PHILIPPINES DAIRY MARKET

Philippines dairy market is forecast to see a steady CAGR 3.5% between 2025 and 2032 fueled by increasing dairy consumption and changing lifestyles along with supportive government initiatives.

Major Market Drivers and Emerging Trends

Rapid urbanization is driving lifestyle changes which drives more consumers to choose convenient dairy options. World Bank data shows that urban residents made up 48.29% of the total population in the Philippines in 2023. Higher income levels and a strong preference for convenient food choices make dairy products particularly appealing to urban consumers.

According to FAS Manila, dairy products demand is expected to grow by 3% which reaches 3.5 million MT in LME despite high prices limiting growth. The Philippines depends on imports for 99% of its dairy supply because local production cannot keep up with the demand. With rising local demand the country imports approximately 110,000 MT of dairy products annually. The imports include cheese and milk powder among others sourced primarily from Australia along with New Zealand and the US.

The growing food service industry which has greatly raised demand for milk and coffee, is another factor driving the demand for dairy products. The Philippines has one of the highest rates of coffee consumption in Asia with 80% of the population consuming about two and a half cups daily. With more coffee shops opening in Metro Manila along with other urban regions, the need for fresh milk is steadily growing.

The other factor supporting the Philippines dairy market size is government initiatives to promote domestic production. National health guidelines advise that children between one and six years old consume milk at least one glass each day. The National Dairy Authority or NDA is tasked with managing and fostering the dairy market growth. The NDA is focused on boosting dairy livestock improvement along with milk production. It also encourages milk consumption and aids the dairy sector with technical support.

The NDA places a strong emphasis on raising the dairy cattle population with each animal producing an average of ten liters of milk daily. Another priority is enhancing milk yields through optimal feeding and ensuring cow comfort. Providing farmers with essential knowledge is important to mitigating risks associated with dairy farming and reducing animal fatalities. The comprehensive capacity building initiatives by the NDA will equip farmers with the knowledge to minimize animal deaths and prolong the productive lifespan among the livestock. A National Dairy Campaign will also be launched by the NDA to raise awareness about the nutritional advantages provided by milk particularly for children and pregnant women.

The Philippines has an estimated 615,000 dairy cows which highlights its dedication to increasing herd sizes to support the growing milk consumption. It processes milk of around 23.5 million liters each year which reflects the effective partnership between private plants and cooperatives to improve milk production. Advanced technologies like embryo transfer are being deployed by dairy farmers to increase productivity. Farmers are also enhancing local herds and increasing dairy cattle numbers by artificially inseminating them with purebred Holstein Friesian genetic material.

However there is a growing trend towards plant based protein options like soy. Non dairy cheese options for vegans are also forecast to become popular. Dairy free ice cream is further gaining popularity owing to ongoing innovations and product development. This involves the new flavors launching along with products designed to cater to consumers with particular dietary needs. While this development is beneficial it could potentially hinder the dairy market growth.

Based on product type the milk segment is growing owing to the rising need for nutritious dairy products fueled by growing health awareness and the expanding middle class. There is a rising demand among Filipino consumers for dairy products which provide extra health advantages which aligns with wider wellness trends. There is also a rising demand for the cheese segment. Annually the Philippines produces roughly 1,500 MT of cheese which reflects a growing momentum in production. The homegrown and artisanal cheese industries are expanding driven by demand in domestic and export markets. In many households, butter is a popular kitchen staple that is used extensively in baking and daily cooking.

Based on distribution channel offline retail channels like convenience stores or supermarkets account for the majority of drinking milk sales. Customers are also using e-commerce sites like Lazada and Shopee owing to their extensive inventory and frequent discounts. Moreover tech advancements like smart carts that auto scan items along with smart lockers that offer convenient delivery and return options are helping fuel the segment growth.

Top Market Players

Several prominent companies are Nestle, Yakult, Alaska Milk Corporation, San Miguel Food and Beverage among others. Major dairy companies continuously dedicate resources to development efforts to develop new dairy offerings that meet shifting consumer preferences.

Key Developments

• • In 2025, the NDA entered into an Mou with the French firm Phylum. The MoU aims to enhance collaboration between France and the Philippines by conducting a preliminary study to determine the potential success in the Philippine Dairy Project.

Segments covered in the Report:

The Philippines Dairy Market has been segmented based on product type and distribution channel. Based on product type, the market is segmented into milk, cheese, butter, dairy desserts, yogurt, and others. Based on distribution channel, the market is segmented into supermarkets/hypermarkets, convenience stores, specialist retailers, online retail stores, and others.

Market Segmentation

Philippines Dairy Market by Product Type

• • Milk
  • Cheese
  • Butter
  • Dairy desserts
  • Yogurt
  • Others

Philippines Dairy Market by Distribution Channel

• • Supermarkets/Hypermarkets
  • Convenience stores
  • Specialist retailers
  • Online retail stores
  • Others

Philippines Dairy Market Leading players

• • Nestle
  • Yakult
  • Alaska Milk Corporation
  • San Miguel Food and Beverage