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    Dairy By Products Market

    ID: MRFR/FnB/3625-HCR
    110 Pages
    Pradeep Nandi
    October 2025

    Dairy By-Products Market Research Report By Product Type (Whey Protein, Lactose, Casein, Butter Milk, Skimmed Milk Powder), By Application (Food and Beverages, Animal Feed, Nutritional Supplements, Pharmaceuticals), By Source (Cow Milk, Buffalo Milk, Goat Milk), By Form (Liquid, Powder, Granules) and By Regional (North America, Europe, South America, Asia Pacific, Middle East and Africa) - Forecast to 2035.

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    Dairy By Products Market Summary

    As per MRFR analysis, the Dairy By-Products Market Size was estimated at 31.55 USD Billion in 2024. The Dairy By-Products industry is projected to grow from 32.5 in 2025 to 43.72 by 2035, exhibiting a compound annual growth rate (CAGR) of 3.01 during the forecast period 2025 - 2035.

    Key Market Trends & Highlights

    The Dairy By-Products Market is experiencing a dynamic shift towards health-conscious and sustainable practices.

    • The North American region remains the largest market for dairy by-products, driven by a robust demand for whey protein.
    • In contrast, the Asia-Pacific region is emerging as the fastest-growing market, fueled by increasing consumer interest in nutritional supplements.
    • Whey protein continues to dominate the market, while lactose is witnessing rapid growth due to its applications in health products.
    • Key market drivers include the rising demand for nutritional products and innovations in food processing technologies.

    Market Size & Forecast

    2024 Market Size 31.55 (USD Billion)
    2035 Market Size 43.72 (USD Billion)
    CAGR (2025 - 2035) 3.01%

    Major Players

    Dairy Farmers of America (US), Fonterra Co-operative Group Limited (NZ), Nestle S.A. (CH), Lactalis Group (FR), Danone S.A. (FR), Saputo Inc. (CA), FrieslandCampina (NL), Arla Foods (DK), Schreiber Foods, Inc. (US)

    Dairy By Products Market Trends

    The Dairy By-Products Market is currently experiencing a notable transformation, driven by evolving consumer preferences and increasing awareness regarding health and nutrition. As individuals become more conscious of their dietary choices, there is a growing demand for products derived from dairy by-products, such as whey protein and lactose. These ingredients are not only recognized for their nutritional benefits but also for their versatility in various applications, including food, beverages, and dietary supplements. Furthermore, the market is witnessing a shift towards sustainable practices, with manufacturers exploring innovative methods to utilize by-products that would otherwise go to waste. This trend aligns with broader environmental goals and reflects a commitment to reducing the carbon footprint associated with dairy production. In addition to sustainability, the Dairy By-Products Market is influenced by advancements in technology and processing techniques. Enhanced methods of extraction and purification are enabling producers to maximize the value of by-products, thereby expanding their range of applications. This technological evolution is likely to foster new product development, catering to diverse consumer needs. As the market continues to evolve, it appears poised for growth, driven by a combination of health consciousness, sustainability, and innovation in processing. The future landscape of the Dairy By-Products Market suggests a dynamic interplay between consumer demand and industry adaptation, potentially leading to a more robust and diversified market.

    Health and Wellness Focus

    The Dairy By-Products Market is increasingly shaped by a heightened focus on health and wellness. Consumers are actively seeking products that offer nutritional advantages, such as protein-rich whey and lactose-free options. This trend indicates a shift towards healthier dietary choices, prompting manufacturers to innovate and create products that align with these preferences.

    Sustainability Initiatives

    Sustainability is becoming a central theme within the Dairy By-Products Market. Companies are exploring ways to minimize waste by utilizing by-products that would typically be discarded. This approach not only supports environmental goals but also enhances the overall efficiency of dairy production, appealing to eco-conscious consumers.

    Technological Advancements

    Technological advancements are playing a crucial role in the Dairy By-Products Market. Improved processing techniques are enabling the extraction of high-quality ingredients from by-products, expanding their applications in various sectors. This innovation is likely to drive product development and meet the evolving demands of consumers.

    Dairy By Products Market Drivers

    Expansion of Plant-Based Alternatives

    The expansion of plant-based alternatives is impacting the Dairy By-Products Market in various ways. As consumers increasingly adopt plant-based diets, there is a growing demand for dairy alternatives that incorporate dairy by-products. For example, plant-based yogurts and cheeses often utilize whey protein to enhance texture and nutritional value. This trend is supported by market data indicating that the plant-based food market is projected to reach 74 billion USD by 2027. Consequently, dairy producers are exploring innovative ways to integrate dairy by-products into plant-based formulations, thereby appealing to a broader consumer base. This intersection of dairy and plant-based products presents a unique opportunity for the Dairy By-Products Market to diversify its offerings and cater to evolving consumer preferences.

    Rising Demand for Nutritional Products

    The Dairy By-Products Market is experiencing a notable increase in demand for nutritional products. Consumers are increasingly seeking food items that offer health benefits, leading to a surge in the consumption of dairy by-products such as whey protein and lactose. According to recent data, The Dairy By-Products is projected to reach approximately 10 billion USD by 2026, indicating a robust growth trajectory. This trend is driven by the rising awareness of the importance of protein in diets, particularly among fitness enthusiasts and health-conscious individuals. As a result, dairy by-products are being integrated into various food and beverage formulations, enhancing their appeal and marketability. The Dairy By-Products Market is thus positioned to capitalize on this growing consumer preference for health-oriented products.

    Increased Global Trade of Dairy Products

    Increased global trade of dairy products is a significant driver for the Dairy By-Products Market. As international trade agreements facilitate the movement of goods across borders, dairy by-products are becoming more accessible to various markets. This trend is evidenced by the rise in exports of dairy by-products, such as cheese and whey, which are in high demand in regions with growing populations and increasing disposable incomes. For instance, countries in Asia and the Middle East are emerging as key markets for dairy imports, leading to a surge in the trade of dairy by-products. This expansion not only enhances market opportunities for producers but also fosters competition, driving innovation within the Dairy By-Products Market. As trade continues to grow, the industry is likely to see increased investment and development.

    Growing Interest in Sustainable Practices

    The Dairy By-Products Market is witnessing a growing interest in sustainable practices among consumers and producers alike. There is an increasing recognition of the environmental impact of dairy production, prompting stakeholders to seek ways to minimize waste and enhance resource efficiency. By utilizing dairy by-products, such as cheese whey and buttermilk, companies can reduce waste and create value-added products. This shift towards sustainability is reflected in the rising number of brands that emphasize eco-friendly practices in their marketing strategies. Additionally, regulatory frameworks are increasingly encouraging sustainable practices, further driving the adoption of dairy by-products. As sustainability becomes a key consideration for consumers, the Dairy By-Products Market is likely to benefit from this trend, positioning itself as a responsible and innovative sector.

    Innovations in Food Processing Technologies

    Innovations in food processing technologies are significantly influencing the Dairy By-Products Market. Advanced techniques such as membrane filtration and enzymatic processes are enhancing the efficiency of dairy by-product extraction and processing. These technologies not only improve yield but also preserve the nutritional quality of the products. For instance, the implementation of ultrafiltration in whey processing has led to higher protein concentrations, making it more appealing to manufacturers and consumers alike. Furthermore, the adoption of these technologies is expected to reduce production costs, thereby increasing profitability for dairy producers. As the industry continues to evolve, the integration of cutting-edge processing methods will likely play a crucial role in shaping the future landscape of the Dairy By-Products Market.

    Market Segment Insights

    Dairy By-Products Market Product Type Insights   

    The Dairy By-Products Market is characterized by a diverse array of product types, which significantly contribute to its overall dynamics and revenue generation. In 2023, the market was valued at 30.63 USD Billion, showcasing substantial opportunities for growth. Among the various product types, Whey Protein stands out with a valuation of 10.0 USD Billion in 2023, expected to rise to 13.0 USD Billion by 2032, emphasizing its dominance in the market due to its wide application in nutritional supplements and food products, appealing to health-conscious consumers.

    Lactose, valued at 9.0 USD Billion in 2023, is also noteworthy, projected to reach 11.5 USD Billion in 2032. Its significance stems from its utilization in the dairy industry as well as in the production of various food items, further enhancing its market presence. Casein, valued at 5.0 USD Billion in 2023, is critical for its functional properties in food formulation and its gradual growth trajectory, estimated to reach 6.5 USD Billion by 2032, reflects a steady demand for protein fortification.

    Butter Milk presents a smaller but significant portion of the market, initially valued at 3.0 USD Billion, with an anticipated increase to 4.0 USD Billion by 2032.

    This product type is favored for its low-fat content and probiotic benefits, showing a rising trend in functional foods. Skimmed Milk Powder, with a market value of 3.63 USD Billion in 2023 and projected to grow to 5.0 USD Billion, serves as a major component in various food and beverage applications, contributing to the versatility of dairy by-products.

    Hence, the Dairy By-Products Market segmentation by product type reveals crucial insights, demonstrating a robust framework for understanding its components, market trends, and the varying levels of consumer demand that influence the overall growth and direction of the industry while also capturing the key elements influencing market growth such as health trends, food innovation, and changing dietary preferences.

    Source Primary Research, Secondary Research, Market Research Future Database and Analyst Review

    Dairy By-Products Market Application Insights   

    The Dairy By-Products Market is poised for growth, with a valuation of 30.63 USD Billion in 2023, driven by various applications. The food and beverages segment plays a significant role, utilizing dairy by-products for their nutritional benefits and enhancing product flavors. Animal feed is another prominent application, crucial in livestock nutrition, where by-products serve as cost-effective feed alternatives while improving animal health and productivity. Nutritional supplements are gaining traction due to the increasing health consciousness among consumers, leveraging whey protein and other dairy derivatives for their dietary advantages.

    Pharmaceuticals also benefit substantially from the utilization of dairy by-products, as they are integral in the production of active pharmaceutical ingredients. Overall, the segmentation of the Dairy By-Products Market highlights its diverse applications, revealing strong demand and innovative growth opportunities aligned with market trends such as sustainability and health awareness. The projected market growth reflects the expanding use and importance of these by-products in everyday products, emphasizing the significance of Dairy By-Products Market revenue and the intricate interplay of its segments across various industries.

    Dairy By-Products Market Source Insights   

    The Dairy By-Products Market, valued at 30.63 USD Billion in 2023, showcases a diverse array of sources that significantly contribute to its overall growth. Within this market, cow milk emerges as a dominant source due to its wide consumption and extensive processing capabilities in creating numerous dairy by-products. Additionally, buffalo milk holds a significant position, primarily in regions where it is favored for its rich nutritional profile and higher fat content, thus driving demand for related by-products. Goat milk, while less predominant, is increasingly gaining traction as consumers seek alternatives for its digestibility and health benefits.

    This diversification among sources illustrates the dynamic nature of the Dairy By-Products Market revenue, which is further reflected in the Dairy By-Products Market segmentation. Market growth in this industry is propelled by the rising demand for diverse dairy products, although challenges such as fluctuating prices and changing consumer preferences persist. Opportunities lie in innovation and product development aimed at harnessing the unique qualities of each milk source, providing a fertile ground for enhanced market data and market statistics in future analyses.

    Dairy By-Products Market Form Insights   

    The Dairy By-Products Market, valued at 30.63 USD Billion in 2023, reflects a robust growth trajectory led by various forms of dairy by-products. This segment includes notable categories such as Liquid, Powder, and Granules, each playing a vital role in the market dynamics. Liquid dairy by-products often dominate the market due to their extensive use in consumer products like beverages and dairy-based drinks, which cater to rising health trends. Furthermore, the Powder form has gained significant preference in the food processing industry, offering convenience and extended shelf life, thus appealing to manufacturers and consumers alike.

    Granules, while less prominent, are crucial for specific applications like baking and dairy ingredient formulations. The growth in these forms is propelled by increasing consumer demand for dairy alternatives and high-protein foods, alongside the expansion of the food and beverage industry. However, challenges such as fluctuating raw material prices and sustainability concerns need to be addressed to maintain growth momentum. Overall, the segmentation of the Dairy By-Products Market reveals diverse opportunities for stakeholders through product innovation and strategic collaborations.

    Get more detailed insights about Dairy By Products Market

    Regional Insights

    North America : Dairy Innovation and Sustainability

    The North American Dairy By-Products Market is driven by increasing consumer demand for sustainable and organic dairy products. The U.S. holds the largest market share at approximately 65%, followed by Canada at around 20%. Regulatory support for sustainable practices and innovations in dairy processing are key growth catalysts. The market is also influenced by rising health consciousness among consumers, leading to a shift towards value-added dairy products. The U.S. is home to major players like Dairy Farmers of America and Schreiber Foods, Inc., which dominate the market landscape. Canada, with its strong dairy farming tradition, is also witnessing growth, supported by companies like Saputo Inc. and Lactalis Group. The competitive landscape is characterized by strategic partnerships and investments in technology to enhance product offerings and sustainability practices.

    Europe : Traditional Excellence Meets Innovation

    Europe's Dairy By-Products Market is characterized by a blend of traditional dairy practices and innovative processing techniques. The region is the second-largest market, holding approximately 25% of the global share, with countries like France and Germany leading the charge. Regulatory frameworks promoting quality standards and sustainability are significant growth drivers, alongside increasing consumer preferences for diverse dairy products. France, with key players like Lactalis Group and Danone S.A., is at the forefront, while the Netherlands and Denmark also contribute significantly to the market. The competitive landscape is marked by a focus on product innovation and sustainability, with companies investing in research and development to meet evolving consumer demands. The European market is poised for growth as it adapts to changing dietary trends and environmental regulations.

    Asia-Pacific : Emerging Markets and Growth Potential

    The Asia-Pacific Dairy By-Products Market is rapidly expanding, driven by increasing urbanization and rising disposable incomes. Countries like China and India are the largest markets, collectively holding about 30% of the global share. The demand for dairy products is fueled by changing dietary habits and a growing middle class, alongside supportive government policies aimed at enhancing dairy production and quality standards. China leads the market with significant contributions from companies like Fonterra Co-operative Group Limited and FrieslandCampina. India is also emerging as a key player, with a focus on traditional dairy products and innovations in processing. The competitive landscape is evolving, with local and international players vying for market share, leading to increased investments in technology and distribution networks to meet consumer demands.

    Middle East and Africa : Untapped Potential in Dairy Sector

    The Middle East and Africa Dairy By-Products Market is characterized by untapped potential and increasing investments in dairy production. The region holds about 10% of the global market share, with countries like South Africa and Egypt leading the way. The growth is driven by rising population, urbanization, and a shift towards healthier dietary options, supported by government initiatives to boost local dairy production. South Africa is a key player, with companies like Arla Foods and local producers expanding their offerings. The competitive landscape is marked by a mix of local and international players, focusing on product diversification and quality improvements. As the region continues to develop, opportunities for growth in dairy by-products are expected to increase, driven by changing consumer preferences and investment in infrastructure.

    Key Players and Competitive Insights

    The Dairy By-Products Market is characterized by a diverse range of products derived from the processing of milk, including lactose, whey proteins, and casein, among others. This market encompasses various segments that cater to food, feed, and pharmaceutical applications. The competitive landscape of the dairy by-products sector is influenced by evolving consumer preferences, innovative technologies, and sustainability trends. Players in this market strive to enhance product quality, manage supply chain efficiencies, and explore strategic partnerships to maintain a competitive edge.

    The dynamic nature of this industry calls for continual adaptation to market demands and regulatory changes, emphasizing the importance of market research and consumer insights in shaping successful business strategies.

    Lactalis Group stands out in the Dairy By-Products Market due to its extensive range and superior quality of dairy-derived offerings. Known for its strong market presence, Lactalis Group capitalizes on its robust distribution networks and established brand reputation. The company's strengths lie in its exceptional product innovation capabilities, allowing it to meet diverse consumer needs effectively. Lactalis Group has made significant investments in research and development to optimize production processes, ensuring high-quality by-products that comply with international standards.

    Furthermore, its commitment to sustainability and responsible sourcing strengthens its positioning in the market, appealing to health-conscious consumers and those seeking ethically produced dairy products.

    Danone is another formidable player in the Dairy By-Products Market, renowned for its wide array of yogurt and dairy-related products. The company emphasizes the nutritional value and functional benefits of its dairy by-products, which are aimed at promoting healthy lifestyles among consumers. Danone has a solid market presence backed by a strong brand image and consumer loyalty, which facilitates its ongoing expansion into emerging markets. The strength of Danone is evident in its innovative product lines that incorporate advanced nutritional research, targeting specific dietary needs.

    Additionally, Danone prioritizes sustainability, aiming to reduce its environmental footprint while enhancing the quality and safety of its dairy by-products, thus further solidifying its competitive stance in the industry.

    Key Companies in the Dairy By Products Market market include

    Industry Developments

    The Dairy By-Products Market is currently witnessing dynamic growth, driven by increased consumer demand for sustainable and nutritious products. Recently, Lactalis Group and Fonterra Cooperative Group have expanded their operations to enhance production efficiency and sustainability practices, aligning with trends favoring environmentally friendly practices. In addition, Danone has invested in innovative dairy alternatives, reflecting shifts in consumer preferences toward plant-based options. Recent acquisition activity has also shaped the market as Saputo announced its strategic acquisition of a regional dairy processing company, which allows for expanded product offerings and improved market outreach.

    Furthermore, Dairy Farmers of America is exploring partnerships to innovate their product lines. As companies like Royal FrieslandCampina and Schreiber Foods focus on digital transformation and supply chain optimization, the market is expected to benefit from advanced technologies. Growth in market valuation is being fueled by rising health consciousness among consumers, propelling firms like Arla Foods and Nestle to market new fortified dairy by-products. Overall, company strategies that prioritize sustainability, technological advancement, and diversification are likely to play a crucial role in shaping the future landscape of the Dairy By-Products Market.

    Future Outlook

    Dairy By Products Market Future Outlook

    The Dairy By-Products Market is projected to grow at a 3.01% CAGR from 2024 to 2035, driven by increasing demand for sustainable food sources and innovative processing technologies.

    New opportunities lie in:

    • Development of high-value whey protein products for health-conscious consumers.
    • Expansion into plant-based dairy alternatives to capture emerging market segments.
    • Investment in advanced fermentation technologies for enhanced product differentiation.

    By 2035, the Dairy By-Products Market is expected to achieve robust growth, reflecting evolving consumer preferences and technological advancements.

    Market Segmentation

    Dairy By-Products Market Form Outlook

    • Liquid

    Dairy By-Products Market Source Outlook

    • Cow Milk

    Dairy By-Products Market Application Outlook

    • Food and Beverages

    Dairy By-Products Market Product Type Outlook

    • Whey Protein

    Report Scope

    MARKET SIZE 202431.55(USD Billion)
    MARKET SIZE 202532.5(USD Billion)
    MARKET SIZE 203543.72(USD Billion)
    COMPOUND ANNUAL GROWTH RATE (CAGR)3.01% (2024 - 2035)
    REPORT COVERAGERevenue Forecast, Competitive Landscape, Growth Factors, and Trends
    BASE YEAR2024
    Market Forecast Period2025 - 2035
    Historical Data2019 - 2024
    Market Forecast UnitsUSD Billion
    Key Companies ProfiledMarket analysis in progress
    Segments CoveredMarket segmentation analysis in progress
    Key Market OpportunitiesGrowing demand for sustainable packaging solutions in the Dairy By-Products Market presents significant opportunities.
    Key Market DynamicsRising consumer demand for sustainable dairy by-products drives innovation and competition among manufacturers.
    Countries CoveredNorth America, Europe, APAC, South America, MEA

    Market Highlights

    Author
    Pradeep Nandi
    Senior Research Analyst

    I have a bachelor's degree in mechanical engineering and an MBA. I have more than two years of expertise in the retail, food, and beverage, chemical, and material industries, and hence have developed a sound cross-domain expertise. A firm believer in lifelong learning and sharing of knowledge. Having a proclivity for hatching ideas and trying to absorb as much information as possible in a short amount of time. Introducing corporates to the data and insight, which enables them to move from probability to possibility, has been my key areas of interest. 

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    FAQs

    What is the expected market size of the Dairy By-Products Market in 2032?

    The Dairy By-Products Market is expected to be valued at 40.0 USD Billion in 2032.

    What is the projected CAGR for the Dairy By-Products Market from 2024 to 2032?

    The projected CAGR for the Dairy By-Products Market from 2024 to 2032 is 3.01%.

    Which product type is expected to dominate the Dairy By-Products Market in 2032?

    Whey Protein is expected to dominate the market, projected to reach 13.0 USD Billion in 2032.

    What is the market size for Lactose in the Dairy By-Products Market by 2032?

    Lactose is expected to be valued at 11.5 USD Billion in the Dairy By-Products Market by 2032.

    Which region held the largest market share in the Dairy By-Products Market in 2023?

    In 2023, North America held the largest market share, valued at 8.0 USD Billion.

    What is the expected market value of the Dairy By-Products Market for Europe in 2032?

    The expected market value for Europe in 2032 is 12.0 USD Billion.

    What are some key players in the Dairy By-Products Market?

    Key players in the market include Lactalis Group, Danone, and Fonterra Cooperative Group.

    What is the projected market size for Skimmed Milk Powder in 2032?

    Skimmed Milk Powder is projected to reach 5.0 USD Billion in 2032.

    What is the expected market value for Butter Milk in 2032?

    Butter Milk is expected to be valued at 4.0 USD Billion in 2032.

    How much is the Dairy By-Products Market expected to grow in the APAC region by 2032?

    The APAC region is expected to reach a market value of 8.0 USD Billion by 2032.

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