The Organic Dairy Food and Drinks Market is experiencing robust growth as consumer preferences shift toward healthier, sustainable options. The market is projected to reach USD 54.64 billion by 2030, growing at a compound annual growth rate (CAGR) of 9.8%. 

This blog explores the key trends driving this dynamic market, supported by credible data from 2024 and beyond. Let us dive into the forces shaping organic dairy and what they mean for consumers and businesses.

Why Is Health Consciousness Driving Organic Dairy Demand?

Rising awareness of health and nutrition is a primary driver of the market. Young consumers are increasingly aware of the health implications of their dietary choices, and are increasingly seeking products free from synthetic additives, preservatives, and genetically modified organisms (GMOs). 

Organic products are perceived as safer and more nutritious, and this trend is expected to continue in 2025:

• People who eat the highest amount of organic food seem to have the fewest cases of a cancer called non-Hodgkin lymphoma.
• People who are pregnant might benefit from eating organic food. Contact with pesticides may be linked to pregnancy complications and problems with fetal development.
• People who eat recommended levels of vegetables, fruits and whole grains can limit their pesticide contact by choosing organic options. 

• Market Data & Health Benefits: The organic milk sector is witnessing a notable surge, with a remarkable 9% increase in sales. This growth is a fleeting trend and an indicator of shifting consumer preferences. Organic milk often boasts higher omega-3 fatty acid content and no synthetic hormones or antibiotics, making it an attractive option for health-conscious individuals.
  • As consumer preferences evolve, the demand for value-added dairy products is carving a new niche within the market. This burgeoning category, marked by a 44% year-to-date increase, represents a shift in how consumers view and consume dairy. Products such as lactose-free milk and drinkable yogurts are leading this transformation, driven by their promise of health benefits and convenience.
  • Recent indicators paint an intriguing picture. Notably, the Global Dairy Trade (GDT) Index marked a substantial 1.2% ascent—an unmistakable nod to the burgeoning demand revitalizing dairy economies worldwide. In particular, whole milk powder, a crucial commodity in the international dairy trade, surged to $3,984 per metric ton, achieving its highest valuation since mid-2022. 
  • This upward trajectory in global markets does not exist in a vacuum, and its repercussions extend deeply into domestic spheres. Rising global prices may lead to optimistic outcomes for dairy farmers at home. As international demand strengthens, it holds the potential to elevate milk prices locally, providing a more robust revenue framework for producers. Additionally, the increase in export opportunities could catalyze local markets, challenging them to meet swelling needs and adjust operational capacities. The future beckons with possibilities yet to unfold.
• Consumer Trends: Gen Z and Millennials are more willing than older generations to pay a premium for organic, prompting industry stakeholders to rethink their marketing strategy to win over more shoppers and further drive sales
• The survey of 2,522 Americans found Gen Z consumers, across economic levels, prioritize buying organic, while Millennials who make more than $100,000 annually also prioritize the certification. About half of each group are willing to pay a higher price for organic compared to products without the same claim. It further highlights that 45% of Gen X and 30% of Baby Boomers are willing to pay more for USDA certified organic products versus their conventional counterparts.
• Matthew Dillon, co-CEO of the Organic Trade Association noted that baby food “is a really bright spot” for organic with 93% of consumers in the category reporting buying at least “some” organic options.

Health consciousness is fueling organic demand, with consumers valuing nutrient-rich, chemical-free products. This trend is particularly strong among younger demographics, driving market growth.

How Is Sustainability Shaping the Organic Dairy Industry?

Sustainability is a cornerstone of the organic dairy market, driven by consumer preferences, regulatory pressures, and corporate strategies. Organic farming practices, which avoid synthetic inputs, appeal to environmentally conscious consumers and align with global sustainability goals.

• Industry Commitment: A 2024 McKinsey survey found that Sustainability has shifted from an emerging topic to a core factor for the dairy industry. 84% of dairy companies are investing in sustainability strategies, up from 74% in 2023.
• Consumer Sentiment: The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail is a comprehensive report that examines the influence of sustainable practices on shopping habits and purchase decisions among different generations. Conducted by First Insight, a leading digital product testing and decision-making platform, the report reveals that 62% of Gen Z shoppers prefer to buy from sustainable brands, and a staggering 73% are willing to pay more for sustainable products. Moreover, Gen Z and Millennials are the most likely to make purchase decisions based on personal, social, and environmental values.
• Regulatory Support: The U.S. Department of Agriculture’s organic certification standards like that of NOP, which is a federal regulatory program that develops and enforces consistent national standards for organically produced agricultural products sold in the United States, enhance consumer trust. These certifiers and USDA work together to enforce the standards, ensuring a level playing field for producers and protecting consumer confidence in the integrity of the USDA Organic Seal. This supports growth in the sector.

Sustainability is a key driver, with companies and consumers prioritizing eco-friendly practices. Regulatory frameworks and certifications further bolster this trend.

What Role Does Retail Expansion Play in Market Growth?

The accessibility of organic dairy products has expanded significantly. The organic milk production sector is experiencing rapid growth, surpassing the expansion rate of other dairy sectors worldwide. This increased availability is a major growth factor.

• Market Reach: The global organic dairy market is estimated to be worth about $54 billion US dollars by 2030, nearly more than double the $24 billion US dollars in 2021. Asia is one of the biggest contenders in organic dairy production, followed by North America.
• Company Strategies: Arla Foods Ingredients has signed a contract manufacturing agreement with Valley Queen, strengthening its ability to meet the growing demand for protein-enriched dairy in the US. The company is focused on providing good dairy nourishment from sustainable farming and operations and is also the world’s largest manufacturer of organic dairy products.

Are Innovative Products Redefining Organic Dairy?

Innovation is transforming the organic dairy market, with companies introducing new products to meet diverse consumer needs. From high-protein milk to lactose-free options, these innovations cater to health-conscious and specialty diets.

• Product Launches: In May 2024, Amul launched a high-protein “super milk” with 35 grams of protein per glass, targeting health-focused consumers.
• Functional Products: The rise of products with added probiotics is addressing dietary restrictions and wellness trends. Dairy products align with probiotics because they are traditionally associated with beneficial fermented bacteria and fermented dairy products. Consumers naturally relate fermented dairy products with living cultures and recognize the benefits of these cultures. Consumers strongly demand non-fermented products; therefore, the development and sales of non-fermented drinks are expected to increase.
• Packaging Innovations: Tetra packs dominated in 2024 due to their ability to preserve organic dairy. One of the best things about tetra pack milk is that it doesn’t need preservatives to stay fresh. The UHT process and the airtight packaging do all the work. The milk is a safe, nutritious, and convenient option for modern consumers. It offers the same health benefits as fresh milk, but with the added advantage of a longer shelf life and no need for refrigeration until opened. Unopened tetra pack milk can last for six months or more, making it a convenient option for people who don’t want to rush to the store frequently.

What Challenges Could Impact Organic Dairy Growth?

High prices of organic food are the main obstacle to the demand for organic dairy food and drinks market. Organic food is often more expensive than conventionally produced food. This is because organic farming generally operates on a smaller scale and production is more labour intensive. Also, without herbicides, pesticides and other chemicals, yields are generally smaller.

Next Steps: Actionable Takeaways for Businesses and Consumers

To capitalize on the organic dairy market’s growth, stakeholders can take the following steps:

• Invest in Sustainability: Companies should prioritize eco-friendly practices and transparent certifications to appeal to environmentally conscious consumers.
• Expand Retail Channels: Leverage supermarkets and e-commerce platforms to increase product accessibility, especially in emerging markets.
• Innovate Product Offerings: Develop high-protein, or functional dairy products to meet diverse consumer needs.
• Educate Consumers: Highlight the health benefits of organic dairy through clear, transparent marketing to build trust and drive demand.
• Address Price Barriers: Offer competitive pricing or smaller packaging options to attract cost-sensitive consumers in developing regions.

About the Author

Sneha Chakraborty is a seasoned SEO Executive and Content Writer with over 4 years of experience in the digital marketing space, bringing a strong command of online visibility strategies and a keen insight into the evolving digital landscape. She specializes in enhancing online visibility and user engagement through data-driven strategies and creative content solutions. She has been closely observing trends across various industry domains, bringing insightful perspectives into her writing. Sneha is passionate about translating complex digital concepts into accessible content for a wide audience. Outside of work, she enjoys reading, sketching, and exploring the outdoors through nature photography. The author can be reached at info@nextmsc.com.