July 2, 2025 – Innova Market Insights’ 360 Report Dairy & Dairy Alternatives in Nordic Countries explores the evolving landscape of dairy and non-dairy across the region, with a focus on milk and milk drinks, cheese, and yogurt. This report highlights the latest trends, consumer motivations, and innovation drivers shaping each category. Part of Innova’s 360 Category Reports series, it offers a complete, data-driven view of category performance, product launches, and strategic opportunities—helping brands and suppliers make informed, faster decisions.
What Key Health Targets for Nordic Countries?
The Nordic dairy and non-dairy markets present opportunities for growth. Traditional dairy represents a mature category that continues to demonstrate respectable sales growth with potential for added value, where taste and quality remain the primary consumer priorities over health considerations. The sector benefits from strong positioning around traditional and organic sourcing, emphasizing real, recognizable ingredients, while protein delivery has emerged as a key health target alongside the regional importance of lactose-free claims.
In contrast, non-dairy is operating as a relatively new category characterized by strong sales growth, opportunities for new market entrants, and consistent innovation cycles. While taste serves as the primary purchase driver—mirroring dairy preferences—sustainability in sourcing has become a binding differentiator as consumers pursue both environmental and personal health benefits.
The region shows notably higher consumer preference for palm oil-free claims compared to global markets, while protein delivery remains the dominant health message. Consumer preferences lean toward flavored variants over plain options in cheese and yogurt alternatives, reflecting the continued centrality of palatability in product development across both categories.
Why Value Creation Is Key for Dairy and Non-Dairy
Cost considerations dominate both dairy and non-dairy markets, with economic headwinds expected to intensify pricing pressures, forcing suppliers to demonstrate clear added value to justify premium positioning. In the dairy sector, value creation centers on local, traditional, traceable, and ethical sourcing, encompassing products from small farms, grass-fed cattle, local production, and traditional manufacturing methods.
Naturalness has emerged as a key consumer consideration, closely aligned with traditional and authentic sourcing practices, with “made with real or natural ingredients” becoming the most influential claim for Nordic dairy buyers. The non-dairy landscape demonstrates equally compelling value positioning through plant-based messaging, which carries positive connotations of health, sustainability, and naturalness.
Dairy trends show plant-based claims have surged since 2020, now surpassing vegan claims.Innovation patterns reveal a pronounced preference for oats as the foundational ingredient, with limited exploration of alternative plant sources. Oats dominated Nordic dairy alternative drink launches in 2024, outpacing soy and almonds, indicating both consumer preference and innovation concentration in this category.
The protein phenomenon is a dominant force across the dairy industry. In 2024, an impressive number of all new dairy products prominently featured a high-in or source-of-protein claim, making it the second most important health claim in dairy new product development, surpassed only by lactose-free. Suppliers are keenly aware of this trend, highlighting specific quantities or types of protein in their offerings. This empowers consumers to make direct comparisons on shelves, ensuring they clearly recognize and value the quantifiable benefits these protein-rich products provide.
Macro Drivers and Lifestyle Themes in Dairy and Non-Dairy
The current economic climate, particularly in the Western world, is impacting consumer behavior, with cost becoming a critical factor due to the pandemic’s lingering effects and global conflicts driving up the cost of living. For many, dairy remains an everyday essential, suggesting a potential polarization in demand: a continued interest in more affordable daily staples alongside occasional, higher-priced indulgent treats.
In contrast, health is an overriding factor in the non-dairy sector, with many consumers still willing to pay a premium for products that support their personal wellbeing. Beyond individual health, planetary health has emerged as the number one consumer concern in recent years, a trend that will undoubtedly influence future demand across various categories. The dairy industry, in particular, faces a negative blow due to its perceived environmental impact from methane emissions and animal welfare concerns. While health and taste are paramount for non-dairy consumers, the inherent environmental benefits of plant-based diets further bolster the category’s positive image.
Following closely behind planetary health, personal health remains a primary driver for many food and beverage choices, emphasizing the ongoing importance of healthy formulations in both dairy and non-dairy. Dairy can leverage its naturally beneficial nutritive profile, enhancing it with fortification in areas like protein, fiber, or probiotics. Contrarily, the non-dairy segment must actively incorporate recognized nutrients into its formulations, while simultaneously striving to minimize ingredients, exclude additives, and move away from ultra-processed products.
Can Lifestyle Factors Shape Both Dairy and Non-Dairy Development?
Dairy trends reveal that self-care is becoming important in the health and wellness arena, and consumers are more focused on targeting positive nutrition as a way to prevent potential health problems. Both dairy and non-dairy products can be carriers of the nutrients that support health as well as other added ingredients that can deliver targeted functional boosts for individual needs.
Consumers are ever more conscious about their impact on the world and lifestyles are evolving as a result. In Europe, younger shoppers have changed their diet to support the environmental or social situation. While purchasing a non-dairy product can be seen as positive, these products, and those in the dairy arena, will also need to add value through sourcing and packaging.
Faced with the rising cost, European consumers are turning to smaller edible treats and rewards to improve their mood. The importance of treats could drive some consumers back toward dairy options if non-dairy feels like a taste compromise, at least occasionally. Within both dairy and non-dairy, indulgent choices will have a positive place on the shelves.
Will Tariff Turmoil Exacerbate Pricing Pressures?
The Trump administration in the United States has cast the global trade situation into turmoil, and the punishing tariffs being imposed between previously close partners are expected to have a major impact on both the dairy and non-dairy markets. In the case of the former, both the cost of animal feed and the dairy products themselves will be affected, while in the latter, the raw materials used to develop dairy alternatives will experience price rises when crossing borders.
Dairy prices are already at very high levels, so further hikes could have an impact. Price rises will polarize markets: Any price increases prompted by international trade battles are expected to further polarize markets, with consumers balancing cheap, everyday purchases with a desire to see clear benefits when they spend more.
What’s Next for Dairy & Dairy Alternatives in the Nordic Region?
The evolving landscape of the food marketplace highlights the growing importance of specific protein types and quantities, alongside the valuable contributions of fiber and other healthy ingredients. As consumers prioritize sustainable living, responsible sourcing, and eco-friendly packaging are set to play an important role in product development for both dairy and non-dairy categories.
Additionally, flavor innovation presents an opportunity for brands to differentiate themselves, particularly in a landscape characterized by diverse consumer preferences, including the growing demand for lactose-free options.
Dairy trends show that consumers appear to be increasing their consumption of both dairy and non-dairy products. The appeal of hybrid products that blend dairy with the nutritional benefits of pulses or grains caters to the flexible consumer, offering a balance of taste and health. As these trends continue to shape the industry, companies that adapt to these consumer needs and preferences will likely find greater success in the marketplace.
This article is based on Innova’s Dairy & Dairy Alternatives in Nordic Countries report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more
