Fermented Milk Market Synopsis

Fermented Milk Market Size Was Valued at USD 53.38 Billion in 2023 and is Projected to Reach USD 111.62 Billion by 2032, Growing at a CAGR of 8.54% From 2024-2032.

Fermented milk is a dairy product that has undergone the process of fermentation, where beneficial bacteria, convert lactose into lactic acid. This process gives a tangy flavour and changes the texture of fermented milk. Its products are known for their potential health benefits, including improved digestion and a good source of probiotics.

• Different dairy products such as yogurt, buttermilk, and sour cream are made using fermented milk which is mostly consumed because of their distinct tastes, smooth consistencies, and probiotic qualities. These items can offer a dietary option for individuals who are intolerant to lactose.
• Fermented dairy products have live bacteria that can positively impact the health of the gut. The fermentation process produces lactase enzyme which aids in the breakdown of lactose, making fermented dairy products more easily digestible.
• The fermentation process can improve the availability of nutrients like calcium, protein, vitamins (such as B vitamins), and minerals. The fermentation process can increase the absorption of these nutrients in the body.
• There is a deep cultural importance associated with fermented milk products in numerous regions around the world which play a crucial role in classic culinary practices, representing ancestry. Yogurt and sour cream can be added to dressings, dips, sauces, marinades, baked goods, and smoothies to improve both taste and consistency.

• The fermentation products market was valued at about 149.5 billion U.S. dollars in 2016 and is to be worth over 205.5 billion U.S. dollars in 2023.

Top Players Involved Are:

"Danone (France), Nestle (Switzerland), Yakult Honsha Co., Ltd. (Japan), Lactalis (France), General Mills (United States), Chobani (United States), Muller Group (United Kingdom), Yoplait (France), Arla Foods (Denmark), Kraft Heinz (United States), FrieslandCampina (Netherlands), Parmalat (Italy), Fonterra Co-operative Group (New Zealand), Mother Dairy (India), Meiji Co., Ltd. (Japan), Clover Industries Limited (South Africa), Grupo Lala (Mexico), Rainbow Dairy Foods (South Africa), Laïta (France), Agrosuper (Chile), Dairy Farmers of America (United States), Müller-Milch (Germany), Meggle (Germany), Emmi AG (Switzerland), Agri-Mark, Inc. (United States) and Other Active Players."

Fermented Milk Market Trend Analysis

Increased Awareness About Health Benefits of Fermented Milk

• Fermented milk products are rich in probiotics that provide numerous health benefits. These beneficial probiotics support gut health, aid in digestion, and boost the immune system. As people become more health-conscious, the demand for these probiotic-rich fermented milk products has increased.
• Digestive disorders and issues are becoming more common. Fermented milk products are known to improve digestion and alleviate symptoms associated with these conditions. Fermented milk products made from non-dairy sources, like soy, almond, or coconut milk, offer suitable alternatives without compromising on taste or health benefits.
• The fermentation process can increase the bioavailability of nutrients such as vitamins, minerals, and proteins, making them easier to absorb and utilize by the body. The probiotic properties, digestive health improvements, nutritional value, and alignment with healthy lifestyle trends.
• There is an increased demand for authentic fermented milk products that reflect cultural heritage which contributes to the market growth and diversification of product offerings.

Opportunity

Innovative Products and Packaging Options

• Consumers are increasingly searching for food choices that are both healthy and convenient to match their busy lifestyles. Advancements in packaging such as individual-sized, easy-to-carry sachets or containers, enable convenient consumption. This convenience helps people easily include fermented milk products in their daily schedule.
• Consumers are always seeking out distinctive and attractive flavours and texture choices in their food items which tend to introduce new fruity or herbal flavours, and innovative textures such as Greek-style yogurt to satisfy those needs.
• Advancements in packaging, like biodegradable materials, containers that can be recycled, and reusable packaging can offer environmentally friendly choices for consumers.
• Developing new products and formulations with innovation can lead to the creation of hybrid products allowing for growth in the functional food industry. Adding superfoods such as chia seeds or goji berries to fermented milk products like yogurt or smoothies enhances their nutritional value and follows the current wellness trends.

Challenge

Rising Awareness of Vegan Products

• As awareness grows about the environmental effects of animal farming, people may choose plant-based options for ethical and sustainability concerns which poses a challenge for the fermented milk industry. A growing understanding of animal welfare concerns could lead customers to search for substitutes for products sourced from animals.
• Certain individuals opt for plant-based diets due to health concerns, believing they are more advantageous compared to dairy products. Although fermented dairy products offer various health advantages, such as probiotics and crucial nutrients. This choice can influence the demand for conventional fermented dairy products.
• To stay competitive and face the challenge of increasing awareness of vegan products, the fermented milk market may consider expanding its product range with more plant-based options.
• non-dairy fermented products like soy milk yogurt, almond milk yogurt, and coconut milk kefir should be introduced in the market to capture vegan consumer base. These options can offer comparable probiotic advantages to conventional fermented dairy products, but without the inclusion of animal-based elements.

Fermented Milk Market Segment Analysis:

The fermented milk market is segmented on the basis of Type, Form, Application, End-users, and Distribution Channel.  

By Application, Direct Consumption Segment Is Expected to Dominate the Market During the Forecast Period

There are four segments by application such as cooking, direct consumption, dairy-based desserts, and probiotic supplements. Among these, the direct consumption segment is expected to dominate the market during the forecast period.

• Direct consumption involves consuming fermented milk products either on their own or as part of a snack or meal which excels by providing consumers with both convenience and versatility.
• Fermented dairy products such as yogurt, lassi, and buttermilk can be eaten as is, without the requirement of further cooking or preparation. This makes them a convenient and fast choice for people with busy schedules. These products can be blended into smoothies, or added to different dishes.
• Yogurt’s preference and familiarity with the culture as a snack or nutritious diet help to establish the direct consumption segment as the dominant force. Many cultures have a long-standing tradition of consuming fermented milk products directly.
• Fermented dairy products offer a unique tangy taste and smooth consistency. These products when combined with fruits, honey, or other additions produce a pleasant taste and texture.

By Distribution Channel, Retail Stores Segment Held the Largest Share In 2023

There are four segments by distribution channel such as retail stores, online platforms, food service providers, and local markets. Among these, retail stores segment held the largest share in 2023.

• Retail stores offer consumers easy access to a diverse range of fermented dairy products which provides an option to conveniently go to nearby grocery stores to buy their preferred brands or experiment with different ones. Retail stores can reach and expose a wide range of consumers on a larger scale.
• The fermented milk products availability in retail stores increases their exposure to consumers who may not specifically look for them. This results in an increased likelihood of finding new products and experimenting with them helping to the dominance of retail stores.
• The retail stores guarantee steady availability and quality of products. The well-established and effective supply chain network can help to increase the fermented milk market.
• Retail stores use a variety of marketing strategies such as in-store displays, product demonstrations, and discounts to draw in customers. These actions are especially successful in increasing consumer knowledge and trying out products.

Fermented Milk Market Regional Insights:

Asia Pacific is Expected to Dominate the Market Over the Forecast Period

• Asia Pacific has the highest population in the world who seek convenient and nutritious food choices, such as fermented milk products. Yogurt is a commonly consumed food in nations such as India, Japan, and South Korea contributing to the market's strong presence in the area.
• The increasing awareness and changing consumers preferences towards health and wellness led to an increase in the healthy food market. Fermented dairy products are known for their probiotic attributes, support digestive health, and offer numerous nutrients which makes them an ideal choice for those focused-on wellness trends.
• The retail and e-commerce infrastructure in the Asia Pacific region made fermented milk and its products easily available and accessible. Also, the rise in the urbanization, disposable income contributes to the dominance of market in this region.

Fermented Milk Market Active Players

• Danone (France)
• Nestle (Switzerland)
• Yakult Honsha Co., Ltd. (Japan)
• Lactalis (France)
• General Mills (United States)
• Chobani (United States)
• Muller Group (United Kingdom)
• Yoplait (France)
• Arla Foods (Denmark)
• Kraft Heinz (United States)
• FrieslandCampina (Netherlands)
• Parmalat (Italy)
• Fonterra Co-operative Group (New Zealand)
• Mother Dairy (India)
• Meiji Co., Ltd. (Japan)
• Clover Industries Limited (South Africa)
• Grupo Lala (Mexico)
• Rainbow Dairy Foods (South Africa)
• Laïta (France)
• Agrosuper (Chile)
• Dairy Farmers of America (United States)
• Müller-Milch (Germany)
• Meggle (Germany)
• Emmi AG (Switzerland)
• Agri-Mark, Inc. (United States) and Other Active Player

Key Industry Developments in the Fermented Milk Market:

• In February 2024, Nestlé launched first fermentation dairy protein powder, an animal-free and lactose-free whey isolate product under the Orgain brand. The product includes a precision fermented whey ingredient that is bio-identical to whey protein, it is lactose-free and easier to digest.
• In June 2023, Häagen-Dazs’ a dairy-based brand launched a new Cultured Crème made with fresh milk and cream, and real fruit which uses a fermentation process that is up to five times longer than traditional yogurt to create a thick, creamy ice cream-like texture. It includes vanilla bean, blueberry, and black cherry flavours.