Butter Market Forecast: Trends, Size, and {3.1%} CAGR to 2028

February 20, 2025

The global butter market is a dynamic and evolving sector within the dairy industry, experiencing steady growth over the years. According to the TechSci Research report, the market was valued at USD 53.65 billion in 2022 and is projected to grow at a CAGR of 3.1% from 2024 to 2028.

This report examines the current state, key trends, challenges, and future opportunities in the global butter market.

Historical Significance of Butter

Butter has played a crucial role in human culinary traditions for thousands of years. Historically, various cultures have used butter in different forms, such as clarified butter (ghee) in India and compound butter in Western cuisines. The fundamental process of butter production involves churning cream to separate milk fats, resulting in a rich, creamy product used in numerous cooking and baking applications.

Butter Market Drivers

Increasing Preference for Natural Foods

Consumers are increasingly favoring natural and minimally processed foods. Butter, perceived as a more natural alternative to margarine and other spreads, has seen a resurgence in demand.

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Shifting Perceptions of Dairy Fats

Recent research suggests that dairy fats, when consumed in moderation, may offer health benefits. This shift in perception has contributed to the rising demand for butter worldwide.

Versatility in Culinary Applications

Butter remains a fundamental ingredient in cooking and baking, enhancing flavors and textures in a wide range of dishes. The rise of food-related television programs and social media content has further fueled consumer interest in high-quality butter products.

Expansion of the Food Service Industry

The growth of the food service industry, including restaurants, bakeries, and cafes, has led to increased butter consumption. Butter's use in gourmet dishes and pastries has strengthened its position in the market.

Challenges Facing the Butter Market

Health Concerns

Although butter has regained favor, its high saturated fat content continues to be a concern for health-conscious consumers. Manufacturers have responded by introducing organic and grass-fed butter options.

Competition from Butter Substitutes

Margarine and plant-based alternatives continue to challenge butter's market position. Innovations in dairy-free spreads pose a significant threat to traditional butter sales.

Fluctuating Dairy Prices

The cost of dairy products, including butter, fluctuates due to varying milk production rates, feed costs, and global supply chain disruptions. These factors affect pricing and overall market stability.

Environmental and Sustainability Concerns

Dairy production has a significant environmental impact, including greenhouse gas emissions and resource consumption. Companies are increasingly focusing on sustainable sourcing and production methods to address these concerns.

Butter Market Segmentations

By Type

Cultured Butter – European-style butter produced through fermentation, providing a distinct flavor.

Uncultured Butter – Traditional butter made without fermentation.

Others – Includes specialty and flavored butter catering to niche markets.

By Sales Channel

Hypermarkets/Supermarkets – Major retail outlets dominate butter sales.

Convenience Stores – Smaller stores provide quick access to butter products.

Online – E-commerce platforms are expanding the market reach.

Others – Includes direct-to-consumer models and specialty stores.

By Region

North America – The United States, Canada, and Mexico remain strong markets.

Europe – Countries like France, Germany, and the United Kingdom have a high butter consumption rate.

Asia-Pacific – Emerging markets in China, Japan, and India show increasing demand.

Middle East & Africa – Growth in premium butter products is observed in this region.

South America – Brazil, Argentina, and Colombia contribute to market expansion.

Major companies operating in the Global Butter Market are:

Lactalis International
Fonterra Co-operative Group
Ornua Co-operative Limited
Organic Valley
Dairy Farmers of America, Inc.
Amul Dairy
Meadow Foods Ltd.
Arla Foods
MS Iceland Dairies
Muller

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Recent Developments in the Butter Market

Land O'Lakes introduced a new European-style butter line in September 2023, featuring pasture-raised cream.

Kerrygold launched a 16-ounce Salted Butter Tub in August 2023, catering to high-usage consumers such as bakers and chefs.

Future Trends and Opportunities

Growing Demand for Specialty and Artisanal Butter

Consumers are increasingly seeking premium and artisanal butter products, including organic and flavored varieties. This trend presents an opportunity for market expansion.

Rising Popularity of Online Sales Channels

The shift toward online shopping has opened new distribution avenues for butter producers. Companies investing in e-commerce platforms are likely to see increased sales.

Sustainable and Ethical Sourcing

As environmental concerns grow, brands focusing on sustainability and ethical dairy farming practices are gaining consumer trust and loyalty.

Expansion in Emerging Markets

Rising disposable incomes in developing regions, coupled with changing dietary preferences, are fueling butter consumption outside traditional markets.

Conclusion

The global butter market is poised for steady growth, driven by increasing consumer demand for natural products, evolving culinary trends, and expanding food service industries.

Despite challenges such as health concerns and competition from substitutes, the market continues to offer significant opportunities for innovation and expansion. With a focus on sustainability, premium product offerings, and enhanced distribution channels, the butter industry is well-positioned for future success.