Organic Milk Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Organic Milk Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The organic milk market is projected to register a CAGR of 6.21% during the forecast period, 2022-2027.

The organic milk market is witnessing significant growth and will grow steadily in the next few years owing to the changing consumer preference for the consumption of organic and natural food and beverage products. Moreover, the COVID-19 pandemic has caused an alteration in the food habits of consumers and they are more inclined toward healthy foods to strengthen their immune function. According to the Organic Trade Association (OTA), organic food sales in the United States increased by 13% with a value of USD 56.5 billion in 2020. As a result, the demand for organic milk has increased during the pandemic period owing to the health benefits its offers and hence boosting the market growth.

Further, the Government initiatives to encourage organic dairy farming by launching educational campaigns and offering technical and financial assistance are expected to create lucrative opportunities for market expansion in the coming years. For instance, the United States Department of Agriculture (USDA) unveiled an additional investment of USD 80 million in the Dairy Business Innovation (DBI) initiatives. Similarly, USDA published the Origin of Livestock (OOL) final rule of organic dairy to promote a fair and more competitive market for all organic dairy producers. Therefore, government assistance in organic dairy farming is anticipated to fuel the growth of organic milk in the market. Furthermore, the technological advancement for formulating innovative organic milk products with low fat and sugar content is expected to drive market growth in the forecast period.

However, the high cost associated with organic dairy farming has impacted the net price of organic milk. Hence, the cost of organic milk is much higher than conventional milk. As a result, it restrains the market growth. Additionally, the stringent government regulation on organic feed imposed for organic dairy cows acts as a hampering factor for market growth.

Key Market TrendsGrowing Demand for Non-GMO & Clean Label Products

In recent years, the demand for clean-label dairy products has been growing owing to the increasing nutritional awareness among the population. Furthermore, the clean label dairy products are free from artificial and preservatives which in turn raises the need for organic milk in the market. On the other hand, the growing vegan population across the globe is raising the demand for plant-based organic milk products. In addition, the free-from allergen is one of the top free-from claims favored by consumers, pushing manufacturers of organic milk to introduce new products in the market. For instance, in December 2021, PlantBaby, a nutrition brand in Hawaii launched Kiki Milk which is certified organic, clean label, and dairy-free milk designed to meet the nutritional needs of growing children. Additionally, many start-ups are paving their way in the emerging organic dairy market to cater to the increasing demand for organic milk. For instance, Akshayakalpa Organic, the Indian organic dairy enterprise announced in September 2022 that it has secured USD 15 million in a Series B funding round which will be utilized for the business expansion across Chennai, Hyderabad, and Bengaluru markets.

North America stands out as the Largest Market

North America is leading the global market for organic milk as the consumers in the region are increasingly opting for organic dairy products including milk. According to the government of Canada, the production of certified organic milk has increased from 1,436.4 million liters in 2020 to 1,484.7 million liters in 2021. Similarly, the sales of organic milk in the United States have been increasing rapidly with a value of 2.56 billion pounds in 2021, based on the market study. Thereby, the increasing production rate of organic milk in the region is anticipated to drive market growth over the forecast period. Further, consumers can access a wide assortment of products marketed by private labels as well as global dairy food companies at their convenience across offline and online stores. Additionally, key brands are accelerating their product launch efforts to fulfill the growing consumer requirements for organic milk, which is anticipated to enhance retail sales during the forecast period. For instance, in May 2021, Natrel, an organic dairy producer in Toronto unveiled the launch of 10 percent half & half cream organic milk in the market.

Competitive Landscape

The global organic milk market is competitive in nature owing to the presence of global and regional players. Major players in the market studied include the Danone Group, Nestle SA, Fonterra Co-operative Group Limited, and Groupe Lactalis SA, among others. With the increasing need for organic milk, the companies are focusing on product innovations and collaboration with other players to develop their presence and increase market share across untapped markets. For instance, in October 2021, Organic Meadow partnered with Elopak to launch organic milk in the carbon-neutral carton in the North American region.

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