Butter Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Cultured Butter, Uncultured Butter, Others), By Sales Channel (Hypermarkets/Supermarkets, Convenience Stores, Online, Others), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 57.84 Billion
CAGR (2026-2031)	4.48%
Fastest Growing Segment	Online
Largest Market	Asia Pacific
Market Size (2031)	USD 75.24 Billion

Market Overview

The Global Butter Market will grow from USD 57.84 Billion in 2025 to USD 75.24 Billion by 2031 at a 4.48% CAGR. Butter is a concentrated dairy product derived from churning cream to separate butterfat from buttermilk, serving as a fundamental ingredient valued for its distinct flavor and functional properties. The market is primarily driven by the robust expansion of the commercial bakery and confectionery sectors, which increasingly rely on high-quality natural fats to ensure superior texture and taste. Furthermore, a decisive consumer shift towards clean-label ingredients has elevated the demand for natural dairy fats over processed substitutes like margarine, supporting consistent consumption growth. According to the USDA Foreign Agricultural Service, in 2025, global butter production is forecast to reach 11.98 million metric tons.

However, market expansion faces a significant challenge regarding the volatility of raw material prices and supply chain instability. Fluctuations in feed costs and milk availability, often exacerbated by environmental regulations and adverse weather conditions, lead to unpredictable pricing structures that strain manufacturer profit margins. This economic uncertainty can disrupt trade flows and inventory management, thereby impeding the steady development of the global butter market.

Key Market Drivers

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

Simultaneously, a decisive shift from artificial margarine to butter driven by health awareness is propelling value growth in developed markets. Consumers are increasingly rejecting processed hydrogenated fats in favor of natural, clean-label dairy options that offer superior taste and functional benefits. This preference for natural fats has resulted in butter gaining significant market share as shoppers prioritize ingredients perceived as wholesome. This consumer pivot is quantitatively evidenced by surging demand in major markets; according to The Bullvine, January 2025, domestic butter consumption in the United States recorded an 11.2% year-over-year rise in October 2024, highlighting the renewed appetite for natural dairy fats over synthetic alternatives.

Download Free Sample Report

Key Market Challenges

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

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

Key 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 animal welfare and nutrient density. Shoppers are gravitating towards dairy products sourced from pasture-raised herds, associating them with superior flavor profiles and higher concentrations of omega-3 fatty acids compared to conventional grain-fed alternatives. This premiumization trend has enabled established brands to secure robust sales volumes despite broader inflationary pressures, confirming that quality remains a decisive purchasing factor. According to Dairy Industries International, April 2025, in the 'Ornua reports higher turnover and a record year for Kerrygold' article, the Kerrygold brand sold approximately 12 million retail packs of butter and cheese globally every week in 2024, highlighting the sustained consumer appetite for high-quality grass-fed dairy products.

Simultaneously, the Expansion of Premium Plant-Based and Vegan Butter Analogues is transforming the industry, driven by innovations that mimic the functionality and taste of dairy fats. Manufacturers are moving beyond traditional margarine by utilizing advanced formulations with oils like avocado, coconut, and oat to cater to flexitarian and lactose-intolerant demographics seeking sustainable options without compromising on culinary performance. This segment is witnessing specific growth in functional and health-oriented product lines that offer added benefits such as cholesterol reduction. According to The Grocer, June 2025, in the 'Flora Food Group sales and profits slump in promotion push' article, the company's premium ProActiv brand recorded a volume growth of 8.7% in 2024, demonstrating the resilience and expanding appeal of functional plant-based spreads even amidst a challenging retail environment.

Segmental Insights

Based on current market research, the Online segment is firmly established as the fastest-growing distribution channel in the Global Butter Market. This rapid expansion is primarily driven by the increasing consumer preference for convenience and the widespread adoption of digital shopping platforms. Unlike traditional physical retail, online channels provide shoppers with access to a broader inventory of specialized products, including premium, organic, and artisanal butter varieties that are often difficult to source locally. Furthermore, significant advancements in cold-chain logistics have resolved previous preservation challenges, enabling manufacturers to reliably deliver perishable dairy products directly to consumers and accelerating the shift toward e-commerce.

Regional Insights

The Asia Pacific region dominates the Global Butter Market, driven primarily by substantial population growth and rising disposable incomes across developing economies. As urbanization accelerates, consumers are increasingly adopting Western dietary patterns, leading to a surge in demand for bakery products, confectionery, and processed foods where butter is a fundamental ingredient. Consequently, the regional food processing industry has expanded significantly to meet this consumption shift. Additionally, the presence of major milk-producing nations like India supports a robust supply chain, further reinforcing the region’s leadership in the global sector.

Recent Developments

• In October 2025, Fonterra announced a major $75 million investment to expand butter production capacity at its Clandeboye manufacturing site in South Canterbury, New Zealand. This strategic development involved the planned construction of a new butter line capable of increasing the site's output by up to 50,000 metric tonnes per annum. The Chief Executive Officer stated that this expansion would enable the cooperative to produce a wider range of butter formats tailored for global ingredient customers and professional kitchens, including products meeting specific Halal and Kosher certifications to support international market growth.
• In September 2024, the A.1. brand entered the competitive butter market with the launch of A.1. Steakhouse Butter, aiming to capture the growing demand for restaurant-quality flavors at home. This introduction marked the brand's first significant product innovation outside of its signature sauce bottle in more than five years. The product was developed to combine authentic steakhouse flavors with a rich, creamy texture, providing a versatile condiment suitable for grilling and enhancing the flavor profiles of various meal preparations. The launch underscored the brand's strategy to blend time-honored traditions with modern culinary trends.
• In August 2024, Arla Foods significantly expanded its product portfolio by launching a plant-based version of its renowned Lurpak spreadable butter in the United Kingdom and Denmark. This strategic initiative was intended to address shifting consumer consumption habits and the increasing demand for high-quality dairy alternatives in the marketplace. The executive vice-president of the company emphasized that this innovation allowed them to offer diverse choices within their brand portfolio, ensuring they could cater to both dairy and non-dairy preferences while maintaining the distinct taste and quality standards associated with the Lurpak brand.
• In July 2024, Challenge Dairy Products, a prominent marketing and processing cooperative, achieved a significant milestone by rolling out the national distribution of its new Spreadable Lactose Free Clarified Butter with Canola Oil. This product launch was strategically designed to capitalize on the rapidly expanding lactose-free category, which was projected to reach substantial market value by the following year. The organization aimed to provide a high-quality dairy option that maintained the authentic taste and spreadability expected by consumers, effectively catering to those with dietary restrictions while ensuring the product remained versatile for various culinary applications.

Key Market Players

• 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

By Type	By Sales Channel	By Region
Cultured Butter Uncultured Butter Others	Hypermarkets/Supermarkets Convenience Stores Online Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Butter Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• 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
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE