights

The Distribution Channel segment of the UK Dairy Market plays a crucial role in delivering products to consumers, with significant emphasis on both Store-Based and Non-Store-Based channels. Store-Based distribution includes supermarkets, hypermarkets, and convenience stores, which continuously evolve to cater to changing consumer preferences and shopping behaviors. This channel remains highly influential, driven by the convenience it offers and the ability for consumers to physically inspect products. Meanwhile, Non-Store-Based distributions, such as online platforms and direct-to-consumer sales, are gaining momentum, significantly reshaped by the accelerated shift towards e-commerce.

The rise in digital shopping trends fosters opportunities for dairy producers to reach a broader audience and innovate their sales approaches. The UK Dairy Market's segmentation reveals a competitive landscape where both channels complement each other, with store-based options dominating but non-store avenues increasingly contributing to overall growth. The combination of these channels ensures that the UK dairy products are accessible to a wide range of consumers, reflecting the evolving nature of purchasing habits. Market data indicates a strong preference for convenience-oriented shopping experiences, prompting dairy companies to enhance their logistics and distribution strategies, thereby improving overall market penetration.

Dairy Market Store-Based Insights

The Store-Based segment of the UK Dairy Market is a critical component, reflecting consumer preferences for convenient access to dairy products. Supermarkets and hypermarkets play a crucial role in this landscape as they provide a vast range of dairy products under one roof, catering to the diverse needs of UK consumers. This segment has seen a robust performance owing to the shift in buying patterns, where consumers increasingly prefer one-stop shopping experiences. Convenience stores are also vital as they offer swift access to dairy products, particularly in urban areas, ensuring that essential products are within easy reach for busy lifestyles.

This segment's ability to adapt to consumer demands and trends influences the overall dynamics of the UK Dairy Market significantly. Moreover, other retail formats continue to grow, focusing on niche markets and unique product offerings to attract specific consumer groups. The Store-Based segment thus acts as an essential driver for market growth, helping to shape overall consumer behavior and preferences within the UK Dairy Market.

UK Dairy Market Key Players and Competitive Insights

The UK Dairy Market is characterized by a diverse range of products and strong competition among various players. With a rich agricultural history, the market has evolved to incorporate varying consumer preferences, leading to the emergence of new segments such as organic, lactose-free, and specialty dairy products. The competitive landscape is dynamic, driven by innovations in product development and branding strategies. Additionally, sustainability and ethical sourcing have become significant factors influencing consumer choices. Companies in the UK Dairy Market are navigating these trends, striving to differentiate themselves through quality and unique offerings while maintaining competitive pricing. The competitive insights indicate that firms must continuously adapt to market changes and consumer demands to maintain their position.

Yeo Valley stands out within the UK Dairy Market as a pioneer of organic dairy products. With a commitment to high-quality and sustainably sourced ingredients, Yeo Valley has effectively captured a niche audience that values health and environmental sustainability. The brand's emphasis on organic farming practices and transparent sourcing strategies resonates with consumers seeking healthier alternatives. The strength of Yeo Valley lies in its strong brand recognition and loyalty among customers who appreciate the authenticity and sustainability of its products. The company has embraced innovation in its product lines, introducing a variety of yogurt, milk, and cream options that cater to evolving consumer tastes. This approach not only strengthens its market presence but also sets it apart in a competitive arena that increasingly prioritizes health-conscious offerings.

UK Dairy Marketing operates as a significant force within the UK Dairy Market, providing a comprehensive range of dairy products that cater to various consumer segments. The company has established a robust market presence through its focus on quality and competitive pricing. Its key offerings include liquid milk, cheese, yogurt, and butter, ensuring it meets diverse consumer needs. UK Dairy Marketing has leveraged strategic partnerships and collaborations to enhance its distribution capabilities, thus penetrating different retail channels effectively. The company's ability to respond to market demands through product innovation and continuous improvement solidifies its position among key competitors. Furthermore, UK Dairy Marketing has engaged in targeted mergers and acquisitions that allow it to expand its product portfolio and enhance its market share, thereby reinforcing its competitive stance in the UK dairy sector.

Key Companies in the UK Dairy Market Include:

• Yeo Valley


• UK Dairy marketing


• Somersetbased Quicke's Cheese


• Bennett's Dairy


• First Milk


• Dairy Crest


• Danone


• Rachel's Organic


• Kraft Heinz


• Arla Foods


• Fonterra


• The Cheese Company


• Glasgowbased McLelland Cheese


• Nestlé UK

UK Dairy Market Industry Developments

The UK Dairy Market has seen several significant developments recently. For instance, in September 2023, First Milk announced a partnership with Fonterra to enhance its dairy product offerings, which aims to leverage both companies' strengths in sustainability and innovation. In August 2023, Danone revealed plans to invest in modernizing their facilities, enhancing their production capabilities across their UK units. Additionally, Yeo Valley reported an increase in demand for their organic dairy products, reflecting wider consumer trends towards sustainability and health-conscious choices.

Bennett's Dairy and Rachel's Organic have also experienced growth, with expansions in their product lines due to increasing consumer interest in ethical and organic dairy options. Furthermore, in October 2022, Dairy Crest facilitated a strategic acquisition of a smaller cheese producer, aimed at strengthening its market position. The overall valuation of the UK Dairy Market has improved, driven by rising consumer preferences for local, high-quality dairy products. Meanwhile, the impact of global supply chain disruptions continues to challenge several players, including Kraft Heinz and Arla Foods, as they navigate fluctuating costs and supply.

Dairy Market Segmentation Insights

Dairy Market Product Type Outlook

• Milk


• Cheese


• Butter


• Yogurt


• Dairy Cream


• Ice Cream


• Others

Dairy Market Category Outlook

• Organic


• Conventional

Dairy Market Distribution Channel Outlook

• Store-Based


• Non-Store-Based

Dairy Market Store-Based Outlook

• Supermarkets Hypermarkets


• Convenience Stores


• Others

 

Report Attribute/Metric	Details
Market Size 2023	29.98(USD Billion)
Market Size 2024	31.02(USD Billion)
Market Size 2035	42.0(USD Billion)
Compound Annual Growth Rate (CAGR)	2.793% (2025 - 2035)
Report Coverage	Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Base Year	2024
Market Forecast Period	2025 - 2035
Historical Data	2019 - 2024
Market Forecast Units	USD Billion
Key Companies Profiled	Yeo Valley, UK Dairy marketing, Somersetbased Quicke's Cheese, Bennett's Dairy, First Milk, Dairy Crest, Danone, Rachel's Organic, Kraft Heinz, Arla Foods, Fonterra, The Cheese Company, Glasgowbased McLelland Cheese, Nestlé UK
Segments Covered	Product Type, Category, Distribution Channel, Store-Based
Key Market Opportunities	Plant-based dairy alternatives growth, Organic dairy product demand, Innovative packaging solutions, Health and wellness trends, Sustainable farming practices integration
Key Market Dynamics	sustainability-driven consumer demand , competitive pricing pressures , health-conscious product trends , government regulations and support , dairy alternatives market growth
Countries Covered	UK