Demand for functional dairy foods and changing dietary habits are the main drivers of the Asia Pacific dairy market’s expansion.
“The rising demand for milk, cheese, yogurt, and other dairy products, especially in nations like China, India, and Indonesia, has led to an increase in dairy consumption in the region,” according to market analyst firm Renub Research’s report, Asia Pacific Dairy Market Size, Share & Forecast 2025–2033.
Renub projects the Asia Pacific dairy market will reach US$616.45bn by 2033, up from US$333bn in 2024, growing at a CAGR of 7.1%.
“With a population of more than 4.5 billion, Asia Pacific offers a sizable market where rising dairy product consumption has been fuelled by a growing middle class and a move toward Western diets. The industry has grown even more as a result of the increase in health-conscious consumers looking for probiotic, nutrient-rich, and fortified dairy products,” wrote researchers of the report.
This aligns with insights from the California Milk Advisory Board (CMAB), which is seeing an increasing interest in flavoured cheeses and high-protein products in the region.
Health and functionality drive demand
According to data analytics firm Euromonitor International, top product claims for dairy and its alternatives include high protein, good source of vitamins, natural, and good for immune health.
“The top 10 claims in dairy products and alternatives globally are illustrative of the main health benefits that the industry offers; for example, probiotic content in yoghurt and sour milk products linked to digestive and immune health,” said Euromonitor consultant Andres Chehtman.
Furthermore, dairy snacking is evolving into a wellness-driven space. Consumers seek indulgent yet functional formats that suit diverse occasions, from breakfast and fitness to social sharing. Texture, convenience and emotional satisfaction are key, said Euromonitor’s Maria Mascaraque, global insight manager for food and dairy.
“As snacking becomes part of daily wellbeing, dairy brands must innovate with portion-controlled formats and multisensory experiences that align with modern routines and eating occasions,” added Mascaraque.
In China, for example, Bel Group’s cheese brand The Laughing Cow taps into local breakfast habits by pairing cheese with familiar items like youtiao (fried dough sticks), creating new eating occasions.
There are also recent product launches featuring plant-based dairy that offer functional benefits and high protein. These include Oatside’s matcha oat latte that targets stress and sleep health, and Oatbedient’s oat milk powder, which caters to young consumers’ focus on health and clean label preferences.
However, the preference for plant-based options does not apply to indulgent snacks and desserts.
Non-dairy ice cream is a niche category that has gained some interest and activity in certain Far East Asian markets, as well as in Australasia.
But new product launches have declined over recent years, and quality issues have forced reformulation to improve flavour, which has not been very adventurous to date, according to an Innova Market Insights report on Ice Cream Trends 2025 in Asia Pacific: Dairy and Non-Dairy Innovation.
“In the Asia Pacific, ice cream is not usually associated with health, with the exception of some products that are low in sugar or supply probiotics. Ice cream trends reveal that local flavours, for example, matcha, and limited-edition flavours are important,” wrote the report.
However, experts remain optimistic for plant-based growth.
Plant-based dairy: Growth and challenges
Health, environmental concerns and animal welfare are the key drivers behind the growth of plant-based dairy.
“The global value CAGR over the forecast period (2024–2029) of 4.1% is expected to exceed the historic value CAGR (2019–2024) of 2.3%. The increasing portfolio, sophistication and functionality of plant-based products are supporting this growth,” shared Chehtman.
“High protein content is expected to make plant-based products more competitive with animal-based variants, and more attractive for vegan and vegetarian consumers. However, the industry still faces challenges in reducing preservatives and unfamiliar ingredients in plant-based dairy, as these leave products open to being perceived as unnatural. The focus will be on making natural, plant-based ingredients more functional and nutritious, without the excessive use of additives,” Chehtman added.
After years of rapid expansion, plant-based dairy is entering a more mature phase, with growth slowing across key markets. To restore momentum, brands must move beyond basic alternatives and invest in added value and functionality, said Mascaraque.
