United Kingdom Dairy Market Report | Market Size, Industry Analysis, Growth Opportunities, & Forecast (2025-2030)

United Kingdom Dairy Market – Overview

The United Kingdom Dairy Market continues to evolve, driven by changing consumer preferences, sustainability concerns, and innovation within the dairy sector. With a diverse product range spanning traditional dairy items like milk, cheese, yogurt, and butter, the UK market is witnessing significant shifts due to the rising demand for plant-based and lactose-free alternatives. Health-conscious consumers are increasingly seeking dairy products with enhanced nutritional benefits, such as probiotics and high-protein options. Additionally, the growing trend of environmental sustainability is influencing packaging choices and farming practices, with brands prioritizing recyclable and eco-friendly solutions.

Key market players, including Arla Foods, Müller UK, and Nestlé UK, are focusing on product innovation, strategic partnerships, and expanding their presence in the growing alternative dairy segment. Retailers and distributors are adapting to these changes by diversifying their product offerings, with online platforms gaining importance in the dairy distribution landscape.

This report offers an in-depth analysis of market trends, growth drivers, challenges, and emerging opportunities, providing valuable insights for stakeholders in the UK dairy sector.

Market Report Coverage:

The “United Kingdom Dairy Market Report—Future (2025-2030)” by Digiroads Research & Consulting covers an in-depth analysis of the following segments in the market.

Study Assumptions and Definitions

This study on the United Kingdom Dairy Market is based on several key assumptions that guide its scope and analysis. It assumes that the market will continue to be influenced by the growing trend toward health-conscious eating habits, with an increasing preference for dairy alternatives such as plant-based milk and lactose-free products. Furthermore, the study assumes that the UK’s dairy consumption patterns will continue to evolve, driven by demographic factors, lifestyle changes, and environmental concerns.

Definitions of key market categories are as follows:

• Dairy Products: Includes milk, cheese, yogurt, butter, margarine, and other dairy-based products, both conventional and organic.
• Plant-Based Dairy: Dairy alternatives made from plant sources such as soy, almond, oat, and coconut.
• Functional Dairy: Products with added health benefits, such as probiotics, high-protein, or fortified with vitamins and minerals.
• Lactose-Free Dairy: Products specifically designed for individuals with lactose intolerance, offering an alternative to traditional dairy.

The study also assumes that the regulatory framework within the UK will continue to support sustainability in dairy farming, with increasing emphasis on carbon reduction, eco-friendly packaging, and animal welfare standards. The data used in this study reflects the most recent trends and market activities up until the year 2024.

Market Scope

The scope of the United Kingdom Dairy Market is broad, encompassing a wide range of dairy products, from traditional milk and cheese to innovative dairy alternatives and functional products. The market is analyzed in terms of both production and consumption patterns, with a focus on consumer preferences, pricing trends, and key drivers such as health, sustainability, and convenience.

This report also delves into the impact of significant industry shifts, such as the rise of plant-based and lactose-free alternatives, the growth of online retail channels, and changes in dairy farming practices in response to environmental and regulatory pressures. The analysis covers key market segments, including milk, cheese, yogurt, butter, margarine, and plant-based dairy, providing insights into their respective growth trajectories and challenges. The report also includes a look at consumer demographics, emerging trends, and forecasts for future market developments.

MARKET OUTLOOK

Executive Summary

The United Kingdom Dairy Market is undergoing significant transformation, driven by changing consumer preferences, increased demand for plant-based alternatives, and heightened sustainability concerns. The market, which includes a wide range of dairy products such as milk, cheese, yogurt, butter, margarine, and emerging dairy alternatives, is expected to witness continued growth and diversification over the next several years.

In 2024, traditional dairy products still dominate the market, but plant-based dairy products, including oat, soy, almond, and coconut-based alternatives, are showing robust growth. This shift is being driven by health-conscious consumers, ethical concerns about animal welfare, and the growing prevalence of lactose intolerance. The market is also seeing a rise in functional dairy products, which are fortified with additional health benefits such as probiotics, protein, and vitamins, catering to the wellness trend.

Sustainability remains a top priority for both producers and consumers. Key players in the market are increasingly adopting eco-friendly packaging, reducing carbon footprints, and investing in sustainable farming practices. Moreover, with the advent of e-commerce, online sales of dairy and dairy alternatives have seen significant growth, especially in urban areas, providing a new avenue for consumer engagement.

This report provides an in-depth analysis of market dynamics, key trends, opportunities, and challenges shaping the UK dairy sector. It covers major players, market segmentation, competitive landscapes, and forecasts for growth. The findings are aimed at helping stakeholders—from manufacturers and distributors to investors and policymakers—make informed decisions that align with evolving market demands and sustainability goals.

COMPETITIVE LANDSCAPE

The UK dairy market is competitive, with major players focusing on innovation, sustainability, and plant-based alternatives to meet evolving consumer demands.

Key Market Players

• Arla Foods
• Müller UK & Ireland
• Nestlé UK
• Danone UK
• Yeo Valley Organic
• FrieslandCampina
• The Dairy Group
• Marks & Spencer (M&S)
• Waitrose
• Sainsbury’s

Market Share Analysis

The UK dairy market is highly competitive, with several key players holding significant market shares. Arla Foods UK, the largest supplier of fresh milk and cream, processes over 2.2 billion liters of milk annually and dominates the market with premium brands like Cravendale and Lactofree. Müller UK & Ireland, with a turnover of £2.3 billion in 2022, is another major player, particularly strong in milk and yogurt products. Recently, Müller secured a deal as the sole supplier of milk to Sainsbury’s, further strengthening its market presence. Saputo Dairy UK, known for its Cathedral City brand, reported a turnover of £626.8 million in 2023 and has expanded into plant-based products to meet the growing demand for dairy alternatives. Other significant players like Ornua and Danone UK also contribute to the competitive dynamics in the market. Together, these companies shape a dynamic and evolving dairy sector in the UK, where traditional and alternative dairy products continue to grow in parallel, driven by shifting consumer preferences.

MARKET DYNAMICS

Market Drivers and Key Innovations

The UK dairy market is driven by several key factors. Health consciousness is one of the primary drivers, with consumers increasingly seeking dairy products that offer additional nutritional benefits, such as probiotics and high-protein options. The rise in lactose intolerance and veganism has also led to a surge in demand for plant-based and lactose-free dairy alternatives. Sustainability concerns are another significant driver, as both consumers and producers are prioritizing eco-friendly packaging and sustainable farming practices to reduce environmental impact. The convenience factor is also playing a role, with more consumers opting for ready-to-consume dairy products like on-the-go yogurts and snack-sized servings.

In terms of innovations, plant-based alternatives have seen significant growth, with companies like Saputo launching dairy-free versions of their popular products, such as Cathedral City. Technological advancements in farming and production are enhancing efficiency and product quality. Automation, precision farming, and AI-driven logistics are streamlining operations, reducing waste, and improving the sustainability of dairy production. Additionally, dairy producers are diversifying their product portfolios to include flavored milk, plant-based cheeses, and fortified dairy products, responding to evolving consumer preferences for variety and health-conscious choices. These innovations are shaping the future of the UK dairy market, aligning with the broader consumer trends towards health, sustainability, and convenience.

Market Challenges

1. Rising Production Costs: The cost of raw materials, particularly feed and energy, continues to rise, affecting overall production costs in the dairy industry.
2. Environmental and Sustainability Pressures: Increasing demands for sustainable practices, including reduced carbon emissions and eco-friendly packaging, pose challenges for traditional dairy farming.
3. Changing Consumer Preferences: The shift towards plant-based diets and dairy alternatives poses a challenge for traditional dairy products to maintain market share.
4. Lactose Intolerance and Veganism Trends: The growing awareness of lactose intolerance and veganism has led to a decline in demand for regular dairy products, pushing the market towards alternatives.
5. Supply Chain Disruptions: Ongoing disruptions in the global supply chain, particularly in transportation and logistics, have caused delays and increased costs for dairy producers.
6. Regulatory Compliance and Animal Welfare: Stringent regulations regarding animal welfare and the use of antibiotics in dairy production increase operational costs and may impact the market.
7. Intense Competition from Non-Dairy Alternatives: Non-dairy alternatives, such as oat milk, almond milk, and other plant-based products, have rapidly gained popularity and create significant competition for traditional dairy.

Market Opportunities

1. Growth of Plant-Based Dairy Alternatives: The increasing demand for vegan and lactose-free products presents an opportunity for dairy brands to expand their portfolios into plant-based options.
2. Health and Wellness Trends: Products enriched with probiotics, protein, and other functional ingredients can cater to health-conscious consumers seeking nutritional benefits from their dairy.
3. Sustainable Farming and Eco-Friendly Packaging: Emphasizing sustainability through innovations like carbon-neutral farming practices and recyclable packaging offers opportunities for brand differentiation.
4. E-commerce and Direct-to-Consumer Sales: The growing popularity of online shopping provides an opportunity to reach more customers through direct-to-consumer platforms, reducing dependency on traditional retail channels.
5. Premium and Organic Dairy Products: There is an increasing willingness among consumers to pay a premium for organic and high-quality dairy products, creating opportunities in the organic and artisanal dairy segments.
6. Innovative Dairy Product Offerings: Innovation in flavors, textures, and formulations of dairy products, such as probiotic-infused yogurts or fortified milks, can tap into emerging consumer preferences.
7. Export Growth for Dairy Alternatives: The global demand for plant-based dairy alternatives provides an opportunity for UK dairy companies to export these products to international markets.
8. Strategic Partnerships and Acquisitions: Forming strategic alliances or acquiring plant-based or functional dairy companies can help traditional dairy producers diversify and tap into growing trends.

RECENT STRATEGIES & DEVELOPMENTS IN THE MARKET

1. Strategic Acquisitions in Plant-Based Segment: The growing demand for plant-based dairy alternatives has led traditional dairy companies to diversify their portfolios. A significant move was made in October 2024 when Finnish dairy giant Oddlygood acquired UK-based plant-based milk brand Rude Health. This acquisition, valued at £23.8 million, reflects the growing shift in consumer preferences towards non-dairy options. Rude Health’s strong brand presence, particularly its oat milk, is expected to provide Oddlygood with a solid foothold in the UK market, a region where plant-based dairy sales have increased by 15% year-on-year. This strategic acquisition is part of a broader trend where dairy companies seek to align with evolving consumer trends towards health-conscious and environmentally friendly alternatives.
2. Addressing Labour Shortages in Dairy Farming: The UK dairy sector is facing significant labour shortages, with many farms reducing production due to a lack of workers. Arla Foods UK, the largest dairy producer in the country, has highlighted that one in twelve dairy farms have scaled back their output. The shortage of labour is primarily due to reduced immigration post-Brexit and a lack of domestic interest in farming roles. In response, Arla has launched initiatives aimed at promoting careers in food and farming, including partnerships with job centers and vocational training programs. Furthermore, the company is pushing for reforms in the apprenticeship levy to increase funding for training young people in agricultural careers. These strategies are intended to attract new talent into the sector and ensure sustainable milk production for the future. This move aligns with Arla’s broader goal to secure long-term milk supply while addressing industry-wide labour concerns.
3. Biosecurity Measures Amid Foot-and-Mouth Disease Concerns: The UK government has recently introduced stricter biosecurity measures in light of growing concerns over foot-and-mouth disease, a highly contagious viral infection that affects cloven-hoofed animals, including cows. These measures include a ban on the importation of meat and dairy products from the EU, which has prompted significant disruptions in both domestic and international supply chains. The restrictions, which apply to products like cheese, sandwiches, cured meats, raw meats, and milk, aim to prevent the spread of the disease. These measures have sparked debate in the industry, with some producers expressing concerns over the long-term impact on supply chains. However, stakeholders agree that maintaining biosecurity is critical for safeguarding livestock health and preventing market disruptions. This development highlights the challenges that the dairy sector faces in balancing market access with the need for strict disease control.
4. Trade Relations with the EU and Post-Brexit Challenges: Since Brexit, UK dairy producers have faced significant challenges in maintaining trade relations with the EU. New import-export regulations and customs checks have led to delays, increased costs, and complexities in the movement of dairy products across borders. In response, major UK food producers and retailers, including Marks & Spencer, Sainsbury’s, and Asda, have called for the EU to ease post-Brexit food and drink checks. They estimate that the new regulations have added an additional £2 billion in costs and significant delays in shipments. Efforts to address these challenges include calls for more streamlined processes for dairy products, such as reducing paperwork and easing inspection requirements. These changes are expected to reduce the cost of trade and simplify logistics, ultimately benefiting both producers and consumers. Moreover, these efforts are critical for ensuring that UK dairy products remain competitive in the European market.
5. Adoption of Technological Advancements in Dairy Production: The UK dairy sector is also embracing innovation and technology to improve efficiency and sustainability. Precision farming, automated milking systems, and AI-driven supply chain management are increasingly being adopted by large producers like Arla Foods. These technologies help increase production efficiency, reduce waste, and improve the overall quality of dairy products. For example, automated milking systems help reduce labour costs and ensure that cows are milked at optimal times, improving both milk yield and animal welfare. Similarly, AI technologies are being used to predict supply chain disruptions, optimize delivery routes, and forecast demand more accurately. These advancements are helping dairy producers meet the growing demand for fresh, high-quality products while addressing environmental concerns and increasing operational efficiency.

KEY BENEFITS FOR STAKEHOLDERS

1. Improved Access to New Markets: Strategic acquisitions, such as Oddlygood’s purchase of Rude Health, provide stakeholders in the dairy sector with access to expanding markets for plant-based dairy alternatives. This diversification allows companies to capture a broader customer base, especially as demand for non-dairy products continues to rise, providing growth opportunities in both the UK and international markets.
2. Enhanced Supply Chain Stability: By addressing labour shortages and promoting career development in farming, Arla Foods UK and other major dairy producers are ensuring a more stable and skilled workforce, which is critical for maintaining consistent milk production. This is beneficial for all stakeholders, from farmers to consumers, ensuring long-term sustainability and reducing disruptions in supply.
3. Stronger Biosecurity and Disease Prevention: The implementation of strict biosecurity measures, such as the ban on importing meat and dairy products from the EU, ensures that the UK dairy sector remains protected from the spread of infectious diseases like foot-and-mouth. For stakeholders in the dairy supply chain, this provides confidence in the safety and quality of the product, helping maintain consumer trust and the overall health of the sector.
4. Cost Reduction through Trade Facilitation: Efforts to ease post-Brexit trade barriers, particularly reducing red tape and simplifying customs checks, benefit stakeholders by lowering operational costs and improving the efficiency of dairy exports. These changes not only help dairy producers in the UK maintain their competitiveness in the European market but also create more opportunities for growth in international markets.
5. Sustainability and Technological Advancements: The integration of advanced technologies in dairy production, including precision farming and automated milking systems, helps reduce waste, increase productivity, and lower environmental impact. For stakeholders, this means greater operational efficiency, reduced costs, and alignment with sustainability goals, which are increasingly important to both consumers and regulatory bodies. Furthermore, these innovations can enhance product quality, ensuring consumer satisfaction and long-term loyalty.

At DigiRoads Research, we emphasize reliability by employing robust market estimation and data validation methodologies. Our insights are further enhanced by our proprietary data forecasting model, which projects market growth trends up to 2030. This forward-thinking approach ensures our analysis not only captures the current market landscape but also anticipates future developments, equipping stakeholders with actionable foresight.

We go a step further by offering an exhaustive set of regional and country-level data points, supplemented by over 60 detailed charts at no additional cost. This commitment to transparency and accessibility allows stakeholders to gain a deep understanding of the industry’s structural and operational dynamics. By providing exclusive and hard-to-access data, DigiRoads Research empowers businesses to make informed strategic decisions with confidence.

In essence, our methodology and data delivery foster a collaborative and data-driven decision-making environment, enabling businesses to navigate industry challenges and capitalize on opportunities effectively.

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Table of Contents

• INTRODUCTION

  • Market Overview
  • Years Considered for Study
  • Market Segmentation
  • Study Assumptions and Definitions
  • Market Scope

• RESEARCH METHODOLOGY

• MARKET OUTLOOK

  • Executive Summary
  • Market Snapshot
• Market Segments 

• By Milk :
  • Includes fresh, UHT, and flavoured milk varieties.

• By Organic Dairy :
  • Dairy products produced through organic farming methods.

• COMPETITIVE LANDSCAPE

• Recent Strategies (Key Strategic Moves)
• Market Share Analysis
• Company Profiles
  • Arla Foods UK
  • Müller UK & Ireland
  • Saputo Dairy UK
  • Danone UK
  • Ornua
  • Yeo Valley
  • British Dairy Company
  • The Cheese Company
  • Grahams Family Dairy
  • First Milk

• MARKET DYNAMICS

  • Market Drivers
  • Market Challenges
  • Market Opportunities
  • Porter’s Five Forces’ Analysis
    • Bargaining Power of Suppliers
    • Bargaining Power of Buyers
    • Threat of New Entrant
    • Threat of Substitutes
    • Competitive Rivalry

• GLOSSARY OF PROMINENT SECONDARY SOURCES

• DISCLAIMER

• ABOUT US