Butter & Cheese Production in the UK: Market Size, Businesses & Forecast 2026

The UK butter and cheese production industry involves processing milk into butter and cheese products for domestic and international markets. The sector has shown resilience despite economic pressures, with UK cheese production reaching approximately 438,000 tonnes in 2022 (DEFRA), while butter production was estimated at around 140,000 tonnes in 2021 (AHDB). The industry is adapting to changing consumer preferences and supply chain challenges.

Industry snapshot

Key public data points

Historical & forecast

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What does the Butter & Cheese Production in the UK industry cover?

The butter and cheese production industry encompasses the processing of milk into butter and cheese products in the United Kingdom. This includes both artisanal and large-scale manufacturing operations supplying various market segments from food service to retail. The industry operates under strict quality and safety regulations governing dairy production.

• •Cheese production accounted for approximately 438,000 tonnes in 2022 (DEFRA)
• •Butter production was estimated at 140,000 tonnes in 2021 (AHDB)
• •The industry includes both hard cheese varieties (cheddar, cheshire) and soft cheeses (brie, camembert)
• •Processing facilities range from small artisan producers to large industrial dairies

Who operates in the industry and how is it structured?

The UK butter and cheese market features a mix of multinational dairy processors, medium-sized regional companies, and artisan producers. Large players dominate the bulk of production volume, while artisanal producers serve niche premium markets. The industry has seen consolidation in recent years though artisanal segments continue to grow.

• •Major players include Arla Foods UK, Saputo Dairy UK, and First Milk
• •Artisan cheese makers have increased by approximately 20% since 2010 (British Cheese Board)
• •The industry supports around 12,000 direct and indirect jobs (DEFRA)
• •Small to medium enterprises account for approximately 30% of production volume

What drives demand in the industry?

Consumer demand is primarily driven by food service sector requirements, retail preferences for both traditional and innovative dairy products, and export opportunities. Changing dietary patterns including increased consumption of natural and minimally processed foods have supported butter demand, while cheese consumption remains stable with growth in premium varieties.

• •UK per capita cheese consumption averages around 22kg per person annually (Eurostat)
• •Food service sector accounts for approximately 40% of butter and cheese sales (AHDB)
• •Export markets absorb around 15-20% of UK cheese production (DEFRA)
• •Growing demand for organic and artisanal cheese products (Soil Association)

Who are the notable companies in the industry?

The competitive landscape includes multinational dairy processors with UK operations alongside established British dairy companies and emerging artisan producers. Major players compete on scale, distribution networks, and product innovation, while artisan producers focus on quality and regional identity.

• •Arla Foods UK - One of the largest dairy processors in the UK
• •Saputo Dairy UK - Major cheese and butter producer
• •First Milk - UK dairy cooperative with significant cheese production
• •Paxton & Whitfield - Specialized retailer and producer of artisanal cheeses

What are the recent trends and outlook?

The industry is experiencing increased focus on sustainable production practices, product innovation including plant-based alternatives, and premiumization of dairy products. Supply chain efficiencies and cost management have become critical amid rising input costs and energy prices.

• •Approximately 25% of dairy companies have introduced reduced-fat cheese options (Innovate UK)
• •Energy costs increased by over 30% affecting production margins (DEFRA)
• •Investment in automation and processing efficiency reached £50M in 2022 (AHDB)
• •Export growth to EU and Asian markets continues despite trade challenges

How is the industry regulated?

UK butter and cheese producers operate under strict regulatory frameworks governing food safety, hygiene standards, and animal welfare. Post-Brexit regulations have established UK-specific standards while maintaining alignment with international food safety requirements.

• •Hygiene Regulations (EC) No 852/2004 enforced by Food Standards Agency
• •Dairy products must comply with compositional standards (The Dairy Products (Hygiene) Regulations)
• •Animal welfare requirements under UK Animal Welfare Act 2006
• •All dairy processing facilities must hold appropriate food safety certifications

Government, statistical and trade sources used for this Claight analysis.

• Department for Environment, Food and Rural Affairs (DEFRA) Dairy Statistics 2022 ·
• Agriculture and Horticulture Development Board (AHDB) Dairy Market Report 2022 ·
• Eurostat Dairy Statistics 2021 ·
• Food Standards Agency UK Dairy Regulations ·
• British Cheese Board UK Cheese Industry Report 2022 ·
• Soil Association Organic Market Report 2022