Global Organic Dairy Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2024-2032)

Organic Dairy Market Analysis

Organic dairy farming involves the integration of animal-pasture-crop production to yield wholesome milk as well as milk products free from pesticides, chemical fertilisers, and hormones. The governments of many countries are encouraging organic farming as it has a number of health benefits for livestock and humans. It is estimated that organic milk has approx. 61.8% more omega-3 fats and less damaging omega-6 fats in comparison to conventional milk.

As a result, it helps in reducing health problems like cardiovascular diseases, depression, cancer, Alzheimer's, rheumatoid arthritis, and diabetes, among others. These factors are expected to favourably drive the growth of the organic dairy market in the coming years. Due to the growing prevalence of chronic diseases and changes in lifestyles, consumers are becoming more aware of the harmful effects of consuming synthetic ingredients, thus, leading to a greater adoption of organic dairy products in recent years.

Read more about this report - REQUEST FREE SAMPLE COPY IN PDF

Organic Dairy Market Trends

Innovations in the Market

Technological advancements in the manufacturing of low-fat products and reduced levels of sugar are expected to drive the demand for the product in the coming years. For instance, Nestlé announced the launch of an innovative protein aggregation technology in July 2024 that reduces milk fat content by up to 60%, while maintaining the desired creamy texture and flavour that appeals to consumers. This innovation enables the development of healthier dairy alternatives with fewer calories, catering to those who seek low-fat and organic choices without compromising on taste and can enhance the organic dairy market value. This technology has been utilised in products such as Ninho Adulto, a milk powder sold in Brazil, which provides the richness of full-fat milk with less fat and a smaller environmental impact.

The increasing consumer emphasis on health and wellness is also driving innovations in dairy protein products. For example, Glanbia Nutritionals announced the launch of UltraHi™ Protein Yogurt Technology, enabling the production of yoghurt with up to 50 grams of protein per serving.

Rising Trend of Sustainability in the Organic Dairy Sector

The dairy sector accounts for around 10% of the methane emissions in the United States, which fuels the demand for sustainability measures that can reduce the emission. In organic dairy farming, research is focused on using essential oils and feed additives such as red seaweed to reduce methane emissions from dairy cows, thereby promoting environmental sustainability and enhancing organic dairy market opportunities. This strategy aligns with consumer demand for organic products that contribute to both health and ecological well-being. The use of this feed further increased the milk fat and milk somatic cell count which indicates good quality in milk.

As per Cargill’s 2023 Sustainability Consumer Survey, more than half of consumers stated that they would prefer to incorporate more eco-friendly and sustainable food and beverages in their diet, meanwhile, 53% of shoppers stated that they prefer to purchase food and beverage products with low carbon content.

Industry News

June 2024

Organic Valley announced that it had added more than 50 new family farms to its corporation in the first four months of 2024, in an effort to safeguard small-scale organic farms.

July 2024

Califia Farms announced the launch of two plant milks, Organic Coconut milk and Organic Vanilla Almondmilk, that can be used for coffee, cereal, cooking, and baking, among others.

Opportunities in Organic Dairy Market

The United States Department of Agriculture (USDA) has introduced the Organic Dairy Marketing Assistance Program (ODMAP) for 2024, under which it allocated USD 58 million in funding to support organic dairy producers in managing their marketing expenses and stabilising their operations. This initiative aims to address challenges such as market fluctuations and rising input costs, which can pose challenges for organic farmers, boosting the organic dairy market revenue. Additionally, the program provides higher production limits and payment rates to improve the financial stability of organic dairy companies.

As per the USDA Dairy Business Innovation Initiatives, in 2024, the USDA allocated USD 11.04 million to several regional centres, including the University of Tennessee, the Vermont Agency of Agriculture, and California State University. This funding aimed to aid organic dairy farmers in adopting sustainable practices and developing innovative products, like artisanal cheeses, to improve their market visibility.

Organic Dairy Market Restraints

Organic dairy farming generally involves higher costs compared to conventional farming methods, primarily due to the increased price of organic feed, which can represent over 40% of total expenses. The scarcity of certified organic feed grains in the United States has led some farmers to grow their own or import these supplies, further driving up operational costs. In 2021, the estimated cost of organic feed was USD 16.35 per hundredweight, marking a rise from previous years. As per the organic dairy industry analysis, costs associated with organic certification, animal welfare, and sustainable practices add to the financial difficulties faced by these farmers.

The organic dairy sector experiences the same price fluctuations as the overall dairy market. Prices for organic milk can fluctuate significantly due to imbalances in supply and demand, and organic producers often face pricing challenges similar to those of conventional producers. For example, in the first half of 2024, organic cream sales dropped by 7%, which can be due to high retail prices and changes in consumer buying behaviour driven by current economic conditions.

Market Dynamics

High-protein organic dairy products, including yoghurt and nutritional shakes, are experiencing significant growth. These offerings appeal to consumers focused on muscle support and overall health. The launch of lactose-free organic dairy products also addresses the needs of consumers with dietary restrictions, while still providing the nutritional advantages associated with milk, which can positively impact the organic dairy demand forecast. For instance, Clover Sonoma announced that it has expanded its range of organic lactose-free milk by adding flavoured options like vanilla, chocolate, and strawberry. This development offers lactose-intolerant consumers more choices, enabling them to enjoy organic milk without any digestive discomfort.

The market is also expanding its range of value-added products, such as fortified and lactose-free milk alternatives. For instance, organic milk enhanced with lactoferrin and probiotics is becoming increasingly popular due to its immune-boosting properties. Furthermore, the premium cheese segment is introducing new products that may incorporate functional ingredients like omega-3 fatty acids and probiotics, appealing to consumers seeking dairy options that offer health benefits beyond basic nutrition.

Read more about this report - REQUEST FREE SAMPLE COPY IN PDF

Organic Dairy Industry Segmentation

“Organic Dairy Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Organic dairy products are the products procured from livestock, which are raised through organic farming methods. These products are preservative-free and are rich in antioxidants, omega-3 fatty acids, vitamins, and conjugated linoleic acid. Also, these products offer numerous health benefits such as strengthening immunity, boosting metabolism, reducing joint and muscle pain, and minimising the risk of heart and cancer diseases.

Based on the product type, the organic dairy market is divided into:

• Organic Fluid Milk
• Organic Yoghurt
• Organic Cheese
• Organic Butter
• Organic Cream
• Others

On the basis of packaging type, the global organic dairy market can be broadly categorised into:

• Pouches
• Tetra-Packs
• Bottles
• Cans
• Others

Based on the distribution channel, the industry can be segmented into:

• Supermarkets/ Hypermarkets
• Discount Stores
• Convenience and Grocery Stores
• Organic Specialty Stores
• Online/E-Retailing
• Direct Sales
• Others

By region, the market is divided into:

• Europe
• North America
• Latin America
• Asia Pacific
• Middle East and Africa

Organic Dairy Market Share

By Product Type Insights

Organic fluid milk accounted for the largest market share, due to the rising demand for clean-label milk which can offer a healthier alternative to traditional dairy milk. The demand for organic fluid milk is especially more prevalent among families with specific dietary needs which further boosts organic dairy market expansion.

Organic yoghurt has also gained prominence in the market in recent years due to its rich probiotic content, which can improve gut health and digestion. The rising trend towards functional foods also aids its demand as they can be fortified with vitamins, fibre, and proteins. Some of the most prominent organic yoghurts are Greek and plant-based yoghurts which cater to a specific group of consumers.

By Packaging Type Insights

Pouches are finding widespread use in the market due to their versatility, user-friendliness, and environmental benefits. They are commonly used for products like yoghurt and milk and especially appeal to consumers looking for convenient on-the-go consumption solutions.

As per the organic dairy market dynamics and trends, the tetra-packs segment dominated the market as they are considered ideal for the packaging of dairy products since they help preserve their overall nutritional value for a longer time. Tetra packs can preserve the quality of dairy products for the long term without being refrigerated, which makes it ideal for long-range transit and shipment of organic dairy products. These packs are also sustainable in nature and align with the long-term sustainability goals.

By Distribution Channel Insights

The supermarkets/ hypermarkets segment accounted for the majority of the organic dairy market and is expected to retain its dominance over the forecast period of 2024-2032. The segment growth is attributed to the availability of more shelf space and a wider choice among a large number of products. Supermarkets are generally located in the central part of the cities, which in turn attracts more buyers.

Organic speciality stores that offer health-oriented products have become increasingly popular among consumers who prioritise quality and sustainability. These stores usually provide a carefully selected collection of organic dairy items and emphasise transparency in their sourcing and production processes, appealing to both health-conscious and eco-conscious customers.

Read more about this report - REQUEST FREE SAMPLE COPY IN PDF

Organic Dairy Market Regional Insights

North America Organic Dairy Market Dynamics

The demand for organic dairy products in the region is fuelled by health-conscious consumers who prefer natural options that are free from hormones and pesticides. The USA is boosting the demand of organic dairy market with the presence of major brands such as Horizon Organic and Organic Valley which can enhance their offerings to include lactose-free and fortified milk products. Furthermore, strong retail networks in both the United States and Canada enhance the accessibility of organic dairy products through supermarkets and speciality shops. For example, as per the preliminary data from the U.S. Bureau of Labor Statistics, there were around 1,076,931 private retail establishments in the USA as of the third quarter of 2023.

Asia Pacific Organic Dairy Market Drivers

The organic dairy demand in this region is fuelled by rising incomes and a growing awareness of the health benefits linked to organic products. Countries such as China, Japan, and India are experiencing a shift in consumer preferences towards high-quality dairy products that are free from genetically modified organisms (GMOs) and artificial additives. For instance, India produced around 3.6 million metric tonnes of certified organic products, including organic dairy products, in the fiscal year 2023-2024.

Furthermore, rapid urbanisation and the expansion of the middle class are driving the growth of the organic dairy sector in Asia, leading to increased access to organic milk in urban retail stores.

Europe Organic Dairy Market Growth

Regionally, Europe dominated the global organic dairy market share owing to the increasing demand for organic food products in the region. Moreover, to manage the current supply and rising demand for these products, a large part of Europe's agricultural land is being utilised for organic farming. European consumers have also shown an increased preference for sustainable and ethically sourced products, due to rising environmental awareness and stringent government regulations.

For instance, the EU Organic Action Plan aims to increase the share of agricultural land allocated to organic farming to 25% by 2030. This ambitious target is a key element of the broader Farm to Fork (F2F) strategy, which focuses on developing a sustainable food system.

Latin America Organic Dairy Market Outlook

The regional market is witnessing substantial growth due to rising consumer awareness of health and environmental issues. Brazil and Argentina are two of the prominent markets, where rising incomes and an increased interest in sustainable agricultural practices are driving the organic dairy demand growth.

Furthermore, regional governments are supporting organic farming initiatives to promote sustainability and reduce environmental impact. For example, in Argentina, WIPO GREEN helps link local farmers with sustainable agricultural solutions, including bio-inputs such as biofertilisers and biopesticides, which reduce dependence on synthetic chemicals. This can help organic dairy farms maintain their organic standards.

Middle East and Africa Organic Dairy Market Trends

This region is emerging as an important market for organic dairy, primarily driven by the increasing purchasing power of wealthy consumers. Countries such as Saudi Arabia and the United Arab Emirates are witnessing a rise in organic dairy consumption, which can be due to rising awareness of health and a growing preference for imported organic products. The limited local production has led to a greater dependence on imports to satisfy the demand in these regions and increase the organic dairy industry revenue.

With a young population and increasing health awareness, the demand for organic dairy is expected to grow, especially in urban regions such as Riyadh and Jeddah.

Innovative Startups in Organic Dairy Market

Several startups are leveraging synthetic biology to create dairy proteins without traditional animal farming. By using precision fermentation, these startups produce milk proteins such as casein, which can be used in cheese production and various dairy alternatives. This approach appeals to consumers who favour plant-based and cruelty-free options, which are gaining traction in the organic dairy market. Furthermore, these companies are adopting high-end processing technologies such as ultra-high temperature (UHT) processing and microfiltration, to improve product safety and extend shelf life, making organic dairy products more accessible in remote areas.

Akshayakalpa Organic

Akshayakalpa Organic, based in India, is committed to producing organic milk and dairy products by partnering with local farmers to ensure the delivery of high-quality, chemical-free milk. The company emphasises sustainable farming practices, animal welfare, and a commitment to providing nutritious dairy options. Moreover, in 2022, the startup raised USD 15 million in funding to expand its operations in major Indian cities such as Chennai, Hyderabad, and Bengaluru.

Nutropy

This French startup in the organic dairy market specialises in the development of animal-free dairy alternatives through precision fermentation. Nutropy produces dairy proteins such as casein that are molecularly identical to those found in traditional dairy, but without involving animals in the process. Their products are designed to mimic the taste and texture of traditional dairy products, catering to consumers who prioritise sustainable, ethical, and health-conscious choices.

Competitive Landscape

The report presents a detailed analysis of the following key players in the global organic dairy market, looking into their capacity, market shares, and latest developments like capacity expansions, plant turnarounds, and mergers and acquisitions.

Several companies in the market are adopting sustainable agricultural technologies. Essential green practices such as precision agriculture, the use of renewable energy, and efficient waste management are playing a crucial role in minimising environmental impacts. For instance, these farms are using solar and wind energy and improving water efficiency through advanced irrigation techniques.

Key Industry Players

Horizon Organic

Founded in 1991, Horizon Organic is a leading organic dairy brand in the United States, known for its commitment to organic and sustainable farming practices. The company offers a wide range of dairy products such as milk, creamers, yoghurt, cheese, and butter, among others, all produced without synthetic growth hormones or antibiotics.

Aurora Organic Dairy

Aurora Organic Dairy, based in Colorado, the United States, is a vertically integrated dairy company in organic dairy market that focuses on USDA-certified organic products for private-label brands across the United States. The company manages its supply chain from farm to finished product, upholding strict standards for animal welfare, pasture management, and sustainable practices.

General Mills Inc.

General Mills, a global food company headquartered in Minnesota, the United States, owns a diverse portfolio of well-known brands from various food categories such as cereals, snacks, and meals, among others. The company is committed to sustainability and innovation, aiming to minimise its environmental footprint and improve food security.

Other major players in the organic dairy market are Arla Foods Amba, and Organic Valley, among others.

The comprehensive report looks into the macro and micro aspects of the industry. The EMR report gives an in-depth insight into the industry by providing a SWOT analysis as well as an analysis of Porter’s Five Forces model.

Recent Developments

January 2024

Akshayakalpa Organic, a prominent player in the organic dairy sector, announced its newest production facility at the Pooriyampakkam farm near Tamil Nadu, India.

January 2024

Danone, a French food group, announced that it signed an agreement to sell its premium organic dairy units to Platinum Equity, an investment firm, in the United States.