Fermented Dairy Products Market Thrives Amid Rising Yogurt and Kefir Consumption

 The global fermented dairy products market is poised for a decade of strong growth, driven by rising awareness of gut health, immunity, and overall wellness. Valued at USD 5.9 billion in 2025, the market is expected to nearly double, reaching USD 11.1 billion by 2035, with a robust compound annual growth rate (CAGR) of 6.5%.

This surge reflects how consumers across developed and developing economies are steadily incorporating fermented dairy foods such as yogurt, kefir, and cultured cheeses into their daily routines. Once viewed primarily as traditional staples, these products are now recognized as functional foods, celebrated for their probiotic content and clean-label appeal.

Julie Smolyansky, President and CEO of Lifeway Foods, summarized the industry’s transformation, noting that since the pandemic, kefir has become not only a health product but a versatile ingredient for smoothies and home cooking. This shift in consumer perception illustrates how fermented dairy has moved from niche to mainstream, offering opportunities for established players and new entrants alike.

The Role of Fermented Dairy in Global Food Systems

Fermented dairy products today represent 11–13% of the global dairy and dairy products industry. Within the fast-growing functional foods sector, they account for 15–18%, underscoring their importance in nutrition-led diets. Their share of the broader health and wellness foods industry ranges between 10–12%, reflecting consumer trust in their natural digestive benefits.

Most significantly, fermented dairy occupies a commanding 30–35% of the probiotics industry, making it one of the most accessible and widely consumed categories of probiotic-rich foods worldwide. Although its overall share of the food and beverage market is smaller—around 1.5–2%—it is rising steadily, as health-focused lifestyles drive long-term adoption.

Behind these numbers lies a sophisticated process of raw milk collection, bacterial culture development, fermentation, and careful post-processing. This supply chain requires both advanced technology and local expertise, creating room for global leaders and regional innovators to collaborate.

Product and Ingredient Trends Shaping the Market

Cheese continues to dominate as the most consumed fermented dairy product, holding a 38.2% share in 2025. Its broad appeal lies in its versatility—equally present in gourmet kitchens and fast-food chains. Innovations in probiotic and protein-enriched cheese further elevate its health profile, making it a resilient performer across consumer segments.

At the ingredient level, culture-based formulations lead the way, capturing an estimated 63% share in 2025. Live cultures resonate strongly with consumers seeking natural solutions for gut health and immunity. Unlike enzyme-modified ingredients, culture-based fermentation maintains authenticity and fits seamlessly with clean-label product demands.

When it comes to distribution, modern trade formats—supermarkets, hypermarkets, and health-focused stores—emerge as the primary sales channel, contributing more than 45% of revenues. Their wide reach, reliable cold chain, and promotional capabilities allow brands to showcase probiotic-enriched and premium dairy products effectively, especially in urban centers.

Clean-Label and Cold Chain: Two Pillars of Growth

Consumer demand for clean-label products is reshaping the industry. Additive-free, minimally processed fermented dairy foods are increasingly popular, as health-conscious buyers scrutinize labels for transparency. Reformulated yogurts with live cultures are now outpacing conventional offerings, and probiotic-driven SKUs are registering faster growth across global markets.

Parallel to this shift, investments in cold chain logistics are enhancing accessibility. Improved refrigeration, IoT-enabled monitoring, and last-mile delivery are reducing spoilage and enabling wider distribution, even in emerging economies. Countries like India and Brazil have seen remarkable improvements in availability as infrastructure strengthens, creating fertile ground for growth in tier-2 and tier-3 cities.

Regional and Country-Level Outlook

Growth patterns vary across geographies. India leads with a projected CAGR of 7.2% through 2035, leveraging its strong dairy culture and rising urban demand for packaged, probiotic-enhanced products. Japan follows closely with 6.1% CAGR, supported by its aging population and appetite for fortified dairy solutions.

In Europe, France and Germany stand out, growing at 5.9% and 5.7% respectively, driven by organic offerings and artisanal traditions. The United States, while mature, continues to grow at 4.2%, with Greek yogurt, kefir, and probiotic cheeses carving space within the wellness segment.

Together, these regional trends highlight the dual advantage of fermented dairy: its cultural familiarity in traditional diets and its modern positioning as a functional health food.

Industry Players: Leaders and Emerging Innovators

The fermented dairy products market is led by global giants like Danone, General Mills Inc., Nestlé Health Science, and Koninklijke DSM NV. Danone alone commands about 14% of the market, thanks to its expansive yogurt and cultured beverage portfolio. General Mills and Nestlé Health Science continue to push boundaries with fortified and functional innovations, while DSM plays a critical role in advancing culture-based technologies.

Meanwhile, niche and regional players are making their mark. Chobani, LLC has established itself as a leader in natural and clean-label dairy innovation, while Arla Foods Ingredients Group P/S focuses on nutritional enhancement. Japanese dairy firms such as Yotsuba Milk Products Co., Ltd. and European producers like Meadow Foods Limited and Parmalat S.p.A. are gaining visibility by offering tailored products for local markets.

Emerging entrants also play a key role, responding to cultural tastes and consumer priorities with novel formulations. From probiotic-enriched lassi in India to fortified cheeses in Europe, these innovators add diversity and vibrancy to the global market.

Opportunities for Stakeholders and New Manufacturers

For stakeholders, the next decade presents a rare mix of resilience and innovation. The clear global trend toward gut-friendly, functional nutrition ensures a steady demand base. At the same time, the industry’s fragmentation opens space for newcomers, particularly those offering clean-label, plant-dairy hybrids, or fortified options targeting aging populations.

E-commerce channels, combined with cold chain improvements, are making it easier for new manufacturers to scale quickly and target health-conscious millennials and Gen Z consumers. Partnerships with established retailers or co-branding with nutrition-focused companies can accelerate visibility in crowded markets.

Recent Industry Developments

Industry leaders are actively investing in expansion and partnerships. Danone, for example, recently signed 19 strategic collaborations under its “Partner for Growth” program, aimed at co-developing solutions across multiple regions. Lifeway Foods has extended its kefir and Farmer Cheese lines into major U.S. retail chains, reporting double-digit sales growth as demand for probiotic-rich dairy climbs.

These moves illustrate the sector’s dynamism, where innovation, partnerships, and consumer education intersect to sustain long-term momentum.

Purchase this Report for USD 3,500 Only | Get an Exclusive Discount Instantly! https://www.futuremarketinsights.com/checkout/4732

Everything You Need—within Your Budget. Request a Special Price Now! https://www.futuremarketinsights.com/reports/sample/rep-gb-4732

About Future Market Insights (FMI)

Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.

Contact Us:     

Future Market Insights Inc.
Christiana Corporate, 200 Continental Drive,
Suite 401, Newark, Delaware – 19713, USA
T: +1-347-918-3531