South America Evaporated Milk Market Outlook, 2030

The South America evaporated milk market is a steady yet evolving segment within the regional dairy industry, driven by traditional consumption patterns, economic accessibility, and the product’s long shelf life. Demand across South America is primarily fueled by middle- and lower-income households, where evaporated milk is used as a cooking staple and a nutritional substitute for fresh milk in regions with limited refrigeration infrastructure. While fresh milk remains preferred in urban centers, evaporated milk continues to hold strong relevance in rural areas and among populations seeking affordable and non-perishable dairy products.

Raw material availability is largely based on domestic milk production from local cattle farms, with variations in milk yields and processing capacity between countries. Brazil and Argentina benefit from more advanced dairy infrastructure, whereas nations like Peru and Colombia rely heavily on smallholder farmers with relatively low productivity. The COVID-19 pandemic had a dual effect on the evaporated milk market. On one hand, economic slowdowns, job losses, and supply chain disruptions negatively impacted household purchasing power and dairy production. Regulatory frameworks across South America support the dairy industry through mandatory pasteurization, hygiene standards, and subsidies for small dairy farms. Countries like Brazil and Argentina offer government-backed assistance programs that promote dairy farm modernization, which indirectly benefits evaporated milk processors by improving the quality and consistency of raw milk. Furthermore, trade policies, especially under agreements like Mercosur, influence the flow of imports and exports of dairy products across regional markets. Exporters such as Uruguay and Argentina are key suppliers to neighboring nations, while protective tariffs and import duties safeguard local producers in markets with growing consumption needs.

According to the research report "South America Evaporated Milk Market Outlook, 2030,", the South America Evaporated Milk market is anticipated to grow at more than 3.56% CAGR from 2025 to 2030. Evaporated milk, with its long shelf life and lower storage requirements, continues to serve as an essential substitute for fresh milk in countries like Peru, Ecuador, and parts of Brazil. Peru stands out as a dominant player, accounting for over half of the regional evaporated milk production due to high per capita consumption and established processing infrastructure.

Meanwhile, Brazil and Argentina have seen increasing investments in dairy farm modernization and processing capabilities, aiming to reduce dependence on imports and stabilize domestic supply. Countries such as Argentina and Brazil possess vast grazing lands and established dairy farming sectors that contribute significantly to evaporated milk manufacturing. Government-backed initiatives in Brazil, such as the National Program for Strengthening Family Agriculture (PRONAF), have improved milk yields and supply chains, boosting the availability of raw milk for industrial uses. Technological upgrades in processing plants and the use of UHT (ultra-high temperature) techniques have also improved production efficiency and shelf-life management, enabling broader regional distribution. Export and import tariffs, particularly within the Mercosur bloc, have influenced trade patterns, with Argentina and Uruguay acting as exporters to countries with insufficient local production. Recent developments have also seen a gradual shift in consumer preferences, especially among younger, urban populations, who are increasingly favoring low-fat, organic, and fortified dairy products. The impact of COVID-19 on the evaporated milk market was notable, as the pandemic disrupted conventional supply chains and reduced household incomes across South America. Despite these disruptions, the demand for evaporated milk rose during the pandemic years as consumers prioritized non-perishable food products. This temporary shift helped stabilize market performance and even prompted manufacturers to increase output in countries like Peru and Argentina.

Market Drivers

• Widespread Use in Traditional and Everyday Cooking: A major driver in the South American evaporative milk market is its integral role in traditional and daily cooking practices. In countries like Brazil, Colombia, and Peru, evaporated milk is commonly used in a wide range of culinary applications, including desserts, soups, sauces, and beverages. Its rich, creamy texture and ability to enhance flavor make it a popular substitute for cream or fresh milk in both home and commercial kitchens. Latin American desserts such as tres leches cake, flan, and pudding often rely on evaporated milk as a key ingredient. This ingrained culinary use ensures consistent demand at the household and foodservice levels, supporting the product’s relevance across demographics and income groups.
• Growth of Urban Middle-Class and Modern Retail Access: Another strong driver is the rise of an urban, economically empowered middle-class population, particularly in countries like Brazil, Chile, and Argentina. As urbanization increases, so does the shift toward packaged, shelf-stable food products that offer convenience and versatility. Evaporated milk fits this profile perfectly offering longer shelf life and easy storage without refrigeration. The expansion of modern retail formats such as supermarkets, hypermarkets, and neighborhood convenience stores has further enhanced the accessibility of evaporated milk. This retail transformation, coupled with growing purchasing power, enables broader product visibility and consumer uptake across urban and semi-urban regions.

Market Challenges

• Volatile Economic Conditions and Price Sensitivity: A key challenge in South America is the region’s ongoing economic volatility, which affects consumer purchasing behavior. High inflation, currency fluctuations, and inconsistent wage growth in several countries particularly Venezuela and Argentina make consumers highly price-sensitive. As evaporated milk is considered a packaged, sometimes premium dairy product, its sales can decline when cheaper alternatives like fresh milk, powdered milk, or plant-based drinks become more appealing during financial stress. Manufacturers must navigate this economic uncertainty by offering affordable price points or smaller pack sizes to maintain demand among budget-conscious consumers.
• Rising Competition from Plant-Based and Powdered Alternatives: Another challenge is the increasing availability and popularity of milk alternatives, including powdered milk and plant-based options. Powdered milk, due to its lower cost, bulk packaging, and long shelf life, continues to dominate in rural and lower-income markets. Meanwhile, urban consumers especially younger demographics are gradually shifting toward plant-based alternatives like soy, almond, and oat milk, driven by health, ethical, and environmental considerations. This shift poses a threat to traditional dairy products like evaporated milk, especially as veganism and lactose intolerance awareness grow across South American cities.

Market Trends

• Rising Popularity of Sweetened Evaporated Milk for Desserts and Beverages: One notable trend in South America is the increased preference for sweetened evaporated milk, particularly in the context of dessert preparation and traditional beverages. Products like condensed-style evaporated milk are widely used in making caramel flan, arroz con leche, and coffee-based drinks. This trend is especially pronounced during festive seasons, holidays, and family gatherings when sweet, indulgent foods are in high demand. Manufacturers are capitalizing on this by launching flavored or ready-to-use sweetened dairy variants tailored for dessert and beverage applications, further embedding evaporated milk into the region’s culinary culture.
• Expansion of Local Brands and Private Label Products: Another emerging trend is the growth of local and store-brand (private label) evaporated milk offerings, particularly in large retail chains across Brazil, Chile, and Colombia. These products often come at lower price points than multinational or legacy dairy brands, making them attractive to price-sensitive consumers. Retailers are investing in improving quality, branding, and packaging of their private label evaporated milk to match consumer expectations. This has intensified competition within the market and is contributing to product diversification, promotional campaigns, and localized marketing efforts to cater to regional tastes and consumption habits.

The growth of the skimmed evaporative milk segment in South America is primarily driven by increasing consumer demand for low-fat, healthier dairy alternatives amid rising health consciousness and dietary shifts.

In South America, the growing demand for skimmed evaporative milk is closely tied to a broader transformation in consumer dietary preferences, particularly the increasing emphasis on health and wellness. As awareness of lifestyle-related health issues such as obesity, diabetes, and cardiovascular disease rises across the region, more consumers are actively seeking reduced-fat and calorie-conscious food options. Skimmed evaporative milk, which offers the nutritional benefits of regular milk with significantly less fat content, is being viewed as a more suitable alternative, especially for health-aware populations in urban areas.

This shift is supported by the increasing penetration of health education campaigns, government nutrition guidelines, and the growing influence of social media in spreading awareness about clean eating habits. Additionally, dietitians and healthcare providers are increasingly recommending low-fat dairy options to patients managing weight and cholesterol, further encouraging the use of skimmed variants in daily diets. In parallel, the food processing industry in countries like Brazil, Argentina, and Chile is also adapting by incorporating skimmed evaporative milk in the manufacturing of low-fat or reduced-calorie food products, expanding its industrial usage. Moreover, as the middle-class population expands and purchasing power improves, particularly in Brazil, consumers are becoming more selective and willing to pay a premium for perceived healthier choices. Retailers are responding to this trend by offering more shelf space and visibility to skimmed dairy products, including evaporated milk. The convenience factor of evaporative milk long shelf life, ease of storage, and versatility in cooking also plays a significant role, making it a practical choice for health-conscious consumers who are balancing nutrition with convenience.

The online distribution of evaporative milk is growing in South America due to increasing internet penetration, expanding e-commerce infrastructure, and consumer preference for convenience and contactless shopping.

The rapid growth of online distribution in South America’s evaporative milk industry can be attributed to the region’s evolving digital landscape and shifting consumer behaviors. Over the past decade, South America has seen a notable increase in internet access and smartphone usage, even in semi-urban and rural areas, creating fertile ground for e-commerce expansion. As more households gain reliable connectivity, digital platforms are becoming integral to everyday shopping habits. This digital shift was significantly accelerated by the COVID-19 pandemic, which normalized online grocery shopping across socioeconomic classes and age groups.

Consumers, once reliant on physical stores, became accustomed to the convenience and safety of purchasing pantry staples like evaporative milk online, and this habit has endured post-pandemic. Moreover, the emergence and aggressive expansion of e-commerce players in South America such as Mercado Libre, Amazon, and regional grocery platforms have dramatically improved last-mile delivery logistics and product availability, including for dairy products that require reliable storage and timely delivery. These platforms, often in partnership with local supermarkets and dairy brands, ensure that evaporative milk is stocked, promoted, and delivered efficiently to meet rising online demand. Additionally in the region, online shopping provides greater transparency and product variety, allowing consumers to compare brands, prices, nutritional content, and customer reviews before making a purchase an appealing factor for health-conscious buyers increasingly seeking skimmed or specialty evaporative milk options. The availability of subscription services and promotional discounts exclusive to online channels further incentivizes repeat purchases.

Brazil is leading in the South America evaporative milk industry due to its large-scale dairy production, widespread consumption of shelf-stable dairy products, and strong presence of domestic food and beverage manufacturers integrating evaporated milk into traditional and processed foods.

Brazil holds the leading position in the South American evaporative milk industry, driven by a combination of abundant raw milk production, cultural acceptance of shelf-stable dairy products, and a robust domestic food processing sector. As one of the largest dairy producers in the Southern Hemisphere, Brazil benefits from a vast network of dairy farms that supply high volumes of raw milk year-round, creating a strong base for evaporated milk manufacturing. The country's tropical climate and regional disparities in refrigeration infrastructure have historically made shelf-stable dairy products like evaporated milk a practical and reliable option for both urban and rural consumers.

Evaporated milk is widely used in Brazilian households for cooking, baking, and in beverages such as coffee, particularly in regions where fresh milk supply can be inconsistent. Additionally, it plays an important role in traditional dishes and desserts, further embedding it in everyday consumption habits. Brazilian food and beverage companies, including major players like Nestlé Brazil and Laticínios Tirol, have long incorporated evaporated milk into their product lines, ensuring consistent availability and market penetration across the country. These companies also distribute products through an extensive retail network that includes supermarkets, convenience stores, and increasingly, e-commerce channels, enhancing consumer access even in remote areas. As consumer preferences evolve, there is growing demand for fortified, low-fat, and lactose-free versions of evaporated milk, prompting local producers to innovate and diversify their offerings. Brazil's leadership is also supported by government programs that promote dairy industry modernization, agricultural subsidies, and initiatives to enhance food security.