Japan Dairy - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Japan Dairy Market size is estimated at USD 31.34 billion in 2024, and is expected to reach USD 38.68 billion by 2029, growing at a CAGR of 4.30% during the forecast period (2024-2029).

Strong penetration of organized retail channels is fueling the market growth

• Dairy products are primarily sold through the off-trade retail channel in Japan. Supermarkets and hypermarkets account for the largest market share among off-trade channels, as they provide the added advantage of influencing the consumer's decision to purchase from a large variety of dairy products available in the market. As a result, this channel is considered the primary sales channel for dairy products, holding more than 62% of overall sales across the country.
• In Japan, convenience stores stand second in the sales of dairy products, behind supermarkets and hypermarkets. In 2022, the sales value of dairy products through convenience stores increased by 3.5% compared to 2021. Many convenience stores in Japan stay open longer than traditional retail stores, resulting in more time for the company's products to be sold.
• Dairy products are commonly used in authentic Japanese restaurants and foodservice channels, further boosting the market's growth. Major fast-food chains in Japan add milk, yogurt, and cheese to their menus. Dairy sales through the on-trade channel are anticipated to grow by 9.6% in 2025 compared to 2022. The growth may be aided by consumers preferring dining out or ordering takeout. As of 2021, 23% of consumers said they dined out about two to three times per month.
• Compared to other dairy products, yogurt accounted for the majority share in all retail channels. In 2022, yogurt accounted for 35% of the total category, and milk was in second place with 24.6% of the value share.

Japan Dairy Market Trends

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.

Japan Dairy Industry Overview

The Japan Dairy Market is fragmented, with the top five companies occupying 34.86%. The major players in this market are Danone SA, Megmilk Snow Brand Co. Ltd, Meiji Dairies Corporation, Morinaga Milk Industry Co. Ltd and Yakult Honsha Co. Ltd (sorted alphabetically).

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