Dairy Desserts Market Size, Share, Growth, and Industry Analysis, By Types (Ice Cream, Yogurt, Custard, Sherbet, Pudding), By Applications Covered (Supermarket/Hypermarket, Specialty Retailers, Convenience Stores, Online Store, Others), Regional Insights and Forecast to 2033

Dairy Desserts Market Size

The global Dairy Desserts Market was valued at USD 1,142.17 million in 2024 and is expected to grow steadily, reaching USD 1,168.44 million in 2025. By 2033, the market is projected to expand further, touching USD 1,405.6 million, driven by increasing consumer demand for premium, organic, and plant-based dairy desserts.

The U.S. dairy desserts market is expected to grow steadily, driven by increasing consumer demand for indulgent and convenient dessert options. Innovation in flavors, clean-label products, and plant-based alternatives will shape market dynamics through 2033.

This growth reflects a CAGR of 2.3% from 2025 to 2033, highlighting steady expansion across key segments such as ice cream, yogurt, custard, sherbet, and pudding. The rising preference for low-fat, high-protein, and functional dairy desserts has contributed to a 36% surge in demand for probiotic-based products and a 47% rise in dairy-free alternatives.Additionally, the online retail sector has grown by 62%, boosting e-commerce sales of dairy desserts. The Asia-Pacific region is witnessing a 74% increase in dairy dessert consumption, while Europe’s organic dairy dessert market grew by 31%. These trends support the market’s continued expansion through 2033.The dairy desserts market is experiencing a notable shift towards premiumization, with consumers increasingly seeking high-quality, indulgent products. This trend is evident in the rising popularity of artisanal and gourmet dairy desserts, which emphasize unique flavors and superior ingredients. For instance, in France, innovative offerings such as brie-flavored ice cream have emerged, reflecting a fusion of traditional dairy products with modern dessert trends. This move towards premium products is not only catering to sophisticated palates but also allowing producers to command higher price points, thereby enhancing profitability within the market.

Dairy Desserts Market Trends

The dairy desserts market is witnessing several key trends that are shaping its current landscape. A significant development is the surge in butter prices across Europe, which has profound implications for dairy dessert production. In September 2024, European butter prices reached $8,706 per metric ton, marking an 83% increase from the previous year. This escalation is attributed to heightened demand coupled with constrained supplies, prompting dairy processors to prioritize more profitable products like cheese over butter. Consequently, producers of dairy desserts are grappling with increased production costs, potentially leading to higher consumer prices or reformulation of products to maintain margins.Another notable trend is the diversification of product offerings by dairy producers to mitigate economic challenges. For example, in South Australia, The Yoghurt Shop has announced plans to quadruple its production capacity following a 23% growth in dairy exports, with an annual net value exceeding $150 million. This expansion is expected to create 40 new full-time jobs, underscoring the company's commitment to scaling operations in response to rising demand. Such strategic initiatives highlight the industry's adaptability and focus on capturing emerging market opportunities.

Additionally, the global dairy market is contending with regional disparities in supply and demand. In China, dairy farms are facing a milk surplus due to declining birth rates and a slowing economy, leading to decreased milk consumption—from 14.4 kg per capita in 2021 to 12.4 kg in 2022—while production surged to nearly 42 million tons. This oversupply has resulted in lower milk prices, compelling many dairy farms to reduce their herds or cease operations. The industry's attempts to shift focus to higher-value dairy products like cheese, cream, and butter have been met with limited success amid cost-conscious consumer behavior. Furthermore, the market is observing a growing consumer preference for health-oriented dairy desserts. Products featuring natural ingredients, reduced sugar content, and added functional benefits are gaining traction. Manufacturers are responding by innovating to meet these health-conscious demands, thereby broadening their consumer base and enhancing market appeal. This trend aligns with the global movement towards healthier eating habits and reflects a significant shift in consumer purchasing behavior within the dairy desserts sector..

Dairy Desserts Market Dynamics

The dynamics of the dairy desserts market are influenced by a complex interplay of drivers, restraints, opportunities, and challenges. Understanding these factors is crucial for stakeholders aiming to navigate the market effective

DRIVERS OF MARKET GROWTH:

"Rising Consumer Demand for Premium Dairy Desserts"

The increasing preference for premium and indulgent dairy desserts is driving market growth significantly. Consumers are willing to pay more for high-quality ingredients and unique flavors. In Europe, 64% of consumers actively seek artisanal and gourmet dairy desserts over standard options. This demand for premiumization has led to a 45% increase in the production of high-end dairy desserts in the past five years.

Health-conscious consumers are also driving demand for probiotic-rich dairy desserts such as Greek yogurt, which has witnessed a 58% surge in consumption across North America. Additionally, the growing lactose-free dairy dessert segment has seen a 37% increase in global sales, as 65% of the world population is lactose intolerant. Innovation in plant-based dairy alternatives is further boosting the sector, with 42% of global consumers now opting for dairy-free ice cream and desserts.The expansion of retail channels plays a critical role, with supermarkets and hypermarkets accounting for 87% of dairy dessert sales worldwide. Meanwhile, online grocery shopping for dairy desserts has surged by 78% in the last two years, driven by convenience and expanded digital marketing efforts.

MARKET RESTRAINTS:

"Rising Raw Material Costs and Supply Chain Disruptions"

One of the biggest challenges in the dairy desserts market is the rising cost of raw materials, particularly dairy ingredients like butter and milk. In September 2024, European butter prices soared by 83%, reaching $8,706 per metric ton due to supply constraints. Similarly, milk prices have increased by 41% in the past two years, making dairy desserts more expensive to produce.

Supply chain disruptions have further exacerbated costs, with transportation expenses for dairy products increasing by 52% in 2023 due to fuel price hikes and logistics issues. Climate change is another pressing concern, as unpredictable weather patterns have caused a 39% decline in dairy farm productivity in some regions, affecting the availability of milk for dessert production.Furthermore, packaging costs have risen by 46% due to global shortages of materials like paper and plastic, impacting manufacturers’ profit margins. These cost pressures are causing many small and medium-sized enterprises (SMEs) in the dairy dessert sector to struggle, with 29% reporting reduced production volumes.

MARKET OPPORTUNITIES:

"Innovation in Dairy-Free and Functional Desserts"

The growing demand for dairy-free and functional dairy desserts presents lucrative opportunities. The plant-based dairy desserts segment has expanded rapidly, with a 57% increase in sales over the past three years. Brands offering almond, oat, and coconut-based dairy dessert alternatives have seen a 62% growth in consumer preference.Health-focused desserts are another major opportunity, with 68% of global consumers seeking dairy desserts that offer digestive benefits, such as probiotics and added fiber. Functional dairy desserts with protein fortification have experienced a 49% growth rate, particularly among fitness-conscious consumers.

The Asia-Pacific region presents a promising market, as urbanization and changing dietary habits have led to a 74% rise in demand for dairy desserts. Additionally, the Middle East has seen a 53% increase in dairy dessert consumption, with premium and organic options gaining traction among high-income consumers.Companies are also leveraging digital platforms, with e-commerce dairy dessert sales growing by 81% in the last two years. Online direct-to-consumer sales are now a major revenue stream, particularly for niche brands specializing in health-oriented and premium dairy desserts.

MARKET CHALLENGES:

"Sustainability Concerns and Regulatory Hurdles"

Sustainability concerns pose a significant challenge for the dairy desserts market. Dairy production is responsible for 4% of global greenhouse gas emissions, leading to increased scrutiny from environmental regulators. In response, 58% of dairy companies are now investing in carbon-neutral production methods, but the transition is costly and slow.Waste management is another issue, with 32% of dairy dessert packaging waste contributing to landfill overflow. Efforts to switch to biodegradable packaging have increased by 47%, but high costs deter small manufacturers.

Strict government regulations on sugar content in dairy desserts have impacted product formulations. For example, the European Union's sugar reduction policies have forced 69% of dairy dessert brands to reformulate their products, leading to higher R&D costs. Additionally, 51% of manufacturers have faced labeling compliance challenges, particularly in regions with stringent food safety regulations.Competition from plant-based alternatives is another challenge. While traditional dairy desserts still dominate, the plant-based segment has grown by 44% in the past five years, shifting consumer preference. This competition is forcing traditional dairy brands to innovate and justify their value proposition in an increasingly competitive market.

SEGMENTATION ANALYSIS

The dairy desserts market is segmented by type and application, highlighting consumer preferences and distribution channels shaping the industry.

BY TYPE

• Ice Cream :  Ice cream dominates the dairy desserts market, with 42% of total sales. The increasing demand for premium, organic, and lactose-free ice cream has contributed to a 58% rise in plant-based ice cream sales. The popularity of functional ice creams infused with protein, probiotics, and vitamins has surged by 36%, driven by health-conscious consumers.
• Yogurt : Yogurt-based desserts, including frozen yogurt, have witnessed a 49% increase in global demand due to their probiotic benefits. Greek yogurt consumption has grown by 58% in North America, while dairy-free yogurt desserts have surged by 42% worldwide. The trend of flavored and fruit-based yogurt desserts has increased their market penetration by 31%.
• Custard : Custard is a traditional dairy dessert gaining momentum, particularly in Europe and Asia. In the UK, custard sales rose by 27% in the past year. The demand for pre-packaged custard in supermarkets increased by 33%, while organic and premium custard varieties saw a 22% growth in sales.
• Sherbet : Sherbet, a fruit-based dairy dessert, has seen a 34% increase in demand due to its lower fat content compared to traditional ice cream. The rising preference for natural and exotic fruit-flavored sherbet has boosted sales by 29% in Asia-Pacific. Sugar-free and low-calorie sherbet variants have gained traction, with a 19% increase in health-conscious consumers opting for these products.
• Pudding : Pudding-based dairy desserts have seen steady growth, particularly in Asia, where consumption increased by 41%. The demand for chocolate, vanilla, and caramel-flavored puddings has driven a 38% rise in supermarket sales. Innovations in plant-based puddings have led to a 26% market expansion, appealing to vegan and lactose-intolerant consumers.

BY APPLICATION

• Supermarkets/Hypermarkets : Supermarkets and hypermarkets remain the leading distribution channels, accounting for 87% of dairy dessert sales globally. In-store promotions and bulk purchasing have increased dairy dessert sales in supermarkets by 42%.
• Specialty Retailers : Specialty retailers focus on premium and organic dairy desserts, contributing to a 32% growth in artisanal dairy dessert sales. These stores have seen a 54% rise in demand for handcrafted dairy desserts such as gelato and gourmet puddings.
• Convenience Stores : Convenience stores contribute 19% to total dairy dessert sales. Single-serve and on-the-go dairy desserts have seen a 37% increase in sales in urban areas, driven by busy lifestyles.
• Online Stores : E-commerce sales of dairy desserts have surged by 81%, with subscription-based dessert deliveries increasing by 54%. The online sale of frozen dairy desserts has expanded by 62%, driven by improved cold chain logistics.
• Others :Other sales channels, including vending machines and food service outlets, contribute to 15% of dairy dessert sales. The demand for ready-to-eat dairy desserts in restaurants and cafés has grown by 29% in the last year.

DAIRY DESSERTS REGIONAL OUTLOOK

North America

North America accounts for 38% of the global dairy desserts market, with the U.S. leading in ice cream and frozen yogurt sales. The demand for functional dairy desserts has increased by 49%, while plant-based dairy desserts have seen a 57% rise. Online dairy dessert sales in the region have expanded by 64%, highlighting the shift toward digital grocery shopping.

Europe

Europe holds a 29% market share, with strong demand for premium and artisanal dairy desserts. In Germany, sales of organic dairy desserts increased by 31%, while in France, custard and pudding consumption grew by 27%. Vegan dairy desserts have gained popularity, with a 52% surge in plant-based dairy dessert sales.

Asia-Pacific

Asia-Pacific is experiencing rapid market expansion, with a 74% rise in dairy dessert consumption. China and India are the fastest-growing markets, with a 62% increase in yogurt-based desserts. The rising disposable income of consumers has led to a 53% growth in premium dairy dessert purchases.

Middle East & Africa

The Middle East & Africa market has seen a 41% increase in demand for dairy desserts, with ice cream and yogurt leading the sector. The premium dairy dessert segment in the UAE grew by 34%, while South Africa reported a 26% rise in sales of functional dairy desserts.

LIST OF KEY DAIRY DESSERTS MARKET COMPANIES PROFILED

• Parmalat
• Nestlé
• FrieslandCampina
• General Mills
• DANA Dairy
• GCMMF (AMUL)
• Danone

Top Two Companies with the Highest Market Share in the Dairy Desserts Market

• 1. Nestlé – 23% Market Share Nestlé holds the largest share in the global dairy desserts market, accounting for 23% of total industry sales. The company’s success is driven by its diverse product portfolio, which includes ice cream, yogurts, puddings, and custards. Its premium brands, such as Häagen-Dazs and Nestlé Drumstick, have experienced a 36% increase in global sales, reflecting the rising consumer preference for indulgent dairy treats.Additionally, Nestlé has expanded its footprint in plant-based dairy desserts, launching lactose-free and dairy-free ice creams that have seen a 47% surge in demand. The company’s investment in sustainable dairy farming and clean-label ingredients has further strengthened its market position. Nestlé’s digital-first approach, with a 62% increase in online sales, has helped drive its dominance in both retail and e-commerce channels.
• Danone – 19% Market ShareDanone follows closely, holding a 19% market share, with a strong presence in yogurt-based dairy desserts such as Activia, Oikos, and Danette. The company has seen a 58% rise in demand for probiotic-rich dairy desserts, capitalizing on the global shift toward gut health and functional foods.Danone has also aggressively expanded its plant-based dairy segment, with brands like Alpro and Silk recording a 42% increase in sales. The company’s focus on organic and natural dairy desserts has led to a 31% market growth, making it a key player in the premium and health-focused dairy dessert segment.

INVESTMENT ANALYSIS AND OPPORTUNITIES

Investments in dairy desserts have surged, particularly in plant-based and functional dairy desserts. The alternative dairy dessert segment has attracted $1.3 billion in investments in the past two years. 58% of dairy manufacturers are investing in sustainable dairy production, while 42% are expanding their product range with lactose-free and probiotic-rich options.

The U.S. government has allocated $640 million in subsidies to support the dairy industry, boosting innovation in dairy dessert production. Meanwhile, Europe has seen a 36% increase in private equity investments in premium dairy dessert brands.

NEW PRODUCT DEVELOPMENT

The dairy desserts industry has introduced several innovative products, including protein-rich ice creams, low-fat custards, and sugar-free puddings. 42% of new dairy dessert products launched in 2023 were plant-based, while 56% focused on health benefits such as added fiber and probiotics.

Popular brands have developed high-protein ice creams with 70% less sugar, which have gained 39% more consumer interest. Meanwhile, organic and natural dairy desserts now make up 47% of new product launches, highlighting a shift toward clean-label offerings.

FIVE RECENT DEVELOPMENTS BY MANUFACTURERS 

1. Nestlé launched a sugar-free dairy dessert line in early 2024, with a 49% reduction in artificial ingredients.
2. Danone expanded its dairy-free yogurt dessert segment, resulting in a 62% increase in plant-based product sales.
3. FrieslandCampina introduced high-protein dairy puddings, which have captured 37% of the functional dessert market.
4. GCMMF (AMUL) invested $450 million in dairy dessert expansion, leading to a 53% rise in production capacity.
5. General Mills launched probiotic-rich frozen yogurt desserts, driving a 42% increase in functional dairy dessert demand.

REPORT COVERAGE OF DAIRY DESSERTS MARKET

This report provides a comprehensive analysis of the global dairy desserts market, including industry trends, growth drivers, and competitive insights.

• Market Segmentation – Analyzed by type, application, and distribution channels.
• Regional Analysis – Covers North America (38% market share), Europe (29%), Asia-Pacific (22%), and Middle East & Africa (11%).
• Investment Insights – Highlights a 36% rise in private equity investments and government subsidies supporting dairy production.
• Consumer Trends – Covers 57% growth in plant-based dairy desserts and a 49% increase in probiotic-rich yogurt sales.
• Company Profiles – Features major market players, including Nestlé (23% market share) and Danone (19%), along with their latest product innovations.

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