United Arab Emirates Dairy Market Size and Forecast 2025-2033

According to Renub Research Latest Report United Arab Emirates (UAE) dairy market is projected to grow from US$ 4.20 billion in 2024 to US$ 6.60 billion by 2033, expanding at a CAGR of 5.22% from 2025 to 2033. This growth is propelled by the UAE’s rapidly growing population, urbanization, rising disposable incomes, evolving dietary preferences, increasing health consciousness, and product innovations in dairy offerings. Additionally, supportive government policies and regulations have strengthened the sector, encouraging both local and international dairy producers to expand operations and introduce new products.

The UAE dairy industry covers a wide array of product types, including liquid milk, flavored milk, cream, butter, cheese, yogurt, ice cream, anhydrous milk fat (AMF), skimmed milk powder (SMP), whole milk powder (WMP), whey protein, lactose powder, curd, and other dairy products. Distribution occurs through supermarkets/hypermarkets, convenience/grocery stores, online retail, and other channels, with significant consumption in major regions like Dubai, Abu Dhabi, and Sharjah.

Industry Overview

Dairy products are a staple of the UAE diet, including milk, yogurt, cheese, and butter. Domestic production, led by companies like Almarai and Al Ain Dairy, contributes to market supply, but the country continues to rely heavily on imports to meet growing demand, particularly for high-end and specialty products.

Urbanization and lifestyle shifts have increased the consumption of convenience foods, including fortified and ready-to-consume dairy products. In addition, the UAE’s harsh climate and limited arable land necessitate the use of advanced technologies like vertical farming, imported feed, and precision dairy farming techniques to maintain production levels.

Health-conscious consumers are increasingly seeking plant-based, low-fat, lactose-free, and fortified dairy products, boosting demand for functional and value-added offerings. The market’s growth is supported by innovations in product formulations, including probiotic yogurts, vitamin-fortified milk, protein-enhanced dairy beverages, and functional cheeses.

With a total population of 10.17 million in 2023, 88.5% of which are expatriates, urban centers like Dubai and Abu Dhabi are key consumption hubs. Urban lifestyles, convenience preferences, and nutritional awareness are driving the consumption of fortified and functional dairy products.

Government initiatives, such as the UAE Food Security Strategy (2020), focus on enhancing domestic production, reducing import dependency, and promoting nutritional awareness, further supporting market growth.

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Market Drivers

1. Product Innovation

Innovation is a key driver in the UAE dairy market. Both domestic and international companies are developing novel dairy products to meet changing consumer preferences. Notable innovations include:

Plant-based alternatives: Oat milk, almond milk, soy-based yogurts, and other vegan options.

Functional dairy products: Probiotic yogurts, vitamin D-fortified milk, omega-3 enriched beverages, and protein-fortified dairy.

Low-fat and lactose-free variants: Catering to health-conscious consumers and those with dietary restrictions.

These innovations cater to younger, health-focused, and lifestyle-oriented populations, driving the adoption of value-added dairy products.

2. Government Support and Investments

The UAE government is actively promoting local dairy production to enhance productivity, ensure food security, and reduce reliance on imports. Key initiatives include:

Sustainability programs for dairy farms: Modern irrigation, feed optimization, and animal health management systems.

Technological support: Introduction of advanced farming practices, precision dairy farming, and smart production technologies.

Environmental and carbon footprint initiatives: Encouraging sustainable and organic dairy production.

Government support ensures a steady supply of high-quality dairy products, which benefits both producers and consumers while strengthening the local dairy industry.

3. Health and Wellness Trends

Health consciousness is increasingly shaping consumer behavior in the UAE. Factors driving this trend include:

Rising concerns over lifestyle diseases, such as obesity, diabetes, cardiovascular disorders, and osteoporosis.

Increasing awareness of nutritional benefits of dairy, such as calcium for bone health, high-quality protein for muscle development, and micronutrients for overall wellness.

Growing demand for functional and fortified dairy products, including probiotic yogurts, omega-3 enriched milk, and vitamin-fortified cheese.

Rising interest in high-protein products, driven by fitness and sports culture.

A 2023 report by the UAE Ministry of Health and Prevention highlighted calcium deficiency as a major public health issue, particularly among women and children, underscoring the demand for nutrient-enriched dairy products.

Market Challenges

1. Harsh Climate and Limited Local Production

The UAE’s extreme temperatures and scarce arable land constrain large-scale local dairy production, making the country highly dependent on imports. Domestic producers face challenges such as:

Maintaining milk yield and quality in harsh climates.

High operational costs due to reliance on imported feed and advanced farming technologies.

Vulnerability to supply chain disruptions, resulting in price volatility.

2. High Import Dependency

Due to limited domestic production, the UAE relies heavily on imports for both raw materials and finished dairy products. This dependency exposes the market to:

Global price fluctuations, affecting product affordability.

Supply chain disruptions from geopolitical tensions, natural disasters, or transport delays.

Increased costs due to tariffs, shipping, and customs regulations.

Producers and retailers must manage these risks carefully to maintain consistent product availability.

Regional Analysis

Dubai

Dubai’s dairy market benefits from high urbanization, a diverse population, and strong health-conscious trends. Imported brands dominate the market, while local companies like Almarai and Al Ain Dairy continue to diversify their product portfolios to include lactose-free, low-fat, and plant-based options.

Abu Dhabi

Abu Dhabi’s dairy market is driven by population growth, rising disposable incomes, and evolving consumer preferences. Domestic production is limited, and imports play a key role. Health trends have boosted demand for functional and plant-based dairy, with companies expanding their offerings to meet these needs.

Sharjah

Sharjah shows steady market growth, driven by urbanization and rising consumer demand for convenient and nutritious foods. Imported dairy products dominate due to limited local production, but local companies are increasingly diversifying their portfolios to address health-conscious preferences.

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Market Segmentation

By Product Type

Liquid Milk

Flavored Milk

Cream

Butter

Cheese

Yogurt

Ice Cream

Anhydrous Milk Fat (AMF)

Skimmed Milk Powder (SMP)

Whole Milk Powder (WMP)

Whey Protein

Lactose Powder

Curd

Others

By Distribution Channel

Supermarkets/Hypermarkets

Convenience/Grocery Stores

Online Retail Stores

Other Channels

By Region

Dubai

Abu Dhabi

Sharjah

Others

Key Players Analysis

The UAE dairy market includes leading domestic and international players, evaluated across four parameters: overview, key persons, recent developments, and revenue:

Danone SA – Functional and fortified dairy products.

The Kraft Heinz Company – Cheese, butter, and value-added products.

Fonterra Co-Operative Group – Milk powder and specialty dairy.

Nestlé SA – Milk, yogurt, and fortified beverages.

General Mills Inc. – Functional and ready-to-eat dairy products.

Royal FrieslandCampina NV – Cheese, milk powder, and beverages.

Groupe Lactalis – Cheese, butter, and processed dairy products.

Arla Foods amba – Organic and functional dairy.

Al Rawabi Dairy Company – Liquid milk, yogurt, and fresh products.

National Food Products Company – Cheese, butter, and other dairy offerings.

These companies maintain market leadership through product innovation, diversified portfolios, digital marketing, and strong distribution networks.

Future Outlook

The UAE dairy market is expected to maintain steady growth through 2033, driven by:

Increased health consciousness, fueling demand for fortified, functional, and plant-based dairy products.

Technological advancements in dairy production, including precision farming and sustainable practices.

Government support for local production and self-sufficiency in dairy.

Urbanization and population growth, particularly in Dubai and Abu Dhabi.

Expansion of online retail and modern distribution channels, improving product accessibility.

As the UAE continues to emphasize nutrition, innovation, and sustainability, the dairy market is likely to offer significant opportunities for both domestic and international players, reinforcing its position as a regional hub for functional and value-added dairy products.

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