Butter Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Butter Market is projected to expand from USD 57.84 Billion in 2025 to USD 75.24 Billion by 2031, reflecting a CAGR of 4.48%. Butter, a concentrated dairy staple produced by churning cream to isolate butterfat from buttermilk, remains a fundamental ingredient prized for its unique flavor and functional properties. Market growth is primarily fueled by the robust expansion of the confectionery and commercial bakery sectors, which increasingly depend on high-quality natural fats to achieve superior taste and texture. Additionally, a decisive consumer preference for clean-label ingredients has boosted demand for natural dairy fats over processed substitutes like margarine, ensuring steady consumption; the USDA Foreign Agricultural Service forecasts that global butter production will reach 11.98 million metric tons in 2025.

However, the market faces significant challenges stemming from supply chain instability and the volatility of raw material prices. Fluctuations in feed costs and milk availability, often worsened by adverse weather conditions and environmental regulations, create unpredictable pricing structures that pressure manufacturer profit margins. This economic uncertainty complicates inventory management and disrupts trade flows, thereby hindering the consistent development of the global butter market.

Market Drivers

The adoption of Western dietary habits within emerging economies is fundamentally reshaping the global butter market, driving substantial volume growth. As urbanization accelerates and disposable incomes rise, consumers in these regions are increasingly incorporating western-style bakery products and cuisines into their diets. This trend is particularly evident in India, where the dairy sector is rapidly expanding; according to The Times of India in April 2025, the Amul brand achieved a turnover of Rs 90,000 crore in the 2024-25 financial year, reflecting an 11.23% increase over the previous year. Conversely, established players face tightening trade dynamics, with Jordbrukare reporting in July 2025 that European Union butter exports are expected to decline by 2% in 2025 due to high domestic prices and limited global competitiveness.

Simultaneously, value growth in developed markets is being propelled by a decisive shift from artificial margarine to butter, driven by heightened health awareness. Consumers are increasingly rejecting processed hydrogenated fats in favor of natural, clean-label dairy options that provide superior taste and functional benefits, allowing butter to capture significant market share. This pivot is quantitatively supported by rising demand; according to The Bullvine in January 2025, domestic butter consumption in the United States saw an 11.2% year-over-year increase in October 2024, highlighting a renewed appetite for natural dairy fats over synthetic alternatives.

Market Challenges

The volatility of raw material prices serves as a primary obstacle to the stable expansion of the global butter market. Manufacturers face considerable operational risks due to unpredictable fluctuations in the costs of essential inputs, particularly raw milk and animal feed. These cost variations are frequently intensified by strict environmental regulations and adverse weather conditions that constrain milk yields. When milk fat availability becomes inconsistent, production expenses rise, forcing processors to either implement sharp price increases or absorb lower profit margins. This economic instability makes long-term financial planning and inventory management difficult, complicating efforts to maintain consistent supply levels.

Furthermore, uncertainty regarding input costs disrupts trade flows and hampers suppliers' ability to efficiently meet market requirements. High raw material prices directly diminish the competitiveness of butter relative to alternative fats, thereby stalling potential volume growth. According to the European Commission, wholesale butter prices in the European Union surged past €790 per 100 kilograms in September 2024 following a sharp decline in milk fat availability. Such rapid pricing escalations illustrate how raw material scarcity and supply chain instability create a volatile market environment that impedes the steady development of the global industry.

Market Trends

The surge in demand for grass-fed and organic butter varieties is redefining the premium segment of the global market as consumers increasingly prioritize nutrient density and animal welfare. Shoppers are gravitating toward dairy products sourced from pasture-raised herds, associating them with higher concentrations of omega-3 fatty acids and superior flavor profiles compared to conventional grain-fed alternatives. This trend toward premiumization has allowed established brands to secure robust sales volumes despite broader inflationary pressures; according to Dairy Industries International in April 2025, the Kerrygold brand sold approximately 12 million retail packs of cheese and butter globally every week in 2024, confirming sustained consumer appetite for high-quality grass-fed dairy.

Simultaneously, the industry is being transformed by the expansion of premium plant-based and vegan butter analogues that mimic the taste and functionality of dairy fats. Manufacturers are moving beyond traditional margarine by utilizing advanced formulations with oils such as avocado, coconut, and oat to cater to lactose-intolerant and flexitarian demographics seeking sustainable options without compromising culinary performance. This segment is seeing specific growth in health-oriented product lines; according to The Grocer in June 2025, Flora Food Group's premium ProActiv brand recorded a volume growth of 8.7% in 2024, demonstrating the expanding appeal and resilience of functional plant-based spreads even in a challenging retail environment.

Key Players Profiled in the Butter Market

• 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

Report Scope

In this report, the Global Butter Market has been segmented into the following categories:

Butter Market, by Type:

• Cultured Butter
• Uncultured Butter
• Others

Butter Market, by Sales Channel:

• Hypermarkets/Supermarkets
• Convenience Stores
• Online
• Others

Butter Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Butter Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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