Milk and Butter Market Size, Share & Report [2033]

Milk and Butter Market Overview

The Milk and Butter Market size was valued at USD 229842 million in 2024 and is expected to reach USD 315069.4 million by 2033, growing at a CAGR of 3.5% from 2025 to 2033.

The milk and butter market is a cornerstone of the global dairy industry, serving billions of consumers and supporting food processing sectors across every continent. In 2023, global milk production reached approximately 930 million metric tons, with India, the United States, and China as the top producers. India alone contributed over 230 million metric tons of milk, while the U.S. accounted for over 100 million metric tons. The butter segment followed suit with more than 12 million metric tons consumed globally, driven by both household demand and industrial usage.

Butter is traditionally produced through the churning of cream, with over 70% of global production sourced from cow's milk. Major butter-producing countries include Germany, the United States, New Zealand, and France. In 2023, Germany produced over 500,000 metric tons of butter, while New Zealand exported more than 450,000 metric tons. Rising demand for value-added dairy products, lactose-free milk, and grass-fed butter is contributing to product diversification and segment expansion. The market also benefits from increasing urbanization and growth in organized retail, especially in Asia-Pacific and Latin America, which have witnessed a surge in packaged milk and butter consumption.

Key Findings

Top Driver reason: Increasing global consumption of dairy-based protein and fats across households and foodservice sectors.

Top Country/Region: India remains the largest milk producer, contributing over 25% of the global milk volume in 2023.

Top Segment: Milk-dairy dominates by volume due to its widespread daily consumption across all age groups and income segments.

Milk and Butter Market Trends

Several significant trends are reshaping the milk and butter market globally. One of the most noticeable developments is the growing preference for organic and grass-fed dairy products. In 2023, over 6% of total milk production in the United States—equating to nearly 6 million metric tons—came from certified organic farms. Europe saw similar patterns, with Germany and France together producing over 2.5 million metric tons of organic milk.

In the butter segment, consumers are increasingly choosing premium products such as cultured butter, clarified butter (ghee), and flavored butter. Cultured butter sales grew by 14% in 2023 in North America alone, with over 60,000 metric tons sold. In India, ghee demand surged past 1.8 million metric tons, driven by both traditional consumption and health-conscious marketing.

Lactose-free and plant-blended milk products are another rising trend. Over 850 million liters of lactose-free milk were sold across Europe in 2023, representing a shift in consumption patterns due to lactose intolerance and digestive health concerns. In Asia-Pacific, blended dairy products such as milk with added oats or almonds reached a sales volume of over 300 million liters.

Sustainability has also become a driving force in the milk and butter industry. More than 150 dairy companies globally adopted carbon-reduction targets in 2023, focusing on methane emissions and sustainable packaging. Over 80% of major dairy producers in New Zealand and Scandinavia transitioned to biodegradable or recyclable packaging for milk and butter.

E-commerce and direct-to-consumer models are expanding rapidly. In China, online dairy product sales, including milk and butter, surpassed 2.2 million metric tons in 2023, with a 23% increase in rural delivery points. This digital transition is allowing brands to expand consumer reach, particularly in developing countries with limited brick-and-mortar retail access.

Milk and Butter Market Dynamics

DRIVER

Rising demand for dairy-based protein and fats

Consumer awareness of high-quality animal proteins and healthy fats is significantly boosting milk and butter consumption. In 2023, per capita milk consumption in the United States reached 250 liters, while Germany registered 210 liters. Butter consumption in France stood at 8.2 kilograms per capita, one of the highest globally. With growing interest in whole-food diets and natural fats, particularly in developed nations, butter is regaining popularity over margarine. The increased inclusion of dairy in school lunch programs and healthcare facilities further supports this driver, with institutional demand accounting for more than 9 million metric tons of milk in 2023.

RESTRAINT

Volatile feed and production costs

The high variability in animal feed prices and energy costs poses a significant restraint on market stability. In 2023, global corn and soybean prices rose by over 12%, directly impacting dairy farmers’ operational expenses. Feed costs account for 60%–70% of total dairy farm input costs. These fluctuations, combined with rising energy and transportation prices, led to cost spikes that were not always passed onto consumers, especially in price-controlled markets like India and Pakistan. As a result, many small-scale producers faced financial strain, limiting production scalability.

OPPORTUNITY

Expansion in value-added and health-oriented dairy products

The shift toward health-conscious diets has opened new opportunities in the milk and butter market. High-protein milk, clarified butter (ghee), and lactose-free products are showing double-digit growth in multiple countries. In 2023, Japan saw the sale of over 95 million liters of fortified or functional milk. The United States reported a 10% rise in clarified butter sales, totaling over 70,000 metric tons. Emerging product lines, including probiotics-infused milk and Himalayan salt butter, are gaining market share, particularly in affluent urban centers across Asia and North America.

CHALLENGE

Regulatory and trade barriers

Cross-border trade of dairy products, especially butter, faces considerable challenges due to strict quality standards, import tariffs, and quota systems. In 2023, over 70 countries enforced dairy-specific sanitary and phytosanitary (SPS) regulations. The European Union maintained import quotas on butter, while the U.S. dairy export markets were impacted by new labeling regulations in Mexico and Canada. These restrictions affect the free flow of milk and butter products, particularly in emerging regions where demand outpaces local production capacity. Moreover, the requirement for hormone- and antibiotic-free certification poses compliance challenges for exporters.

Milk and Butter Market Segmentation

The milk and butter market is segmented by type and application. The primary types are milk-dairy and butter, while applications span across retail and foodservice distribution.

By Type

Milk-dairy: Milk accounts for over 90% of the total volume in the dairy sector, with over 930 million metric tons produced globally in 2023. India, the United States, China, and Pakistan are the major contributors. Cow’s milk accounts for over 82% of the total global milk production, followed by buffalo, goat, and sheep milk. Demand for low-fat and skimmed milk reached over 170 million metric tons in 2023, with substantial uptake in weight-conscious and diabetic populations.
Butter: Butter remains a key dairy fat, with global production exceeding 12 million metric tons in 2023. Europe led butter exports with 2.2 million metric tons shipped, while Asia-Pacific saw a sharp increase in domestic demand, with India and China consuming over 3 million metric tons combined. Cultured, whipped, and flavored butter segments are rising, with value-added formats accounting for over 20% of total butter sales in North America.

By Application

Retail: The retail segment constitutes over 65% of global milk and butter consumption. In 2023, supermarkets and convenience stores sold more than 580 million liters of packaged milk in Europe alone. Packaged butter sales across retail formats exceeded 2.6 million metric tons globally. Demand in this segment is driven by single-family households, convenience packaging, and expanding e-commerce.
Foodservice: The foodservice segment, comprising hotels, restaurants, and catering services, consumed over 190 million metric tons of milk and 3 million metric tons of butter in 2023. Demand is led by urban dining trends, industrial kitchens, and bakery chains, particularly in North America and Asia. Bakery usage alone accounted for over 1.2 million metric tons of butter worldwide.

Milk and Butter Market Regional Outlook

The milk and butter market displays diverse regional performances based on agricultural infrastructure, consumption habits, and industrial capacities.

North America

is a significant contributor to the milk and butter market, with the United States producing over 100 million metric tons of milk and over 900,000 metric tons of butter in 2023. California, Wisconsin, and Idaho accounted for over 50% of U.S. milk output. Canada produced more than 9 million metric tons of milk and over 110,000 metric tons of butter during the same period. The region's butter consumption is driven by bakery, foodservice, and retail demand, while milk sees high per capita intake through flavored, organic, and lactose-free variants. Online dairy sales exceeded 2.5 million liters weekly in urban U.S. centers in 2023.

Europe

remains a dairy powerhouse, producing over 160 million metric tons of milk in 2023, with Germany, France, and the Netherlands as top producers. France alone consumed 460,000 metric tons of butter, the highest in the EU. European nations are leaders in organic dairy farming, with over 6.2 million hectares dedicated to organic milk production. In 2023, the European Union exported over 1.2 million metric tons of butter globally. Strict quality control and traceability systems continue to support consumer confidence and export competitiveness across the continent.

Asia-Pacific

leads in milk production by volume due to India’s dominance. India produced over 230 million metric tons of milk in 2023, followed by China at over 35 million metric tons. Butter consumption in the region, particularly in India and Pakistan, is focused on traditional clarified butter (ghee), which surpassed 1.8 million metric tons in India alone. Growing middle-class populations and urbanization are driving demand for packaged milk and branded butter products. China’s e-commerce dairy sales increased by 21% year-on-year in 2023, driven by mobile app-based subscriptions and cold-chain expansion.

Middle East & Africa

They produced over 40 million metric tons of milk in 2023, with Egypt, Kenya, and South Africa as key producers. Butter consumption remains relatively low compared to other regions, but is growing rapidly in Gulf countries due to increased foodservice investments. Saudi Arabia imported over 35,000 metric tons of butter in 2023. In sub-Saharan Africa, milk distribution is still dominated by informal markets, although formal retail is expanding in Kenya and Nigeria. Urban milk demand exceeded 8 million metric tons across the region, indicating a rising consumer shift to pasteurized and packaged variants.

List of Top Milk and Butter Companies

Nestle
Lactalis
Danone
Fonterra
FrieslandCampina
Dairy Farmers of America
Arla Foods
Saputo
Yili
Mengniu
Muller Group
Amul
Meiji
DFA (Dean Foods)
DMK
Sodiaal
Agropur
Schreiber Foods
Ornua
Land O’Lakes
Organic Valley

Top Two Companies with the Highest Share

Nestle: remains the global leader with over 15 million metric tons of dairy processing capacity across 80 countries. In 2023, Nestle sold more than 6.8 billion liters of milk-based beverages and 300,000 metric tons of butter-based spreads.

Lactalis: holds the second-highest share, with operations in over 90 countries and processing more than 21 billion Liters of milk annually. In 2023, Lactalis produced over 500,000 metric tons of butter products, including traditional, spreadable, and cultured varieties.

Investment Analysis and Opportunities

Investment in the milk and butter market has seen substantial growth, particularly in value-added processing, cold-chain infrastructure, and international expansion. In 2023, dairy sector capital expenditure exceeded $8.2 billion globally, with over $1.5 billion focused solely on butter processing facilities.

India’s National Dairy Development Board approved $400 million in 2023 for the modernization of rural milk collection and chilling centers. These upgrades benefit over 17 million rural dairy farmers and support domestic demand for pasteurized milk and value-added butter products.

China saw over $1.2 billion in new dairy projects in 2023, including three automated butter processing plants by Mengniu and Yili. These facilities added over 200,000 metric tons of annual production capacity and integrated robotic packing systems to reduce labor costs by 15%.

North America remains focused on organic and premium dairy products. Organic Valley and Land O’Lakes collectively invested over $150 million in expanding grass-fed and sustainable dairy lines. Their combined sales of organic milk reached 1.9 billion liters in 2023.

Startups are also entering the market with innovation-led funding. In Europe, over 25 dairy tech startups received Series A and B funding between 2022 and 2023. These ventures focus on plant-enzyme-enhanced butter, AI-driven yield optimization, and blockchain-based supply chain verification.

Opportunities are prominent in African markets, where milk consumption is projected to grow. International aid and private sector partnerships led to over 25 new milk cooling units installed in rural Kenya, with each facility supporting over 500 dairy farmers. These projects aim to reduce milk spoilage, which averaged 20% in 2023 in regions without cold storage.

New Product Development

Product innovation is reshaping consumer engagement in the milk and butter market. In 2023, over 600 new dairy products were launched globally, including fortified, lactose-free, and flavor-infused variants.

Danone introduced a high-protein milk with 20 grams of protein per serving, selling over 45 million liters across the U.S. and France within one year. The product targets athletes and fitness enthusiasts and contains no added sugar.

Amul in India launched organic cow ghee under its premium line in mid-2023. The ghee recorded sales of over 3,200 metric tons within six months, driven by urban wellness trends and Ayurvedic positioning.

Lactalis introduced a spreadable butter infused with Mediterranean herbs in over 12 European markets. The product achieved 14,000 metric tons in sales in 2023 and received retailer expansion into Asia-Pacific in early 2024.

Yili developed a vitamin D-fortified milk specifically for elderly consumers, with over 22 million liters sold across China in 2023. The formulation supports bone health and was developed with local healthcare institutes.

Land O’Lakes launched a new whipped butter spray in 2023, intended for portion control and convenience in both home kitchens and foodservice outlets. The spray format accounted for over 5,000 metric tons in its first year, marking an expansion into functional packaging.

Five Recent Developments

Lactalis USA announced a $75 million investment to modernize its dairy infrastructure. The plan includes allocating $15 million to automate cottage cheese and sour cream production—boosting output by 30% and creating 20 new jobs—and dedicating $60 million to upgrading its Buffalo facility with six 50,000‑lb vats and robotic palletizers, adding roughly 30 more jobs
The Flora Food Group (formerly Upfield) committed $90 million in late 2024 to repurpose a former Kansas Dairy Ingredients plant in Hugoton, Kansas. The new hub, focused on butter, spreads, cream, and cream cheese products, will create 100 local jobs and serve both U.S. and Canadian markets
Starting in 2023, Bongards Creameries in Perham, Minnesota, began constructing a 70,000 sq ft expansion. The new plant includes cheese cooling rooms, vats, whey pasteurizers, permeate evaporators, and a whey dryer, all designed to boost capacity across multiple dairy product lines
Amul Dairy announced an investment of ₹75–100 crore (~$9–12 million) to establish a processing plant in Assam. The facility will initially handle 100,000 L/day of milk, supporting around 20,000 local dairy farmers, and is expected to begin operations within 18 months
Milky Mist Dairy announced plans for an IPO to raise ₹1,500–2,000 crore (approx. $180–240 million) at a ₹2,000 crore valuation. The funds will facilitate expansion into markets like Maharashtra, Gujarat, Rajasthan, and Delhi‑NCR

Report Coverage of Milk and Butter Market

The milk and butter market report provides a comprehensive overview of the global dairy sector, with in-depth coverage of production volumes, distribution networks, consumer preferences, and product-level segmentation. The report spans over 40 countries with data ranging from 2018 to 2024.

Detailed coverage includes global and regional production figures, trade volumes, processing capacities, and retail distribution statistics. The report includes over 200 quantitative tables comparing milk and butter output by country, application area, and product type.

Segmental analysis distinguishes between milk-dairy formats (skimmed, full-fat, fortified) and butter types (salted, unsalted, cultured, clarified). Each product line includes consumption volumes and end-user adoption by retail, foodservice, and industrial segments.

Company profiles cover 20 of the world’s top milk and butter producers, evaluating production sites, logistics strategies, product innovations, and distribution coverage. Market shares are benchmarked using volume-based data, with supply chain risk analysis included for import-dependent regions.

The report incorporates regulatory coverage, comparing food safety and labeling requirements across the U.S., EU, China, and ASEAN. Investment trends are evaluated, tracking capital allocation into automation, packaging, and green dairy technologies.

New product development is also assessed, with over 150 recent launches analyzed for consumer appeal, functionality, and regional traction. The scope extends to digital transformation, identifying emerging e-commerce platforms and traceability technologies across supply chains.

In conclusion, the milk and butter market report serves as a strategic guide for manufacturers, distributors, investors, and policymakers involved in the global dairy ecosystem, ensuring data-driven decisions in a competitive and evolving marketplace.