Japan Dairy Market Size and Share

Japan Dairy Market (2025 - 2030)
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Japan Dairy Market Analysis by Mordor Intelligence

The Japan dairy market size stands at USD 32.59 billion in 2025 and is projected to reach USD 40.51 billion in 2030, progressing at a 4.44% CAGR over the forecast period. Structural labor shortages, increasing feed costs, premium product positioning, and advancements in functional foods are shaping demand trends. Growing health consciousness and a focus on preventive nutrition are boosting the consumption of low-fat, probiotic, fortified, and lactose-free dairy products, with yogurt and functional drinks leading this growth. Yogurt's probiotic benefits and milk's shelf-stable formats are driving greater household adoption. At the same time, cheese and dairy desserts are gaining popularity for their indulgent appeal. Retailers are focusing on chilled convenience formats to cater to urban commuters, while rural consumers are increasingly opting for ambient-stable UHT milk. In Hokkaido, farm automation is enhancing yields and partially addressing labor shortages. Concurrently, investments in precision fermentation and bifidobacteria strains are positioning Japan as a leader in functional dairy innovation, particularly under the Foods with Function Claims regime.

Key Report Takeaways

  • By product type, yogurt led with 36.52% of the Japanese dairy market share in 2024, while milk is forecast to expand at a 4.95% CAGR through 2030.
  • By distribution channel, the off-trade segment held 71.75% share of the Japanese dairy market size in 2024, and the on-trade channel is advancing at a 5.38% CAGR to 2030.

Segment Analysis

By Product Type: Yogurt Leads, Milk Accelerates

In 2024, yogurt accounted for 36.52% of Japan's dairy market, reinforcing its role as a breakfast essential, a popular snack, and a health-focused product. Meanwhile, milk is expected to grow at the fastest rate among dairy products, with a forecasted CAGR of 4.95% through 2030. Probiotic advancements drive yogurt's leadership: Kirin's LC-Plasma strain, Meiji's R-1 series, and Morinaga's bifidobacteria formulations have elevated yogurt from a basic commodity to a preventive health product. Manufacturers have also obtained "Foods with Function Claims" certifications, enabling them to promote immune-support benefits on packaging. Drinkable yogurt formats appeal to on-the-go consumers, while spoonable options are preferred for sit-down breakfasts and post-meal consumption. Milk's growth is supported by ultra-high-temperature processing, which extends its shelf life to 150 days and facilitates room-temperature distribution. This innovation reduces cold-chain expenses and increases accessibility, particularly in rural areas and among single-person households. Flavored milk options, such as coffee, matcha, and strawberry, are gaining popularity with younger consumers, and UHT milk is also experiencing growth.

Cheese ranks as the third-largest segment, with natural cheese showing significant growth. This expansion in natural cheese is driven by its adoption in Western-style cooking and a shift toward premium products. Consumers are increasingly choosing Cheddar, Parmesan, and artisanal varieties for cooking and charcuterie boards. Cream, including fresh, cooking, and whipping variants, serves both foodservice and home-baking needs, with demand peaking during holiday seasons. Dairy desserts, such as ice cream, cheesecakes, and frozen treats, are growing as indulgence categories. Notable flavor innovations include Morinaga's Pino Matcha and Meiji's collaborative desserts. Sour milk drinks, a niche category, attract consumers seeking tangy, fermented flavors and probiotic benefits. This segmentation reveals a dual market structure: yogurt and milk drive volume, while cheese and desserts boost margins. As a result, processors are strategically managing their portfolios to optimize both revenue and profitability.

Japan Dairy Market: Market Share by Product Type
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By Distribution Channel: Off-Trade Dominates, On-Trade Rebounds

In 2024, off-trade channels accounted for 71.75% of Japan's dairy market revenue, highlighting the extensive presence of convenience stores and supermarkets in food-and-beverage sales. Convenience stores, strategically located in urban areas and operating 24/7, have become key points for impulse purchases, offering single-serve yogurt, flavored milk, and cheese snacks. Supermarkets and hypermarkets, led by chains like Aeon and Ito-Yokado, attract consumers with a broader product range and promotional pricing, encouraging bulk buying and pantry stocking. Online retail, which gained momentum during COVID-19 and continues to grow through subscription models, is increasing its market share. Platforms such as Amazon Fresh and Rakuten simplify the delivery of ambient-stable UHT milk and frozen desserts, effectively addressing cold-chain logistics challenges. Specialist retailers, including organic and health-food stores, cater to premium and niche markets, while warehouse clubs and gas stations capture opportunistic purchases.

On-trade channels, comprising cafés, restaurants, hotels, and institutional buyers, are experiencing the fastest growth among distribution types, with a 5.38% CAGR projected through 2030. This growth is driven by the recovery of inbound tourism and the expansion of the foodservice sector. Cafés are boosting demand for premium milk varieties, such as grass-fed, organic, and barista-grade, that command higher prices than standard fluid milk. Hotels and fine-dining establishments are curating cheese and dessert menus featuring artisan and imported selections. Institutional buyers, including schools, hospitals, and corporate cafeterias, are focusing on functional dairy products, like probiotic yogurt and fortified milk, that align with wellness trends and dietary guidelines. Domestic producers are benefiting from this on-trade growth by supplying foodservice-grade products, such as bulk cream, shredded cheese, and portion-controlled butter, which are not typically available in off-trade channels. This evolving landscape is creating a two-tier market: off-trade channels emphasize convenience and affordability, while on-trade channels focus on quality and experience. Processors are adapting product specifications, packaging, and pricing to meet the needs of both segments.

Japan Dairy Market: Market Share by Distribution Channels
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Geography Analysis

Hokkaido dominates Japan's dairy market, producing over 50% of the nation's raw milk and hosting the majority of pastured cattle. This dominance is driven by its cooler climate, expansive land compared to other prefectures, and historical investments in dairy infrastructure, including cooperative processing facilities and cold-chain logistics. The region leads in automation, with farms adopting robotic milking systems and piloting silvopasture and intensive rotational grazing. On the consumption side, metropolitan areas like Tokyo, Osaka, and Nagoya account for significant retail sales. Urban prefectures such as Tokyo, Kanagawa, Osaka, and Aichi are driving premiumization, with consumers willing to pay more for functional yogurt, artisan cheese, and grass-fed milk. Retail assortments in these areas increasingly favor single-serve, on-the-go formats that cater to commuter lifestyles.

Rural prefectures outside Hokkaido, including Tohoku, Chugoku, and Kyushu, face challenges such as labor shortages and farm consolidation pressures. These regions are experiencing a decline in dairy farming households, with average herd sizes remaining small by international standards. However, government subsidies under the Smart Agriculture initiative are helping to offset costs for robotic milking and sensor technology. Cooperative-led succession programs are also addressing these challenges by matching retiring farmers with young entrants. In June 2024, the Ministry of Agriculture introduced a revised foreign labor policy, aiming to include livestock farming in the Specified Skilled Worker visa program by 2027. This policy seeks to stabilize labor supply in regions where domestic recruitment has stalled.

Okinawa and southern prefectures, characterized by warmer climates and limited grazing land, rely heavily on imported dairy products and exhibit lower per-capita consumption. However, tourism-driven foodservice demand is creating niche opportunities for premium ice cream and dessert formats. The geographic fragmentation of Japan's dairy market highlights a strategic challenge: production is concentrated in Hokkaido, while consumption is dispersed across the country. To address this, processors are investing in advanced cold-chain logistics, regional distribution centers, and UHT capacity to optimize reach and manage costs effectively.

Competitive Landscape

The Japanese dairy market is moderately consolidated, with Meiji Dairy Corp., Morinaga Milk Industry Co. Ltd, Danone SA, Yakult Honsha Co. Ltd, and Megmilk Snow Brand Co. Ltd. collectively commanding significant share through vertically integrated supply chains, decades of brand equity, and extensive cold-chain infrastructure that spans farm procurement, processing, and retail distribution. They focus on rapid innovation, introducing numerous SKUs annually across yogurt, milk, cheese, and dessert categories. Additionally, they utilize real-time point-of-sale data from convenience store partnerships to quickly test and scale new products. Multinational companies like Danone, Fonterra, Arla, and Savencia are targeting niche markets by emphasizing grass-fed branding, organic certifications, and functional ingredients. These firms aim at premium segments where consumers are less price-sensitive and prioritize differentiation. Reflecting the industry's growing focus on sustainability, Danone partnered with Ajinomoto in September 2024 to reduce CO2 emissions in dairy supply chains using AjiPro-L feed supplements. Fonterra Japan highlights New Zealand's grass-fed products and has secured distribution for its protein drinks in 7-Eleven stores. Meanwhile, Arla is converting its ARINCO facility into an ingredients hub and collaborating with Sodiaal to expand European cheese imports.

In Japan's dairy sector, companies are prioritizing product innovation and operational efficiency to maintain their competitive edge. Leading players are expanding their product portfolios with new launches, particularly in yogurt and functional dairy products, to appeal to health-conscious consumers. To ensure product safety and consistency, firms are enhancing their distribution networks and implementing advanced quality control measures in manufacturing. Many companies are forming strategic partnerships with local farmers and increasing research and development investments to secure raw materials and drive innovation. Additionally, while strengthening their domestic operations through facility modernization and capacity expansion, manufacturers are also exploring opportunities in international markets, especially in Asia.

Opportunities are emerging in lactose-free, A2 beta-casein, and hybrid dairy-plant formats, where demand exceeds supply. Direct-to-consumer channels, which bypass traditional retail intermediaries and offer higher margins, are also gaining momentum. Smaller players like Takanashi Dairy and Koiwai Dairy (a Kirin subsidiary) are capitalizing on regional authenticity and on-farm processing to command premium pricing. Technology-driven disruptors are leveraging precision fermentation to produce dairy proteins without cows, a development that could transform ingredient sourcing by the 2030s. Kirin's LC-Plasma licensing model, which incorporates its proprietary lactobacillus strain into third-party products, illustrates how intellectual property can be monetized across the dairy value chain. This approach generates royalty income and expands market presence without requiring significant manufacturing investments. Competition is most intense in yogurt and flavored milk segments, where product life cycles are short and shelf space is highly contested. To build consumer loyalty and counter private-label competition, processors are investing in engagement initiatives such as farm tours, tasting events, and digital communities. The market is evolving, with large-scale players focusing on volume and efficiency, while niche entrants emphasize storytelling, quality, and functional benefits. The market's size and diversity allow both strategies to coexist and succeed.

Japan Dairy Industry Leaders

  1. Danone SA

  2. Megmilk Snow Brand Co. Ltd.

  3. Meiji Dairies Corp.

  4. Morinaga Milk Industry Co. Ltd.

  5. Yakult Honsha Co. Ltd.

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

  • October 2025: Meiji has introduced yogurt products designed to help regulate blood sugar levels. The new products, 'Meiji Haemoglobin A1c Countermeasure Yogurt' and its drinkable variant, 'Meiji Haemoglobin A1c Countermeasure Yogurt Drink Type', will be available nationwide.
  • March 2025: Meiji Co., Ltd. introduced "Meiji W no Skincare Yogurt," a functional yogurt developed to help consumers address UV exposure and skin dryness from within. The product is advertised as a Food with Functional Claims (FFC).
  • March 2024: Kaneka Group's Betsukai Wellness Farm, recognized for its organic circular dairy farming, has introduced Pur Natur™, an organic milk made exclusively from its organic raw milk. This product features the rich flavor of milk derived from cows raised on the farm's fertile lands.

Table of Contents for Japan 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 Growing demand for premium cheese and yogurt
    • 4.2.2 Health-conscious shift to functional dairy
    • 4.2.3 Rising awareness of nutritional benefits of dairy in aging population
    • 4.2.4 Advances in dairy processing technology improving shelf life and variety.
    • 4.2.5 Strong domestic dairy brands with extensive product innovation
    • 4.2.6 Robotic milking adoption in Hokkaido
  • 4.3 Market Restraints
    • 4.3.1 Ageing dairy-farmer population
    • 4.3.2 Gen-Z shift toward plant-based options
    • 4.3.3 Limited availability of grazing land in Japan
    • 4.3.4 Consumer concerns over lactose intolerance and dairy allergies
  • 4.4 Consumer Behaviour Analysis
  • 4.5 Regulatory Landscape
  • 4.6 Technological Outlook
  • 4.7 Porter's Five Forces
    • 4.7.1 Threat of New Entrants
    • 4.7.2 Bargaining Power of Buyers
    • 4.7.3 Bargaining Power of Suppliers
    • 4.7.4 Threat of Substitutes
    • 4.7.5 Intensity of Competitive Rivalry

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

  • 5.1 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 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 On-line Retail
    • 5.2.2.5 Others (Warehouse clubs, gas stations, etc.)

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 as available, Strategic Information, Market Rank/Share for key companies, Products and Services, and Recent Developments)
    • 6.4.1 Bel Japon KK
    • 6.4.2 Danone SA
    • 6.4.3 Megmilk Snow Brand Co. Ltd
    • 6.4.4 Meiji Dairy Corp.
    • 6.4.5 Morinaga Milk Industry Co. Ltd
    • 6.4.6 NH Foods Ltd
    • 6.4.7 Rokko Butter Co. Ltd
    • 6.4.8 Takanashi Dairy Co. Ltd
    • 6.4.9 Yakult Honsha Co. Ltd
    • 6.4.10 Yotsuba Milk Products Co. Ltd
    • 6.4.11 Koiwai Dairy Products Co. Ltd
    • 6.4.12 Arla Foods Japan K.K.
    • 6.4.13 Fonterra Japan Ltd
    • 6.4.14 Savencia Fromage and Dairy Japan
    • 6.4.15 Kraft Heinz Japan Co. Ltd
    • 6.4.16 Asahi Group Foods Ltd
    • 6.4.17 Ezaki Glico Co. Ltd
    • 6.4.18 Kyodo Milk Industry Co. Ltd
    • 6.4.19 Lacto Japan Co. Ltd
    • 6.4.20 Hokkaido Dairy Co-op

7. MARKET OPPORTUNITIES AND FUTURE OUTLOOK

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Japan Dairy Market Report Scope

Product Type
Butter Salted Butter
Unsalted Butter
Cheese Natural Cheese Cheddar
Cottage
Ricotta
Parmesan
Others
Processed Cheese
Cream Fresh Cream
Cooking Cream
Whippng Cream
Others (Clottted, Sour Cream)
Dairy Desserts Ice Cream
Cheesecakes
Frozen Desserts
Others (Puddings/desserts, trifles, fools)
Milk Condensed milk
Flavored Milk
Fresh Milk
UHT Milk (Ultra-high temperature milk)
Powdered Milk
Yogurt Drinkable
Spoonable
Sour Milk Drinks
Distribution Channel
On-trade
Off-trade Convenience Stores
Specialist Retailers
Supermarkets and Hypermarkets
On-line Retail
Others (Warehouse clubs, gas stations, etc.)
Product Type Butter Salted Butter
Unsalted Butter
Cheese Natural Cheese Cheddar
Cottage
Ricotta
Parmesan
Others
Processed Cheese
Cream Fresh Cream
Cooking Cream
Whippng Cream
Others (Clottted, Sour Cream)
Dairy Desserts Ice Cream
Cheesecakes
Frozen Desserts
Others (Puddings/desserts, trifles, fools)
Milk Condensed milk
Flavored Milk
Fresh Milk
UHT Milk (Ultra-high temperature milk)
Powdered Milk
Yogurt Drinkable
Spoonable
Sour Milk Drinks
Distribution Channel On-trade
Off-trade Convenience Stores
Specialist Retailers
Supermarkets and Hypermarkets
On-line Retail
Others (Warehouse clubs, gas stations, etc.)
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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
Keyword Definition
Cultured Butter Cultured butter is prepared by having the raw butter go through chemical processing and has been added with certain emulsifiers and foreign ingredients.
Uncultured Butter This type of butter is one which has not been processed in any way
Natural Cheese The 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 Cheese Processed 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 Cream Single cream contains around 18% fat. It’s a single layer of cream that appears over boiled milk.
Double Cream Double cream contains 48% fat, more than double the amount of fat of single cream. It’s heavier and thicker than single cream
Whipping Cream This 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 Desserts Desserts 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 butter Butter made from plant-derived oil such as coconut, palm, etc.
Non-dairy Yogurt Yogurt made from typically made from nuts, like almonds, cashews, coconuts, and even other foods like soybeans, plantains, oats, and peas
On-trade It refers to restaurants, QSRs, and bars.
Off-trade It refers to supermarkets, hypermarkets, on-line channels, etc.
Neufchatel cheese One 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.
Flexitarian It refers to a consumer preferring a semi-vegetarian diet, that is centered on plant foods with limited or occasional inclusion of meat.
Lactose Intolerance Lactose 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 Cheese Cream cheese is a soft and creamy fresh cheese with a tangy taste made from milk and cream.
Sorbets Sorbet is a frozen dessert made using ice combined with fruit juice, fruit purée, or other ingredients, such as wine, liqueur, or honey.
Sherbet Sherbet is a sweetened frozen dessert made with fruit and some sort of dairy product such as milk or cream.
Shelf stable Foods 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.
DSD Direct Store Delivery is the process in supply chain management wherein the product is delivered from manufacturing plant directly to the retailer.
OU Kosher Orthodox Union Kosher is a kosher certification agency based in New York City.
Gelato Gelato is a frozen creamy dessert made with milk, heavy cream and sugar.
Grass-fed Cows Grass-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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