Ornua has issued a cautious assessment of the global dairy market, stating that overall dairy demand remains “muted” despite relatively stable retail sales in Europe. The company’s latest commentary points to a sector grappling with persistent inflation, subdued consumer confidence, and more selective purchasing behaviour factors collectively limiting market expansion.
European retail sales continue to hold firm, underpinned by consistent household demand for essential dairy categories. However, the pace of growth has noticeably slowed. Consumers, still dealing with elevated living costs, are shifting from premium to more mainstream options, resulting in a measurable cooling in value-led segments. While promotions are helping to sustain retail volume, the broader appetite for discretionary dairy products remains weak.
Inflation, although softer than last year, is still shaping how consumers buy dairy. Higher input and processing costs have kept shelf prices elevated, preventing a meaningful rebound in demand. Ornua notes that inflationary pressures continue to “reshape consumer priorities,” pushing households towards affordability and reducing the traction of premium dairy lines.
Globally, the demand outlook mirrors Europe’s cautious tone. Key dairy-importing regions in Asia and the Middle East are buying conservatively, avoiding large inventories and adopting shorter procurement cycles. This tight purchasing strategy has constrained global trade flows, especially for whole milk powder and cheese, signalling a broader market slowdown.
Looking ahead to 2025, the dairy sector appears to be entering a holding phase rather than a period of strong recovery. Retail price stabilisation, commodity price shifts, consumer sentiment, and foodservice revival will be the main indicators to watch. While Ornua remains confident in the long-term fundamentals of the dairy industry, the near-term environment suggests consolidation rather than growth.