Canada Dairy Market Size and Share

Canada Dairy Market (2026 - 2031)
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Canada Dairy Market Analysis by Mordor Intelligence

The Canada dairy market size is projected to be USD 16.20 billion in 2025, USD 16.93 billion in 2026, and reach USD 21.38 billion by 2031, growing at a CAGR of 4.78% from 2026 to 2031. Consumers are shifting from bulk staples toward margin-rich offerings that blend functional nutrition with verified sustainability, which is steering processors to invest in traceable supply chains, precision manufacturing, and low-carbon packaging. A stable quota system continues to buffer farm-gate prices, yet rising tariff-rate quotas under recent trade agreements are intensifying competition for premium cheese. Online grocery adoption, still modest at 5.2% of dairy sales, is scaling rapidly as subscription models lock in repeat milk and yogurt purchases. Capital-heavy automation, clean-label reformulation, and Net Zero credentials increasingly determine which processors capture the fastest-growing segments of the Canada dairy market.

Key Report Takeaways

  • By product type, cheese led with 38.56% of Canada's dairy market share in 2025; yogurt is forecast to expand at a 5.83% CAGR through 2031.
  • By distribution channel, off-trade outlets accounted for 84.25% share of the Canada dairy market size in 2025, while on-trade foodservice is advancing at a 5.56% CAGR over 2026-2031.

Note: Market size and forecast figures in this report are generated using Mordor Intelligence’s proprietary estimation framework, updated with the latest available data and insights as of January 2026.

Segment Analysis

By Product Type: Specialty Cheese Outpaces Commodity Cheddar

Cheese held 38.56% of the Canadian dairy Market share in 2025, yet the segment's composition is shifting as specialty varieties, including aged Gouda, artisanal blue, and ethnic formats like paneer and halloumi, are growing in the market. Mozzarella, the second-largest category, as foodservice pizza demand normalized post-pandemic, whereas processed cheese surged, driven by convenience-seeking households and institutional buyers prioritizing shelf stability. Retail cheese sales reached CAD 7.2 billion (USD 5.30 billion) in 2024, a 29% increase from CAD 5.6 billion in 2020, propelled by per-capita consumption rising to 15.24 kilograms per person, a 12% gain since 2014, according to the Agriculture and Agri-Food Canada[3]Source: Agriculture and Agri-Food Canada, “Cheese Sector Profile, September 2025,” agriculture.canada.ca. Imports claimed 59,060 metric tons in 2024, with the United States (34%), Italy (16%), and France (11%) dominating, yet tariff-rate quotas under CETA and CPTPP are enabling European cheesemakers to underprice domestic specialty producers in premium segments.

Yogurt is forecast to expand at 5.83% CAGR from 2026 to 2031, the fastest among product types, fueled by high-protein Greek and Icelandic skyr formats that appeal to fitness-conscious consumers and by drinkable yogurt pouches targeting on-the-go snacking. Retail yogurt sales climbed, with cottage cheese, a yogurt substitute in protein-focused diets, surging as social-media influencers promoted its versatility. Drinking milk, pressured by plant-based substitution and demographic shifts toward smaller households that waste less perishable fluid milk. Cream and dairy desserts, including ice cream, frozen novelties, and puddings, occupy niche roles, with ice cream consumption averaging 4 liters per capita annually and 25% of Canadians consuming it 3 to 4 times monthly, according to the Ontario Ministry of Agriculture, Food and Rural Affairs. Sour milk drinks, a traditional Eastern European category, remain marginal outside immigrant communities in Toronto and Vancouver.

Canada Dairy Market: Market Share by Product Type
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By Distribution Channel: E-Commerce Disrupts Store-Based Retail

Off-trade channels commanded 84.25% of market share in 2025, encompassing supermarkets, hypermarkets, small local grocers, discounters, and warehouse clubs, yet this dominance is eroding as e-commerce has surged. Five national retailers, Loblaws, Sobeys, Metro, Walmart Canada, and Costco, control the majority of grocery sales, granting them oligopsony power to demand slotting fees, promotional funding, and private-label production from dairy processors. Online grocery platforms, accelerated by pandemic-era adoption, are now permanent fixtures: Instacart, Voilà by Sobeys, and PC Express collectively fulfill over 1 million dairy orders weekly, with subscription models (e.g., auto-delivery of milk and yogurt) reducing churn and locking in brand loyalty, according to the USDA Foreign Agricultural Service. Specialist retailers, cheese boutiques, and organic markets serve affluent urban consumers willing to pay premiums for curated selections, yet their collective share remains low.

On-trade channels, restaurants, hotels, cafeterias, and institutional foodservice are forecast to grow at a 5.56% CAGR through 2031, recovering from pandemic-era closures and benefiting from hybrid work models that normalize office-based meal occasions. Foodservice milk consumption rebounded in 2025 as employees returned to offices 3 to 4 days weekly, driving demand for coffee-bar dairy and cafeteria milk cartons. Quick-service restaurants are innovating with dairy-centric menu items, Tim Hortons' cold-brew lattes, A&W's cheese-topped burgers, that drive incremental cheese and cream volumes. Institutional buyers (hospitals, universities, correctional facilities) prioritize cost and shelf life, favoring processed cheese, UHT milk, and powdered milk, yet sustainability mandates are pushing them toward suppliers with carbon-neutral certifications. Convenience stores, though classified as off-trade, function as hybrid channels: they capture impulse purchases of single-serve yogurt and chocolate milk but lack refrigeration capacity for full dairy assortments, limiting their strategic relevance.

Canada Dairy Market: Market Share by Distribution Channel
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Geography Analysis

Ontario and Quebec collectively account for 72% of Canada's milk production, with Ontario's 3,357 dairy farms and Quebec's 4,847 farms anchoring a supply chain optimized for proximity to major urban markets, Toronto, Montreal, Ottawa, and to U.S. export corridors, according to the Agriculture and Agri-Food Canada. Ontario's average herd size of 78 cows reflects consolidation trends, yet the province remains a hotbed for innovation: Gay Lea Foods, with 1,400 member farms across Ontario and Manitoba, pioneered lactose-free butter and A2 milk, while Agropur's 3,024 farmer-members in Ontario and Quebec supply milk for both domestic retail and export-oriented cheese production as stated by Ontario Ministry of Agriculture, Food and Rural Affairs[4]Source: Ontario Ministry of Agriculture, Food and Rural Affairs, “Dairy Farming in Ontario, 2024,” ontario.ca . Quebec's cheese sector is particularly dynamic, producing 40% of Canada's specialty cheese and leveraging Protected Geographical Indication (PGI) status for varieties like Oka and Le Migneron to command export premiums in the United States and European Union. The province's cooperative model, exemplified by Agropur and Nutrinor, distributes profits back to farmer-members, insulating them from commodity-price volatility and enabling long-term investments in automation and sustainability.

British Columbia and Alberta represent 15% of national milk production, yet their markets exhibit distinct characteristics. British Columbia's Fraser Valley, home to 450 dairy farms, prioritizes organic and pasture-raised production, aligning with the province's environmentally conscious consumer base and commanding 20% to 30% retail premiums, according to the Agriculture and Agri-Food Canada. Alberta's 465 farms, concentrated near Calgary and Edmonton, focus on commodity milk and cheese for foodservice channels, though the province is emerging as a hub for functional dairy: protein-fortified milk and yogurt tailored to the region's fitness-oriented demographics. Atlantic Canada, comprising New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland, holds 5% of production, with 295 farms serving regional markets and facing higher logistics costs due to distance from central processing hubs. The region's dairy sector is stabilized by supply management, which guarantees farm-gate prices, yet it struggles to attract young farmers: the average operator age exceeds 55, raising succession-planning concerns.

Provincial regulatory divergence is creating competitive asymmetry. Quebec's Bill 64, which mandates bilingual labeling on all consumer-facing products, raises packaging costs by CAD 3,000 to CAD 8,000 per SKU for out-of-province processors targeting Montreal retailers. British Columbia's extended-producer-responsibility regulations, effective 2025, require dairy processors to fund recycling infrastructure for plastic yogurt cups and milk jugs, adding CAD 0.02 to CAD 0.05 per unit in stewardship fees. These provincial policies favor local processors with established compliance infrastructure, yet they fragment the national market and raise barriers for smaller players seeking pan-Canadian distribution

Competitive Landscape

The Canadian dairy Market exhibits moderate concentration, with Saputo, Lactalis, and Agropur acquiring the largest share, yet private-label dairy and regional cooperatives (Gay Lea, St-Albert Cheese, Organic Meadow) prevent oligopolistic pricing and sustain innovation in niche segments. Saputo's fiscal 2024 Canadian revenues of CAD 4.922 billion (USD 3.63 billion) increased 4.8% year over year, driven by retail-channel growth and margin expansion in specialty cheese. Its 18 plants and 6,000 employees enable vertical integration from milk procurement to retail distribution. 

Lactalis, operating under brands like Black Diamond and Cheestrings, leverages its French parent's R&D capabilities to introduce European-style cheeses, brie, and camembert that command premiums in urban markets, while Agropur's cooperative structure allows it to prioritize farmer returns over shareholder dividends, creating strategic flexibility during commodity-price downturns. Technology adoption is differentiating leaders from laggards. Saputo's investments in automated cheese-aging facilities and real-time milk-quality sensors reduce batch variability and waste, while Agropur's blockchain-based traceability platform, piloted in 2025, enables retailers to verify farm-level sustainability claims, addressing consumer demand for transparency. 

White-space opportunities persist in ethnic dairy (paneer, labneh, quark), lactose-free premium cheese, and protein-fortified dairy desserts, where incumbents have been slow to innovate. Smaller cooperatives like Mariposa Dairy and Upper Canada Cheese are exploiting these gaps by co-packing for private-label brands and direct-to-consumer e-commerce, bypassing traditional retail gatekeepers. Emerging disruptors include precision-fermentation startups, such as Remilk, whose animal-free beta-lactoglobulin received Health Canada approval in February 2024, that threaten to commoditize dairy proteins and erode processors' ingredient-sourcing advantages.

Canada Dairy Industry Leaders

  1. Saputo Inc.

  2. Agropur Dairy Co-operative

  3. Groupe Lactalis

  4. Danone S.A.

  5. Gay Lea Foods

  6. *Disclaimer: Major Players sorted in no particular order
Canada Dairy Market Concentration
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Recent Industry Developments

  • October 2025: Danone Canada has invested $9 million in its Boucherville plant for the production of recyclable PET yogurt cups, integrating 30% recycled content and advancing sustainability. The initiative is backed by Quebec’s government and targets reduced plastic pollution.
  • April 2025: Lactalis Canada partnered with Nestlé Canada to enter the frozen yogurt category, launching iÖGO and iÖGO nanö products made with real fruit and 100% Canadian milk. The range offers SKUs in bars, tubs, and pops, distributed nationally.
  • February 2025: Oikos, a Danone Canada brand, launched the Oikos PRO line of high-protein, no added sugar Greek yogurts and drinkable yogurts. The range is locally made using 100% Canadian dairy milk and targets fitness-focused consumers seeking nutritional value.

Table of Contents for Canada Dairy Industry Report

1. INTRODUCTION

  • 1.1 Study Assumptions and Market Definition
  • 1.2 Scope of the Study

2. RESEARCH METHODOLOGY

3. EXECUTIVE SUMMARY

4. MARKET LANDSCAPE

  • 4.1 Market Overview
  • 4.2 Market Drivers
    • 4.2.1 Increasing adoption of automation and precision dairy technologies
    • 4.2.2 Rising consumer demand for organic and clean-label dairy products
    • 4.2.3 Growing market for lactose-free and digestive-friendly dairy options
    • 4.2.4 Sustainability-driven product positioning and packaging innovation
    • 4.2.5 Expansion of functional and value-added dairy products
    • 4.2.6 Growth of convenient and on-the-go dairy formats
  • 4.3 Market Restraints
    • 4.3.1 Stringent food safety and labeling regulations increasing operational complexity
    • 4.3.2 Rising consumer scrutiny regarding animal welfare and ethical sourcing
    • 4.3.3 Competition from plant-based dairy alternatives
    • 4.3.4 Supply chain and logistics vulnerabilities
  • 4.4 Supply Chain Analysis
  • 4.5 Regulatory Outlook
  • 4.6 Porter’s Five Forces
    • 4.6.1 Threat of New Entrants
    • 4.6.2 Bargaining Power of Buyers
    • 4.6.3 Bargaining Power of Suppliers
    • 4.6.4 Threat of Substitute Products
    • 4.6.5 Intensity of Competitive Rivalry

5. MARKET SIZE AND GROWTH FORECASTS (VALUE AND VOLUME)

  • 5.1 By Product Type
    • 5.1.1 Butter
    • 5.1.1.1 Salted Butter
    • 5.1.1.2 Unsalted Butter
    • 5.1.2 Cheese
    • 5.1.2.1 Natural Cheese
    • 5.1.2.1.1 Cheddar
    • 5.1.2.1.2 Cottage
    • 5.1.2.1.3 Ricotta
    • 5.1.2.1.4 Parmesan
    • 5.1.2.1.5 Others
    • 5.1.2.2 Processed Cheese
    • 5.1.3 Cream
    • 5.1.3.1 Fresh Cream
    • 5.1.3.2 Cooking Cream
    • 5.1.3.3 Whippng Cream
    • 5.1.3.4 Others (Clottted, Sour Cream)
    • 5.1.4 Dairy Desserts
    • 5.1.4.1 Ice Cream
    • 5.1.4.2 Cheesecakes
    • 5.1.4.3 Frozen Desserts
    • 5.1.4.4 Others (Puddings/desserts, trifles, fools)
    • 5.1.5 Milk
    • 5.1.5.1 Condensed milk
    • 5.1.5.2 Flavored Milk
    • 5.1.5.3 Fresh Milk
    • 5.1.5.4 UHT Milk (Ultra-high temperature milk)
    • 5.1.5.5 Powdered Milk
    • 5.1.6 Yogurt
    • 5.1.6.1 Drinkable
    • 5.1.6.2 Spoonable
    • 5.1.7 Sour Milk Drinks
  • 5.2 By Distribution Channel
    • 5.2.1 On-trade
    • 5.2.2 Off-trade
    • 5.2.2.1 Convenience Stores
    • 5.2.2.2 Specialist Retailers
    • 5.2.2.3 Supermarkets and Hypermarkets
    • 5.2.2.4 Online Retail
    • 5.2.2.5 Others

6. COMPETITIVE LANDSCAPE

  • 6.1 Market Concentration
  • 6.2 Strategic Moves
  • 6.3 Market Share Analysis
  • 6.4 Company Profiles (includes Global level Overview, Market level overview, Core Segments, Financials, Strategic Information, Market Rank/Share, Products and Services, Recent Developments)
    • 6.4.1 Saputo Inc.
    • 6.4.2 Agropur Dairy Co-operative
    • 6.4.3 Groupe Lactalis
    • 6.4.4 Danone S.A.
    • 6.4.5 Gay Lea Foods
    • 6.4.6 The Kraft Heinz Company
    • 6.4.7 Maple Dale Cheese Inc.
    • 6.4.8 St-Albert Cheese Co-operative
    • 6.4.9 Organic Meadow Limited Partnership
    • 6.4.10 Amalgamated Dairies Ltd.
    • 6.4.11 Reid’s Dairy Company Ltd.
    • 6.4.12 Nutrinor Co-operative
    • 6.4.13 Mariposa Dairy Ltd.
    • 6.4.14 Upper Canada Cheese Company
    • 6.4.15 Ultima Foods Inc.
    • 6.4.16 Galloping Goose Dairy
    • 6.4.17 The Bel Group
    • 6.4.18 COWS Inc.
    • 6.4.19 Arla Foods amba
    • 6.4.20 Dairy Farmers of Canada

7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Canada Dairy Market Report Scope

The dairy market is the global industry that produces, processes, distributes, and sells milk and milk-derived products such as butter, cheese, yogurt, and cream. The report segments the market by product type and distribution channel. By product type, it covers the butter segment, including salted and unsalted butter. The cheese segment is divided into natural cheese and processed cheese. Natural cheese is further categorized into cheddar, cottage, ricotta, parmesan, and others. The cream segment includes fresh cream, cooking cream, whipping cream, and other types. The dairy desserts segment includes ice cream, cheesecakes, frozen desserts, and other desserts. The milk segment includes condensed milk, flavored milk, fresh milk, UHT (ultra-high-temperature) milk, and powdered milk. The yogurt segment is divided into drinkable and spoonable yogurt. The report also covers sour milk drinks, assessing niche demand and regional consumption dynamics. By distribution channel, the market is segmented into on-trade and off-trade. The off-trade segment analyzes retail sales through convenience stores, specialist retailers, supermarkets and hypermarkets, online retail, and other channels. The study presents detailed market estimates and projections in both value and volume terms

By Product Type
ButterSalted Butter
Unsalted Butter
CheeseNatural CheeseCheddar
Cottage
Ricotta
Parmesan
Others
Processed Cheese
CreamFresh Cream
Cooking Cream
Whippng Cream
Others (Clottted, Sour Cream)
Dairy DessertsIce Cream
Cheesecakes
Frozen Desserts
Others (Puddings/desserts, trifles, fools)
MilkCondensed milk
Flavored Milk
Fresh Milk
UHT Milk (Ultra-high temperature milk)
Powdered Milk
YogurtDrinkable
Spoonable
Sour Milk Drinks
By Distribution Channel
On-trade
Off-tradeConvenience Stores
Specialist Retailers
Supermarkets and Hypermarkets
Online Retail
Others
By Product TypeButterSalted Butter
Unsalted Butter
CheeseNatural CheeseCheddar
Cottage
Ricotta
Parmesan
Others
Processed Cheese
CreamFresh Cream
Cooking Cream
Whippng Cream
Others (Clottted, Sour Cream)
Dairy DessertsIce Cream
Cheesecakes
Frozen Desserts
Others (Puddings/desserts, trifles, fools)
MilkCondensed milk
Flavored Milk
Fresh Milk
UHT Milk (Ultra-high temperature milk)
Powdered Milk
YogurtDrinkable
Spoonable
Sour Milk Drinks
By Distribution ChannelOn-trade
Off-tradeConvenience Stores
Specialist Retailers
Supermarkets and Hypermarkets
Online Retail
Others
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Market Definition

  • Butter - Butter is a yellow-to-white solid emulsion of fat globules, water, and inorganic salts produced by churning the cream from cows’ milk
  • Dairy - Dairy product include milk and any of the foods made from milk, including butter, cheese, ice cream, yogurt, and condensed and dried milk.
  • Frozen Desserts - Frozen dairy dessert means and includes products containing milk or cream and other ingredients which are frozen or semi-frozen prior to consumption, such as ice milk or sherbet, including frozen dairy desserts for special dietary purposes, and sorbet
  • Sour Milk Drinks - Sour milk is thick, curdled milk, with a sour taste, obtained from the fermentation of milk. Sour milk drinks such as kefir, laban, buttermilk have been considered in the study
KeywordDefinition
Cultured ButterCultured butter is prepared by having the raw butter go through chemical processing and has been added with certain emulsifiers and foreign ingredients.
Uncultured ButterThis type of butter is one which has not been processed in any way
Natural CheeseThe type of cheese in its most natural form. It is made from natural and simple products and ingredients, including fresh and natural salts, natural colors, enzymes, and high-quality milk.
Processed CheeseProcessed cheese undergoes the same processes as natural cheese; however, it requires more steps and many different forms of ingredients. Making processed cheese involves melting natural cheese, emulsifying it, and adding preservatives and other artificial ingredients or colorings.
Single CreamSingle cream contains around 18% fat. It’s a single layer of cream that appears over boiled milk.
Double CreamDouble cream contains 48% fat, more than double the amount of fat of single cream. It’s heavier and thicker than single cream
Whipping CreamThis has a much higher fat percentage than single cream (36%). Used to top cakes, pies, and puddings and as a thickener for sauces, soups, and fillings.
Frozen DessertsDesserts that are meant to be eaten in frozen condition. E.g., sherbets, sorbets, frozen yogurts
UHT Milk (Ultra-high temperature milk)Milk heated at a very high temperature. Ultra-high-temperature processing (UHT) of milk involves heating for 1–8 sec at 135–154°C. which kills the spore-forming pathogenic microorganism, resulting in a product with a shelf-life of several months.
Non-dairy butter/Plant-based butterButter made from plant-derived oil such as coconut, palm, etc.
Non-dairy YogurtYogurt made from typically made from nuts, like almonds, cashews, coconuts, and even other foods like soybeans, plantains, oats, and peas
On-tradeIt refers to restaurants, QSRs, and bars.
Off-tradeIt refers to supermarkets, hypermarkets, on-line channels, etc.
Neufchatel cheeseOne of the oldest kinds of cheese in France. It is a soft, slightly crumbly, mold-ripened, bloomy-rind cheese made in the Neufchâtel-en-Bray region of Normandy.
FlexitarianIt refers to a consumer preferring a semi-vegetarian diet, that is centered on plant foods with limited or occasional inclusion of meat.
Lactose IntoleranceLactose intolerance is a reaction in digestive system to lactose, the sugar in milk. It causes uncomfortable symptoms in response to the consumption of dairy products.
Cream CheeseCream cheese is a soft and creamy fresh cheese with a tangy taste made from milk and cream.
SorbetsSorbet is a frozen dessert made using ice combined with fruit juice, fruit purée, or other ingredients, such as wine, liqueur, or honey.
SherbetSherbet is a sweetened frozen dessert made with fruit and some sort of dairy product such as milk or cream.
Shelf stableFoods that can be safely stored at room temperature, or "on the shelf," for at least one year and do not have to be cooked or refrigerated to eat safely.
DSDDirect Store Delivery is the process in supply chain management wherein the product is delivered from manufacturing plant directly to the retailer.
OU KosherOrthodox Union Kosher is a kosher certification agency based in New York City.
GelatoGelato is a frozen creamy dessert made with milk, heavy cream and sugar.
Grass-fed CowsGrass-fed cows are allowed to graze in pastures, where they eat a variety of grasses and clover.
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Research Methodology

Mordor Intelligence follows a four-step methodology in all our reports.

  • Step-1: Identify Key Variables: In order to build a robust forecasting methodology, the variables and factors identified in Step 1 are tested against available historical market numbers. Through an iterative process, the variables required for market forecast are set, and the model is built on the basis of these variables.​
  • Step-2: Build a Market Model: Market-size estimations for the forecast years are in nominal terms. Inflation is not a part of the pricing, and the average selling price (ASP) is kept constant throughout the forecast period for each country.​
  • Step-3: Validate and Finalize: In this important step, all market numbers, variables, and analyst calls are validated through an extensive network of primary research experts from the market studied. The respondents are selected across levels and functions to generate a holistic picture of the market studied.​
  • Step-4: Research Outputs: Syndicated Reports, Custom Consulting Assignments, Databases & Subscription Platforms
research-methodology
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