Philippines Dairy Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2025-2034)

The Philippines dairy market size attained a value of USD 1.44 billion in 2024. The market is estimated to grow at a CAGR of 4.30% during 2025-2034 to reach a value of USD 2.20 billion by 2034. The market is driven by rising consumer demand for dairy products, an expanding food service sector, and rising governmental support to expand dairy production.

Philippines Dairy Market Overview

In 2023, the Philippine Statistics Authority (PSA) reported the country's dairy cattle inventory (female dairy animals only) at 9,730 head, alongside 7,240 buffalo and 14,908 goats. The number of dairy goats is growing, driven by increased imports. In contrast, the dairy cattle herd has been declining due to the replacement of aging animals and the slaughter of cows for meat. The temperate breeds of dairy cattle that are successfully raised in the Philippines include Holstein Freisen, Jersey and Brown Swiss.

Figure: Number of Dairy Animals in Philippines, 2018-2024

The National Dairy Authority (NDA) is the primary agency of the Philippine Department of Agriculture (DA) responsible for overseeing and supporting the development of the Philippines dairy market. The NDA aims to accelerate dairy herd development and milk production, expand the reach of school feeding programs, promote milk consumption, and foster the growth of the dairy industry through the provision of technical services.

The locally produced fresh milk classified as ready-to-drink milk (RTD) has inherent competitive advantages against the imported RTD in the fresh milk market. The market for RTD grows as a result of RA 11037 and RA 11148, requiring investment in the Milk Feeding Program (MFP) among preschoolers and malnourished school children. The Department of Education (DepEd) prioritises local dairy products in the school feeding program. Around 60% of the local fresh milk production goes to this program and the rest to local commercial sales or household consumption.

Figure: Milk Supplied by FCAs to Beneficiaries (Millions) under the DepEd School-based Feeding Program (SBFP), SY* 2019-2024

The Philippines’ self-sufficiency of milk is very low compared (less than 5%) to its demand for dairy products, which leads the country to import most of its requirements. Major suppliers of dairy products in the Philippines dairy market are Nestlé Philippines, Alaska Milk Corporation, and Fonterra Brands Philippines.

In 2024, production will rise to 29,000 MT, supported by an increase in the dairy herd and the active implementation of the government’s dairy development projects. As per 2023 report, Cow’s milk production represents around 60% share of total milk production in the Philippines.

Figure: Milk Production in Thousand MT (LME) in the Philippines, 2019-2024 (E)

Philippines Dairy Market Growth

The dining out trend in countries such as China, Japan, and India expand the foodservice sector, aiding the demand for dairy products. In 2022, China was the largest market globally for food and beverages, with a value of USD 178.3 billion. India is the largest milk producer globally. According to the FAO, in FY 2022-23, India’s milk production reached about 230.58 million tonnes from 187.30 million in 2018-19. According to 2024 data, India’s dairy sector boasts 22 Milk Federations/Apex Bodies, 240 district cooperative milk unions, 28 marketing dairies, and 24 milk producer organizations.

As per the Philippines dairy market report, the popularity of ice cream with distinct flavours such as pandan, green tea, lychee, and plum wine, are gaining momentum in Asia. China is a leading ice cream producer. According to 2024 data, there are 7,205 ice cream shops in China. Cheese is a key product in Australia's dairy sector, using over a third of the country's milk. In 2024, cheese production is projected to reach 435,000 tons, driven by higher milk supplies and strong profitability. Some leading cheese producers in Australia include L’artisan cheese, Milawa Cheese Company, and Woodside Cheese.

Key Trends and Developments

Rising health awareness, significant government support, and growing food service sector drive Philippines dairy market growth.

September 2024

National Dairy Authority (NDA) laid out strategies to enhance the Philippines dairy industry. The authority aims to increase milk yields and provide training for farmers. The strategy aims to improve the local milk market share by collaborating with the commercial sector and local milk producers to ensure the absorption of a specified portion of domestically produced milk, in alignment with Section 17 of RA 7884. In the proposed 2020-2025 Dairy Road Map, the Manila region aims to increase the country’s dairy input to provide milk locally, in particular to Filipino children.

August 2024

Meiji (China) Investment Co. launched a drinking yogurt made from a proprietary lactobacillus found in Tokachi, Hokkaido's raw milk. The products include Meiji Hokkaido Flavour Yogurt and Meiji Hokkaido Flavour Yogurt Melon.

July 2024

Metro Pacific Agro Ventures (MPAV), a subsidiary of Metro Pacific Investments Corporation (MPIC), has acquired Universal Harvester Dairy Farms, Inc. (UHDFI), known as Bukidnon Milk Company, for over PHP 700 million. This strategic move aims to enhance MPAV's dairy operations and support nationwide food security. Bukidnon Milk Company operates a state-of-the-art dairy facility in Maramag, Bukidnon, producing fresh milk, flavored milk, yogurt, and cheese. It is a major supplier for the National Dairy Authority’s Milk Feeding Program, ensuring schoolchildren have access to high-quality fresh milk.

July 2023

Malaysian dairy company Farm Fresh Berhad is working with the Philippines government for its planned investment of USD20 million for cattle breeding intended for milk production and is looking for 200 to 400 hectares of land available for lease. This will significantly support the Philippines dairy market development.

A growing food service sector aids the demand for dairy products

The growth of the food service sector has resulted in higher consumption of pizzas, burgers, coffee, and tea. This is driving the demand for dairy products such as cheese, ice cream, and milk. As per 2024 data, Philippines is the second-largest coffee consumer in Asia, with 80% of Filipinos drinking an average of 2.5 cups per day. The rising urbanisation and increasing income of population are catering to the growth of the food service sector in the Philippines, thereby supporting the Philippines dairy market value. According to December 2024 report, the Philippines has 49,629 restaurants, representing an increase of 4.43% from 2023. In the Calabarzon region, the coffee shop market represents the largest demand for fresh milk. To meet the growing needs of this market, milk from areas such as Bulacan, Nueva Ecija, Bukidnon, and other parts of Mindanao is also sourced and supplied by processors and traders in Batangas. The increasing number of coffee shops in Metro Manila and other urban areas drives this rising demand for fresh milk.

Dairy Industry Roadmap 2020-2025 of Philippines dairy market

This roadmap outlines strategies, policies, budgetary requirements, implementation plans, and post-implementation programs, applicable to a range of industry stakeholders, from smallholder farms to large-scale dairy producers. As outlined in the Roadmap, the Philippines is projected to increase its cattle herd by 4,000 annually from 2021 to 2025, following an addition of 300 cattle in 2020, bringing the total to 20,300 cattle.

Adoption of modern technologies to boost dairy production

As per the Philippines dairy market analysis, dairy farmers in the Philippines are enhancing productivity by deploying advanced technologies. These technologies include embryo transfer and sexed semen with slick genes. Further, by artificially inseminating local cattle with 100% purebred Holstein-Friesian semen, farmers are upgrading local herds and increasing dairy animal numbers.

Significant presence of retail channels supporting the Philippines dairy market

The majority of the Philippines' drinking milk market, including powdered milk, is primarily distributed through offline retail channels such as grocery stores. However, online marketplaces like Shopee and Lazada are also gaining popularity among consumers due to their wide product selection and reputation for offering special deals and promotions. Additionally, technological innovations such as smart carts, which automatically scan items as customers place them in their shopping carts, and self-service smart lockers, which allow for convenient pickup or drop-off of delivery items, are further driving the growth of the sector.

Philippines Dairy Market Trends

The rising incomes and growing middle class population in Philippines is fueling growth in spending for household goods and dairy products such as milk, cheese and yoghurt. The Philippines aims to become a predominantly middle-class society, free of poverty, by 2040. It is estimated that, the household goods spending in the Philippines will witness a CAGR of 7.1% from 2024-2028, significantly supporting the Philippines dairy market development.

The Philippines, located in Southeast Asia, is gaining recognition in the global dairy industry. As per 2024 statistics, the Philippines has the presence of approximately 615,000 dairy cattle. There is a growing demand for dairy products including milk and cheese among the population with the rise in health consciousness. The national recommendation for milk consumption in the Philippines suggests that children aged one to six years should consume at least one glass of milk or a milk-based product per day.

Philippines Dairy Market Restraints

The Philippines is witnessing a strong inclination towards vegan and plant-based protein sources, such as soy. Non-dairy cheese alternatives suitable for vegans are expected to gain popularity in the Philippines. Currently considered a niche product, plant-based cheese has significant potential to become more mainstream in the coming years. Dairy-free ice cream is gaining traction amidst new product development and innovations. This includes the introduction of new flavours and formats, as well as products tailored to meet the needs of consumers with specific dietary requirements, such as those seeking dairy-free options.

As per 2021 data, the majority of the dairy farmers in the Cagayan Valley belonged to the aged group, with an average age of 54 and above. Additionally, as per 2023 records, the average age of Filipino farmers ranges from 55 years old to 59 years old, which would create a critical shortage of farmers in the upcoming 10 to 12 years, and hamper the Philippines dairy market growth.

Philippines Dairy Industry Segmentation

“Philippines Dairy Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

On the basis of product, the market can be divided into the following:

• Fluid/UHT/Flavoured Milk
• Cream
• Butter
• Anhydrous Milk Fat (AMF)
• Skimmed Milk Powder/Non-Fat Dry Milk
• Whole Milk Powder
• Whey Protein (Powder and Concentrate)
• Lactose
• Casein
• Cheese
• Yoghurt
• Ice-Cream
• Others

Philippines Dairy Market Share

By Product Analysis

The expanding Milk Feeding Program and the food service sector aids the demand for liquid RTD milk. Further, the demand for imported ultra-heat treated (UHT) milk is increasing due to its distinctive taste and longer shelf life, boosting the Philippines dairy market. Philippines imports UHT milk from countries including New Zealand, the USA, and Australia. According to USDA 2024 data, the Philippines average milk production is 10 liters/day for dairy cows, 4.5 litres/day for buffalo, and 1.5 litres/day for goats. In June 2023, the NDA announced its plans to boost local milk production by 500%, equivalent to 800 million liters within five years.

Fresh cream contains a significant amount of Vitamin B2, calcium and phosphorus, increasing its adoption among health-conscious individuals. While light creams are used in desserts and coffee, the heavier creams are whipped or used to thicken sauces. As per Philippines dairy market analysis, in 2022, the Philippines baking industry spent around USD 1.5 billion on ingredients, with 77% imported.

Butter is a staple pantry item in Filipino households, frequently used in both home cooking and baking. In December 2024, Japan’s Butter Butler, officially opened its first store in the Philippines. The company is renowned for its butter-centric pastries that are expected to gain the attention of Filipino dessert enthusiasts and expand the demand for butter.

Anhydrous Milk Fat (AMF) is made from 35-45% butter or cream. AMF is a good source of essential nutrients including vitamins A, D, E, and K, contains conjugated linoleic acid (CLA), promotes weight loss, boosts brain function, and supports heart health. AMF is a crucial for the food industry due to its longer shelf life. In 2022, limited-service restaurants held a 55% share of the consumer food service sector, followed by full-service restaurants (17%), street stalls/kiosks (15%), and cafés and bars (13%), thus boosting the Philippines dairy market.

Skimmed milk powder has the same nutritional content as liquid milk. Its lightweight nature and easy storage make it a convenient choice for travel and for situations where fresh milk is unavailable. The USA and New Zealand are the major suppliers of SMP to the Philippines. Due to its longer shelf life, skimmed milk powder is widely adopted in the commercial food and beverages sector. According to 2023 data, the Philippine’s food and beverage sector contributes around 23-24% of the country’s GDP.

Whole milk powder is produced by spray-drying pasteurised milk and contains 26%-40% milk fat (by weight). It retains the full nutritional value of milk in a dry form. Whole milk powder plays an important role in the manufacture of a wide range of food and reconstituted dairy products such as yoghurt and milk drinks.

The increasing awareness on the importance of protein in weight management and overall wellness drive the demand for whey protein. In 2022, whey protein imports increased to USD 111 million. The incorporation of protein-rich ingredients in product formulations among food manufacturers has increased the demand for whey protein. The development of innovative products such as flavoured, fortified and low-lactose whey proteins, further aids the Philippines dairy market growth.

The amount of lactose in dairy foods varies between products, ranging from 15g in a cup of milk to virtually zero in hard or mature cheeses. Lactose monohydrate is used as a sweetener or stabiliser in packaged foods, baked goods, and infant formulas. In 2022, the Philippines held a 0.6% market share in the global packaged food market, with a total value of USD 16.5 billion.

Cow's milk consists of around 80% casein protein. Generally, 1 ounce of cheddar or mozzarella cheese has more than 5 grams of casein. In addition to milk and cheese, casein protein is found in yogurt, and infant formulas, as well as in a variety of bakery products. According to USDA, by 2027, the Philippines baking industry’s retail sales are expected to grow 5% a year, reaching a total value of USD 2.5 billion, while also supporting the Philippines dairy market.

The government-owned Dairy Training and Research Institute (DTRI) and Philippine Carabao Center (PCC) produce white cheese from locally produced milk. Philippines is witnessing the expansion of fast-food, and pizza chains, contributing to the demand for cheese, thus increasing the Philippines dairy market share.

A standard serving of plain yogurt made from whole milk (245 grams) contains approximately 8.5 grams of protein. Yoghurt’s natural protein content and live bacteria culture make it a natural choice for health-conscious consumers. The prevalence of diabetes is expected to increase the demand for healthier low-sugar varieties with fewer additives. By 2045, 7.5 million individuals aged 20-79 years are projected to be diagnosed with diabetes compared to 4.3 million in 2021.

Fast food chains are expanding and are importing ice creams to meet their customer’s needs. Key importers of ice creams include McDonald’s and Jollibee Foods Corporation. Key ice cream brands in the Philippines dairy market include The Unilever Group (Selecta, Cornetto, Magnum) and Nestlé S.A. (Nestlé, Drumstick, Lait, Pinipig).

Competitive Landscape

Leading dairy corporations consistently allocate resources towards research & development in order to provide inventive dairy products that satisfy changing consumer tastes. In order to satisfy the demands of health-conscious consumers, businesses also concentrate on creating value-added dairy products with practical advantages, like probiotic-enriched yogurt or fortified milk.

Nestlé Philippines, Inc.

Nestlé Philippines, Inc., is a private subsidiary of Nestlé S.A. The company is a prominent producer and distributor of food and beverage products, recognized globally for its renowned brands. Founded in 1911, Its diverse product range includes baby foods, breakfast cereals, coffee, tea, dairy items, and frozen foods.

Alaska Milk Corporation

Alaska Milk Corporation, a subsidiary of Royal FrieslandCampina BV, is a leading dairy company in the Philippines committed to providing high-quality and affordable nutrition for families and children. Founded in 1972, Alaska Milk also actively supports corporate social responsibility initiatives, including milk feeding programs in schools and communities, sports development projects, and assistance for small businesses.

Yakult Philippines Incorporated

Yakult Philippines Incorporated, a subsidiary of Yakult Honsha, Co. Ltd., is committed to promoting health through its flagship probiotic drink, Yakult, featuring Lacticaseibacillus paracasei strain Shirota (LcS). Founded in 1978, the company has two manufacturing facilities in province of Laguna and El Salvador along with four depots which are strategically located in Marilao Bula iscan, Victoria Laguna, Antipolo City Rizal and Dasmariñas Cavite.

San Miguel Food and Beverage, Inc.

San Miguel Food and Beverage, Inc., is a leading Philippines company and sells its products under three different brand names: San Miguel Foods, San Miguel Brewery and Ginebra San Miguel Inc.. Founded in 1890, the company’s operations encompass the entire value chain, including animal feeds, fresh and processed meats, ready-to-eat meals, flour, dairy, spreads, and coffee.

Other key players in the Philippines dairy market are Century Pacific Food Incorporated, Fonterra Brands Philippines, Inc., and Arla Foods Corp. Philippines, among others.