At the end of 2023, world production of raw milk reached 569 million tonnes, about 2% more than in 2022. The EU (143 million tonnes), the US (104 million tonnes) and India (99 million tonnes) are the leading countries. This continues the market growth trend that started in 2022. However, some analysts believe that milk production will either stagnate or decline in a number of foreign countries in 2024 due to a reduction in the number of cows.

According to a study by analytics firm Statista, the average per capita consumption of dairy products worldwide will rise to 56.4kg by 2024. Demand will grow most significantly in low-income countries such as India, Pakistan, and some other African countries.

Dairy prices in key producing regions are expected to recover from the downturn at the end of 2023 and gradually increase throughout 2024. However, according to the latest data from Rabobank, the recovery in global milk prices is slower than previously forecast.

State of the Russian milk and dairy market

Russia produced 33.5 million tonnes of milk in 2023, up 3.6% from the previous year. Overall, the country has seen an increase in raw milk production over the last five years, with the figure rising by 3.2 million tonnes over this period. This has been influenced by the increase in cow productivity, the creation of new and the modernisation of existing livestock breeding and production complexes. Last year also saw increases in the production of cream (+21%), cheese (+16%), ice cream (+12%), butter (+2%), fermented milk products (+5%), in particular kefir (+2.9%), yoghurt (+4.2%), ryazhenka and varenza (+7.2%).
 

However, cottage cheese production decreased by 3.9% compared to 2022. The production of products in which dairy fats are replaced by vegetable fats will also decrease margarine and spreads (-10%) and cheese products (-7%). This is due to the reorientation of consumer demand towards more expensive and natural dairy products.

According to the former Minister of Agriculture, Dmitry Patrushev, the level of self-sufficiency in dairy products in Russia exceeds 85%, which brings the Russian market close to the 90% level set by the Food Security Doctrine. If supplies from Belarus are also considered, the self-sufficiency level is almost 100%.

Belarusian goods account for 94% of all dairy product imports. This is 5% more than in 2022 when more than 5.5 million tonnes of dairy products from Belarus were imported into Russia. In general, the volume of imports, which accounts for less than 15%, at the end of 2023 remained at about the same level as in 2022 - when the country imported about 877 thousand tonnes of dairy products. Nevertheless, in a number of milk-intensive categories (e.g. butter, cheese), the share of imports is still more significant. According to Artem Belov, Director General of the National Milk Union (Soyuzmoloko), dairy imports will remain relatively stable in 2024.

As for exports, they increased by 18% last year compared to 2022 and amounted to about 1 million tonnes. Exports of skimmed milk powder increased the most, by almost 6 times. This was followed by whey powder, the volume of which went abroad almost three times as much. In 2023, domestic dairy products were exported to more than 60 countries. China, Kazakhstan, Armenia, Belarus, Uzbekistan and Azerbaijan will be the main consumers of Russian products. By the end of 2024, the number of countries to which Russian dairy products are exported is likely to increase, as new markets are now opening up for Russian producers in North Africa (Tunisia, Algeria) and Southeast Asia (Malaysia, the Philippines). Artem Belov believes that exports will grow by 20%.

According to the Milknews analytical centre and experts at Soyuzmoloko, the average per capita consumption of milk and dairy products in Russia rose by 3% to 249 kg in 2023. This is a record figure for the last 28 years. The growth of consumption of dairy products in the country has been observed since 2019 - then the figure was 234 kg per person. In 2020, it increased to 240 kg; in 2021, it increased to 241 kg; and in 2022, it increased to 241 kg. Consumption will increase for almost all types of dairy products, including milk-intensive products. According to various estimates, consumption of milk and dairy products in Russia will continue to grow by 2-5% per year. Ilya Bereznyuk, Managing Partner of Agro & Food Communications, notes that, on average, dairy products account for at least 10% of a consumer's food basket, which is unlikely to decrease by 2024.

Analysts attribute the growth in consumption to the increase in the population's real disposable income, which, according to Rosstat data, grew by 5.4% in 2023. In addition, dairy products have become more affordable due to the increase in local production, the reduction in the range of imported products and the low prices offered by producers. The latter was related to export difficulties: in 2022, the geopolitical situation forced Russian exporters to focus on Africa, Asia and the Middle East, which proved to be more expensive than transport to Europe. At the same time, the increase in supply on the domestic market has kept prices down. According to Soyuzmoloko, the retail price of dairy products in December 2023 was only 0.5% higher than in the same month of 2022. The average retail price of pasteurised milk in the fourth quarter of 2023 was 74 roubles per 1 kg, and ultra-pasteurised milk - 79 roubles. According to Artem Belov, on average, retail prices for dairy products were 2.6% higher last year than in 2022, keeping food inflation in check.

Dairy industry trends in 2024

One of the most significant trends in the Russian dairy market is the creation of products aimed at maintaining a healthy lifestyle and focusing on functional nutrition. Manufacturers are producing dairy products for therapeutic and preventive nutrition, which also serve as an additional source of vitamins, minerals, fibre, amino acids, and probiotic microorganisms. These products usually contain no added sugar, artificial colours, or flavourings and can even be used to correct the diet for various diseases.

Alternative dairy products continue to grow in popularity. Not only are vegans and people with lactose intolerance choosing them, but also consumers who simply like the taste of plant-based drinks. In Russia, according to the INFOLine Group, more than 50% of the market is taken up by milk and milk product analogues. However, in absolute terms, plant-based milk sales still do not exceed 2% of cow's milk sales. The results of a joint study by INFOLine Group and DairyTech Connect, conducted in early 2024, show that only a quarter of milk and dairy producers surveyed see competition from plant-based drinks. 67% of respondents see no competition at all, while 9% are already producing or planning to produce plant-based counterparts.

Another notable trend in the milk and dairy market is family packaging. Milk, kefir, butter and cottage cheese are sold in 'family sizes'. Manufacturers are actively using the concept of family packaging in their marketing activities, emphasising to customers that the large format allows them to buy goods for the whole family at an optimal price and is also suitable for those who prefer to buy dairy products in advance.

Dairy and cheese at WorldFood Moscow

The Dairy and cheese sector at WorldFood Moscow is one of the most popular. Of the 20,115 retailers, wholesaler buyers, caterers, and food manufacturers who visited WorldFood Moscow 2023, 25% (5,029 people) were interested in products from this sector.

Exhibitors in this sector showcase milk and cream, butter, cottage cheese, curd, curd and sour milk products, yoghurt (including frozen), dairy preserves, ice cream, dairy desserts and snacks, cheese and other dairy products. In 2023, 61 companies exhibited in the Dairy Products and Cheese section.

By becoming an exhibitor at WorldFood Moscow 2024, your company can also present its dairy products to an interested audience of visitors. The exhibition can be used as a powerful marketing tool, allowing you to find new customers and negotiate with potential partners from more than 80 regions of Russia in just four days.

WorldFood Moscow 2024 will be held from 17 to 20 September at the Crocus Expo IEC (Pavilion 3).