Dairy Ingredients Market Size

Global Dairy Ingredients Market Overview

Dairy Ingredients Market Size was valued at USD 70,545 Million in 2023. The Dairy Ingredients industry is projected to grow from USD 75,024 Million in 2024 to USD 1,35,791.9 Million by 2032, exhibiting a compound annual growth rate (CAGR) of 7.70% during the forecast period (2024 - 2032). Rising importance of nutritional enrichment in food & beverages because of increasing awareness towards maintaining a healthy lifestyle among individuals is expected to have a positive impact over the next eight years. Rising consumption of protein fortified functional food products by vegetarians to supplement their protein requirements is projected to have a strong impact on the market. Increasing demand for protein supplements in food items has resulted in new product launches by food & beverage companies including Kellogg, which is expected to fuel the demand for whey and milk powder.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Dairy Ingredients Market Trends

• Increasing Demand for Nutritious and functional food products

The rising consumer desire for wholesome and useful food products is one factor driving the growth of the worldwide dairy ingredients market. The important nutrients proteins, vitamins, minerals, and amino acids are abundant in dairy components. Numerous food products, including infant formula, baked goods, confectionary, sports nutrition, and dietary supplements, are made with these substances. Consumers are looking for food products that offer extra nutritional benefits as their focus on health and wellness increases. By improving the nutritional profile and practical qualities of diverse foods, dairy ingredients meet this requirement. The demand for dairy ingredients around the world has increased because of consumers’ growing preference for nutritious and useful food items. Additionally, the demand for dairy components in the processed food sector has also increased because of changing lifestyles and an increase in the consumption of convenience foods brought on by urbanization. The rising urban population and shifting dietary trends in emerging nations are now major factors in the expansion of the global dairy ingredients industry.

Dairy Ingredients Market Segment Insights

Dairy Ingredients Product Type Insights

The Dairy Ingredients Market segmentation, based on product type, includes Milk powders, Milk Protein Concentrate and Milk Protein Isolate, Whey Ingredients, Lactose, and others. The Milk Powders segment accounted for the largest market share in 2020, with a market value of USD 27,341.8 million; it is expected to register a CAGR of 8.6% during the forecast period. The growth of dairy ingredients in the milk powder segment has been substantial. Milk powder offers convenience, extended shelf life, and versatility, making it a popular choice for various applications. The demand for milk powder is driven by factors such as increasing consumer preference for long-lasting dairy products, rising demand for infant formula, and the convenience it provides in baking, cooking, and beverage preparation. Additionally, the growing popularity of milk powder as an ingredient in sports nutrition products and as a dairy alternative in vegan and lactose-free formulations has further fueled its growth., making it a practical choice for various culinary applications.

Figure 1: Dairy Ingredients Market, by product type, 2022 & 2032 (USD Million)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Dairy Ingredients Form Insights

The Dairy Ingredients Market segmentation, based on Form, includes Powder, Liquid. The Powder segment accounted for the largest market share in 2020, with a market value of USD 56,412.5 million; it is expected to register a CAGR of 7.7% during the forecast period. Powdered form of dairy ingredients, which is obtained by removing the moisture content from liquid protein in dairy products. This process helps to increase the shelf life of the milk protein and makes it easier to transport and store. The dry form of dairy ingredient is used as an ingredient in various food and beverage products, including sports nutrition products, infant formulas, bakery products, dairy products, and confectionery items.

Figure 2: Dairy Ingredients Market, by form, 2022 & 2032 (USD Million)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Dairy Ingredients Category Insights

The Dairy Ingredients Market segmentation, based on Category, includes Organic, Regular. The Regular segment accounted for the largest market share in 2020, with a market value of USD 51,834.7 million, it is expected to register a CAGR of 6.4% during the forecast period. The demand for regular dairy ingredients remains strong and continues to be a staple in consumer diets worldwide. Regular dairy ingredients such as milk, cheese, butter, and yogurt are widely consumed and incorporated into various culinary applications. For instance, in many households, milk is an essential part of daily breakfast routines, used in cereal, coffee, or tea. Regular dairy ingredients are favored for their taste, versatility, and nutritional value, providing essential nutrients like calcium, protein, and vitamins. Despite the increasing popularity of alternative dairy products, regular dairy ingredients maintain a significant market share due to their long-established presence and familiarity among consumers.

Figure 3: Dairy Ingredients Market, by Category, 2022 & 2032 (USD Million)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Dairy Ingredients End Use Insights

The Dairy Ingredients Market segmentation, based on End Use, includes Commercial, Residential. The Commercial segment accounted for the largest market share in 2020, with a market value of USD 44,196.0 million, it is expected to register a CAGR of 7.4% during the forecast period. The commercial sector's demand for dairy ingredients remains high, as they are essential components in many food products such as bakeries, confectionery, and frozen desserts. Dairy ingredients like milk, cream, cheese, and butter are popular choices in the foodservice industry due to their taste, texture, and functional properties. One instance of a recent product launch in the commercial sector is Nestlé's "Carnation Breakfast Essentials Probiotics" drink, which contains dairy ingredients such as milk and whey protein. This product targets health-conscious consumers seeking a convenient and nutritious breakfast option, highlighting the demand for dairy ingredients in the commercial sector catering to health-conscious customers.

Figure 4: Dairy Ingredients Market, by End Use, 2022 & 2032 (USD Million)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Dairy Ingredients Distribution Channel Insights

The Dairy Ingredients Market segmentation, based on Distribution Channel, includes Supermarkets/Hypermarkets, Convenience Stores, Specialty Stores, Online, and Others. The Supermarkets/Hypermarkets segment accounted for the largest market share in 2020, with a market value of USD 22,278.5 million; it is expected to register a CAGR of 7.3% during the forecast period. The demand for dairy ingredients in the Supermarkets & Hypermarkets segment remains robust. These retail establishments cater to a wide range of consumers seeking convenience and variety in their shopping experience. Dairy ingredients like milk, cheese, yogurt, and butter are prominently displayed in dedicated sections within supermarkets and hypermarkets. They are popular choices for customers looking to stock their pantries and refrigerators with essential ingredients for cooking, baking, and snacking. The availability of different brands, types, and flavors of dairy ingredients in these stores reflects the ongoing demand and preferences of consumers who value the convenience and extensive selection offered by supermarkets and hypermarkets.

Figure 5: Dairy Ingredients Market, by Distribution Channel, 2022 & 2032 (USD Million)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Dairy Ingredients Application Insights

The Dairy Ingredients Market segmentation, based on Application, includes Bakery and Confectionary, Food and Beverages, Infant Milk Formula, and Others. The Food and Beverages segment accounted for the largest market share in 2020, with a market value of USD 14,708.2 million; it is expected to register a CAGR of 7.9% during the forecast period. The application of dairy ingredient in the beverage industry is becoming increasingly popular due to its nutritional properties and functional benefits. dairy ingredient is commonly used in the production of various beverages, including sports drinks, dairy-based drinks, and nutritional drinks. Sports drinks are one of the most common beverages that use dairy ingredients. The high protein content in dairy ingredients helps in muscle recovery and growth, making it a popular ingredient among athletes and fitness enthusiasts.

Figure 6: Dairy Ingredients Market, by Application, 2022 & 2032 (USD Million)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Dairy Ingredients Regional Insights

By Region, the study segments the market into North America, Europe, Asia Pacific, South America, and the Rest of World. The Asia Pacific segment accounted for the largest market share in 2020, with a market value of USD 18,756.1 million, it is expected to register a CAGR of 9.1% during the forecast period. Increase in disposable income, rapid urbanization and growing awareness about health and wellness is a major driver of the dairy industry in this region. Asia-Pacific has the largest consumer base for dairy products in the world. The growing population in the region and rising middle class especially in countries such as India and China have doubled the consumption of dairy products over the last 30 years. The APAC dairy products market is projected to grow at over 10%. In this region liquid milk is the most consumed dairy product, however it is adopted to other dairy products includes yogurt and sweetened or flavored milk as well. India and Indonesia are the fastest growing dairy markets in this region.

Figure 7: DAIRY INGREDIENTS MARKET SHARE BY REGION 2022 (%)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

The North America dairy ingredients market is expected to grow at a significant CAGR from 2022 to 2028. Increase in athlete population and increased health and diet consciousness among youth has increased the growth in dairy ingredients market of North America. Inclusion of technology and new features by vendors has proven to have a positive impact in the industry. The demand for dairy products in North America is not only as food & beverages but also for animal feed, pharmaceuticals & nutraceuticals, and personal care. Moreover, there has been an expansion in whole milk powder manufacturing catering to the export global customer demand. Europe has more than 12,000 milk processing and production facilities across the continent, being a significant player in the global food and beverage market. In terms of consumption, EU countries have the largest consumer base in the global market. The European Whey Producers Association has stated that Europe ranks 1 as dairy producer with 300 registered kinds of cheese and dairy products. Recently due to decreasing milk prices production has declined. However, Western Europe especially is likely to witness a significant growth in the dairy ingredients market due to rising GDP and higher standards of living. The dairy ingredients market in the rest of the world (ROW) region, which includes countries in South America, the Middle East, and Africa, is expected to grow steadily in the coming years. The market is driven by increasing awareness of the health benefits of protein consumption, rising disposable incomes, and the growing demand for functional foods and supplements.

Dairy Ingredients Key Market Players & Competitive Insights

The Dairy Ingredients Market is anticipated to register a CAGR of 7.3% during the review period. The key factors driving the growth in the market are the increasing preference for snack products that have higher protein content along with the shift in the trend of consuming organic and non-meat protein products. However, the growing preference and launch of plant-based protein ingredients and the veganism culture are anticipated to hamper the growth of the market during the forecast period. Nevertheless, the technological advancements by the key players coupled with escalating milk production are creating lucrative opportunities for manufacturers in the Dairy Ingredients Market. The significant rise in the incidence of lactose intolerance in the global population might pose a risk for the players in the market during the forecast period. The Dairy Ingredients Market is highly competitive, with key industry players adopting various strategies such as acquisition and product launches to strengthen their market positions. Most companies in the market are expected to focus on increasing their investment in production facilities and advanced technologies to augment & strengthen their position in the market. The growth of market players is dependent on various factors including urbanization, economic trends, supply chain issues, demand from end-use industries, market conditions, and overall industry development.

Key Companies in the Dairy Ingredients Market include

• FrieslandCampina N.V. (Netherlands)


• Arla Foods (Denmark)


• Glanbia Plc (Ireland)


• Fonterra Co-operative Group Limited (New Zealand)


• Kerry Group plc (Ireland)


• Dairy Farmers of America Inc. (United States)


• Groupe Lactalis (France)


• Co-Operative Limited (Ireland)


• Saputo Inc. (Canada)


• Volac International Ltd. (the United Kingdom)


• Nestle (Switzerland)


• Danone S.A.(France)

Dairy Ingredients Industry Developments

April 2023: Volac introduced a new ingredient in the Europe market namely Volactive Pro2O Ready-to-Mix (RTM). This product allows manufacturers in developing shakes that are clear in solution, thus manufacturing refreshing new fruit-based flavors, such as citrus and melon, for consumers to explore.

November 2022: Fonterra Group launched lactoferrin under the SureStart brand of NZMP. Lactoferrin is a whey protein that has a characteristic ability to bind iron which is most widely used in infant formula preparations.

Dairy Ingredients Market Segmentation

Dairy Ingredients Product Type Outlook

• Milk Powders


• Milk Protein Concentrate and Milk Protein Isolate


• Whey Ingredients


• Lactose


• Others

Dairy Ingredients Form Outlook

• Powder


• Liquid

Dairy Ingredients Category Outlook

• Organic


• Regular

Dairy Ingredients End Use Outlook

• Commercial


• Residential

Dairy Ingredients Distribution Channel Outlook

• Supermarkets/Hypermarkets


• Convenience Stores


• Specialty Stores


• Online


• Others

Dairy Ingredients Application Outlook

• Bakery and Confectionary


• Food and Beverages


• Infant Milk Formula


• Others

Dairy Ingredients Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  • Mexico
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • UK
  
  
  • France
  
  
  • Spain
  
  
  • Italy
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • India
  
  
  • China
  
  
  • Japan
  
  
  • South Korea
  
  
  • Indonesia
  
  
  • Vietnam
  
  
  • Australia & New Zealand
  
  
  • Philippines
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of World
  
  
  
  • South America
  
  
  • Middle East
  
  
  • Africa