Japan Dairy Market Size and Share
Market Overview
| Study Period | 2017 - 2030 |
|---|---|
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 32.59 Billion |
| Market Size (2030) | USD 40.51 Billion |
| Growth Rate (2025 - 2030) | 4.44% CAGR |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
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Japan Dairy Market Analysis by Mordor Intelligence
The Japan Dairy Market size is estimated at 32.59 billion USD in 2025, and is expected to reach 40.51 billion USD by 2030, growing at a CAGR of 4.44% during the forecast period (2025-2030).
The Japanese dairy industry is experiencing significant transformation driven by evolving retail infrastructure and modernized distribution channels. Supermarkets and hypermarkets dominate the retail landscape, commanding 62% of overall dairy product sales in 2022, owing to their extensive product selection and strategic merchandising capabilities. The retail sector is rapidly modernizing, with approximately 23.5% of supermarkets and hypermarkets implementing self-payment kiosks and cashless payment systems in 2022. This digital transformation is reshaping consumer shopping experiences and streamlining operations for retailers, while also addressing Japan's labor shortage challenges in the retail sector.
The emergence of omnichannel retail strategies is revolutionizing dairy products distribution in Japan. As of 2022, the country boasted over 2.5 million online retail stores, representing a significant shift toward digital commerce. This expansion is supported by strong consumer adoption, with 39% of Japanese households regularly purchasing groceries online. Major retailers are investing in temperature-controlled delivery infrastructure and implementing sophisticated inventory management systems to ensure product freshness and availability across both physical and digital channels.
Consumer preferences in Japan's dairy food market are increasingly influenced by convenience and accessibility factors. Convenience stores have emerged as the second-largest distribution channel, experiencing a 3.5% growth in dairy product sales in 2022. These stores are strategically positioned in high-traffic locations and operate with extended hours, making them ideal for busy urban consumers seeking ready-to-consume dairy products. The foodservice sector is also playing a crucial role, with approximately 23% of consumers dining out two to three times monthly, driving demand for dairy ingredients in restaurant chains and cafes.
The market is witnessing a significant shift in product merchandising and retail presentation strategies. Traditional dairy retailers are evolving into specialized boutique stores, offering premium and artisanal products to cater to discerning consumers. Major retail chains are expanding their private label offerings while simultaneously creating dedicated spaces for premium international brands. This dual approach allows retailers to capture both value-conscious consumers and premium segment customers. The integration of digital payment solutions and loyalty programs is further enhancing the shopping experience, with retailers leveraging consumer data to optimize product placement and promotional strategies.
Japan Dairy Market Trends and Insights
The rising demand for baked foods, like pizza, baked macaroni with mortadella, and other cheese-based products, is boosting the demand for cheese in the country
- Fresh milk in Japan has become popular over the decades due to the growing Japanese dairy farming industry and increased imports of dairy products. In 2021, the annual per capita expenditure on milk products in Japan amounted to USD 39 on average.
- The rising demand for baked foods, including pizza, baked macaroni with mortadella, and other cheese-based products, is boosting the demand for cheese in the country. While still well below the European average, Japan's per capita cheese consumption increased in the past few years. In 2020, the production volume of cheese in Japan reached around 165 thousand metric tons. Processed cheeses account for most cheese product sales in Japan, with a small share attributable to natural cheeses. The main origins of foreign cheese sold in Japan are the United States, New Zealand, Australia, and Europe. Home baking has gained popularity in recent years, with butter as an important ingredient. Female consumers aged 26-40 years accounted for approximately 94% of the home baking population. In 2021, the annual per capita expenditure on butter in Japan amounted to nearly USD 3.5 on average, while it was USD 2.6 in 2017.
- Ice cream is considered one of the most popular sweet treats among the Japanese population. The most sold ice cream type in Japan was family-sized multipacks, followed by ice cream served in paper cups, whereas vanilla ice cream was rated the most popular flavor in 2022. There is a strong demand for dairy products from the on-trade industry, especially from cafes. On average, almost three-quarters of Japanese people drink coffee daily. Starbucks, Doutor Coffee, Komeda Coffee, and Tulley's Coffee are the four major coffee chains in Japan.
OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- The country's government is actively accelerating its butter production
- The growth in milk production is associated with the rising number of cows.
- Cheese production impacted due to the increased raw milk production in the country
Segment Analysis: Category
Yogurt Segment in Japan Dairy Market
Yogurt continues to dominate the Japan Dairy Market, holding approximately 35% market share in 2024, making it the largest segment. The segment's strong position is driven by the increasing consumer preference for functional dairy products with health benefits. Japanese consumers are particularly drawn to yogurt products fortified with probiotics and those offering digestive health benefits. Major companies, including Meiji Group, Morinaga Milk, and Megmilk, have introduced a wide range of yogurt-based products, including drinks, desserts, and snacks, to cater to the growing demand. The segment's growth is further supported by the rising trend of yogurt consumption during breakfast, with over 48% of Japanese consumers incorporating yogurt into their morning routine.
Milk Segment in Japan Dairy Market
The milk segment is projected to be the fastest-growing category in the Japan Dairy Market, with an anticipated CAGR of approximately 5% during 2024-2029. This growth is primarily driven by increasing milk production capacity and expanding herd size on Japanese dairy farms. The Government of Japan's support through various programs to improve livestock and milk production has been instrumental in driving this growth. The segment's expansion is further supported by rising consumer awareness about the nutritional benefits of milk and its growing application in various food and beverage products. The introduction of innovative products such as fortified milk and specialized dairy beverages is expected to maintain this growth momentum through 2029.
Remaining Segments in Category
The Japanese dairy market's other significant segments include cheese, dairy desserts, cream, and butter, each serving distinct consumer needs and preferences. The cheese segment has gained prominence due to the increasing westernization of food habits and the growing popularity of cheese-based dishes. Dairy desserts have carved out a significant niche, particularly in urban areas, driven by innovation in flavors and formats. The cream segment maintains steady growth through its essential role in both household cooking and commercial food preparation. The butter segment, while smaller, remains crucial for the bakery and confectionery industries, with both cultured and uncultured variants serving different market needs.
Segment Analysis: Distribution Channel
Off-Trade Segment in Japan Dairy Market
The off-trade segment dominates the Japan Dairy Market, commanding approximately 71% market share in 2024, driven by the extensive network of supermarkets, hypermarkets, convenience stores, and online retail channels. Supermarkets and hypermarkets account for the largest share within off-trade channels, offering a wide selection of brands, considerable shelf space, and frequent price promotions. The segment's growth is further accelerated by the rising adoption of online grocery shopping, with about 39% of Japanese households purchasing groceries online. The expansion of e-commerce platforms like Aeon Supermarket, Amazon Fresh, and Life Supermarket has significantly contributed to the segment's dominance. The off-trade segment is expected to maintain its leading position with a projected growth rate of around 4% during 2024-2029, supported by technological advancements in retail operations and the increasing consumer preference for convenient shopping experiences.
On-Trade Segment in Japan Dairy Market
The on-trade segment plays a vital role in the Japanese dairy food market through foodservice channels, restaurants, cafes, and other food establishments. This segment has shown steady growth driven by the increasing popularity of eating out among Japanese consumers and the rising consumption of dairy products in restaurants and cafes. Major quick-service restaurants like Starbucks, Doutor Coffee, KFC, and McDonald's significantly contribute to on-trade dairy sales, with McDonald's operating over 2,900 outlets and Starbucks having more than 1,600 locations across Japan. The segment particularly benefits from the extensive use of cheese in various cuisines and the growing demand for dairy desserts in foodservice establishments. The channel's growth is further supported by the expanding coffee culture and the increasing incorporation of dairy products in various menu items, making it an essential distribution channel for dairy manufacturers in Japan.
Competitive Landscape
Top Companies in Japan Dairy Market
The dairy market in Japan is characterized by companies focusing heavily on product innovation and operational excellence to maintain their competitive positions. Major players in the Japanese dairy industry are actively expanding their product portfolios through new launches targeting health-conscious consumers, particularly in yogurt and functional dairy products segments. Companies are strengthening their distribution networks and implementing advanced quality control systems across their manufacturing facilities to ensure product safety and consistency. Strategic partnerships with local dairy farmers and investments in R&D capabilities are becoming increasingly common to secure raw material supply and drive innovation. Additionally, manufacturers are expanding their presence in international markets, particularly in other Asian countries, while simultaneously strengthening their domestic operations through facility modernization and capacity expansion.
Local Players Dominate Consolidated Market Structure
The Japanese dairy market exhibits a relatively consolidated structure dominated by established domestic players with deep-rooted distribution networks and strong brand recognition. Companies like Meiji Holdings, Megmilk Snow Brand, and Morinaga Milk Industry have maintained their market leadership through decades of operational experience and strong relationships with local dairy farmers. These domestic players benefit from their understanding of local consumer preferences and established procurement networks, particularly in regions like Hokkaido, which serves as the country's primary dairy production hub.
The market is characterized by a mix of diversified conglomerates and dairy specialists, with many leading players operating multiple business segments beyond dairy products. While international players maintain a presence in the market, they often operate through joint ventures or partnerships with local companies to navigate the unique characteristics of the Japanese market. The industry has witnessed selective merger and acquisition activities, primarily focused on strengthening existing market positions and expanding product portfolios rather than significant market consolidation.
Innovation and Distribution Key to Growth
Success in the Japanese dairy market increasingly depends on companies' ability to innovate while maintaining operational efficiency and product quality. Incumbents must focus on developing premium and functional dairy products that align with evolving consumer health preferences while maintaining competitive pricing strategies. Companies need to invest in advanced manufacturing technologies and sustainable practices to meet growing environmental concerns and regulatory requirements. Additionally, strengthening direct-to-consumer channels and expanding presence in convenience stores and specialty retail outlets has become crucial for maintaining market share.
For new entrants and smaller players, establishing strong relationships with local dairy farmers and developing niche product offerings in growing segments like functional yogurt and premium cheese presents opportunities for growth. Companies must also focus on building efficient cold chain logistics networks and implementing digital transformation initiatives to improve operational efficiency. The ability to adapt to changing regulatory requirements, particularly regarding food safety and labeling, while maintaining product quality and competitive pricing, will be crucial for long-term success. Furthermore, developing strong brand identities focused on health, wellness, and sustainability will be essential for capturing market share in an increasingly health-conscious consumer environment.
Japan Dairy Industry Leaders
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Danone SA
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Megmilk Snow Brand Co. Ltd
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Meiji Dairies Corporation
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Morinaga Milk Industry Co. Ltd
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Yakult Honsha Co. Ltd
- *Disclaimer: Major Players sorted in no particular order
Recent Industry Developments
- August 2021: Meiji launched a new culture of drinking yogurt with a combination of sakura and lychee flavors. This Japanese-inspired culture-drinking yogurt comes in a 155 ml bottle and is available at 7-Eleven stores in Japan.
- July 2021: Yakult Honsha Co. Ltd launched the fermented milk drinks Yakult 400 and Yakult 1000 nationwide (Japan).
- February 2021: Morinaga Milk Industry, the Japan-based dairy group, expanded its business in Vietnam by acquiring local player Elovi Vietnam. Elovi is engaged in the local manufacture of beverage and yogurt products.
Japan Dairy Market Report Scope
Butter, Cheese, Cream, Dairy Desserts, Milk, Yogurt are covered as segments by Category. Off-Trade, On-Trade are covered as segments by Distribution Channel.| Butter | By Product Type | Cultured Butter |
| Uncultured Butter | ||
| Cheese | By Product Type | Natural Cheese |
| Processed Cheese | ||
| Cream | By Product Type | Double Cream |
| Single Cream | ||
| Whipping Cream | ||
| Others | ||
| Dairy Desserts | By Product Type | Cheesecakes |
| Frozen Desserts | ||
| Ice Cream | ||
| Mousses | ||
| Others | ||
| Milk | By Product Type | Condensed milk |
| Flavored Milk | ||
| Fresh Milk | ||
| Powdered Milk | ||
| UHT Milk | ||
| Yogurt | By Product Type | Flavored Yogurt |
| Unflavored Yogurt |
| Off-Trade | Convenience Stores |
| Online Retail | |
| Specialist Retailers | |
| Supermarkets and Hypermarkets | |
| Others (Warehouse clubs, gas stations, etc.) | |
| On-Trade |
| Category | Butter | By Product Type | Cultured Butter |
| Uncultured Butter | |||
| Cheese | By Product Type | Natural Cheese | |
| Processed Cheese | |||
| Cream | By Product Type | Double Cream | |
| Single Cream | |||
| Whipping Cream | |||
| Others | |||
| Dairy Desserts | By Product Type | Cheesecakes | |
| Frozen Desserts | |||
| Ice Cream | |||
| Mousses | |||
| Others | |||
| Milk | By Product Type | Condensed milk | |
| Flavored Milk | |||
| Fresh Milk | |||
| Powdered Milk | |||
| UHT Milk | |||
| Yogurt | By Product Type | Flavored Yogurt | |
| Unflavored Yogurt | |||
| Distribution Channel | Off-Trade | Convenience Stores | |
| Online Retail | |||
| Specialist Retailers | |||
| Supermarkets and Hypermarkets | |||
| Others (Warehouse clubs, gas stations, etc.) | |||
| On-Trade | |||
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. |
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
