Dairy Ingredients Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Report Covers Dairy Ingredients Market Analysis and it is Segmented by Type (Milk Powders, Milk Protein Concentrates and Milk Protein Isolates, Whey Ingredients, Lactose and Derivatives, Casein and Caseinates, and Other Types), Application (Bakery and Confectionery, Dairy Products, Infant Milk Formula, Sports and Clinical Nutrition, and Other Applications), and Geography (North America, Europe, Asia-Pacific, South America, and Middle East and Africa). The market size and forecasts are Provided in value (USD million) for the above segments.

Dairy Ingredients Market Size

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Dairy Ingredients Market Summary
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Study Period 2019 - 2029
Market Size (2024) USD 62.50 Billion
Market Size (2029) USD 76.27 Billion
CAGR (2024 - 2029) 4.06 %
Fastest Growing Market Asia-Pacific
Largest Market Europe

Major Players

Dairy Ingredients Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Dairy Ingredients Market Analysis

The Dairy Ingredients Market size is estimated at USD 62.5 billion in 2024, and is expected to reach USD 76.27 billion by 2029, growing at a CAGR of 4.06% during the forecast period (2024-2029).

  • Dairy ingredients have been widely used in the food industry due to their functional and nutritional properties. For example, milk proteins, such as casein and whey protein, are often used as functional ingredients in food products due to their emulsifying, foaming, and gelling properties.
  • In addition, dairy ingredients are also rich in essential nutrients such as calcium, vitamin D, and vitamin B12, which are important for bone health, immune function, and energy metabolism. Fortifying foods with dairy ingredients can provide consumers with a convenient and accessible way to obtain these important nutrients. Moreover, dairy ingredients can also enhance the taste, texture, and appearance of food products, making them more appealing to consumers. For example, butter, cream, and cheese are commonly used in baked goods, sauces, and dips to provide richness and flavor.
  • Overall, the demand for functional and fortified foods has led to an increase in the use of dairy ingredients in the food industry as manufacturers seek to create products that are both nutritious and appealing to consumers. Ingredients, such as milk powder, are being used in infant formulas and sports drinks. The millennial population in the Asia-Pacific region is growing, so the demand for food and beverages is also rising. The trend of high-protein food and drinks has been rapidly gaining popularity worldwide. Manufacturers have been increasingly using protein claims in their food and drink launches due to the growing demand from health-conscious consumers.
  • Over the past few years, the number of high-protein food and drink launches has significantly increased, making it one of the fastest-growing claims in the food and drink market. This trend is driven by a growing awareness of the health benefits of protein, including its ability to promote satiety, build and repair muscles, and support overall health.
  • European consumers are actively seeking more milk protein in their meals, beverages, and snacks. The geriatric population in Germany has been increasing, with 22.09% of the population aged 65 and above in 2021, according to the Organization for Economic Co-operation and Development (OECD). This demographic trend has led to rising demand for medical and nutritional products to help maintain bone and muscle health among the elderly. Dairy ingredients are enriched with essential minerals such as calcium and phosphorus, crucial for bone health. Therefore, the demand for dairy ingredients has been increasing, as they are considered an important source of these minerals.
  • Additionally, dairy ingredients are a good source of protein, which is important for maintaining muscle mass and strength. The manufacturers of sports nutritional products widely prefer functional dairy ingredients like whey protein due to its wide availability, strong amino acid profile, and easy digestibility. Meanwhile, the consumption of sports nutrition has increased among fitness enthusiasts and active lifestyle consumers as it aids in gaining energy and muscle and supports weight management. Thus, the increasing demand for whey-based sports nutritional supplements is driving the growth of the dairy ingredients market.
  • Additionally, consumers and athletes are looking for natural and less processed nutritional solutions with proven benefits. Many dairy ingredient manufacturing companies are launching new nutritional solutions to support sports nutrition manufacturers. For instance, in December 2021, Lactalis Ingredients launched high-protein concepts with two native protein sources, including Ponativ's Native Micellar Casein and Pronativ's Native Whey Protein targeting sports nutrition and healthy aging.
  • US consumers are prompting food and beverage manufacturers to include functional whey protein in the packed food products as it helps to replace the high-fat ingredients and maintains the same flavor and texture similar to the original formulation. Thus, the growing consumer demand for whey protein in packed food products is further propelling the growth of dairy protein in the market.
  • There is a growing awareness among consumers about the benefits of dairy protein for maintaining a healthy lifestyle. Dairy proteins are rich in protein and have a superior content of amino acids. Ingredients such as whey protein, milk protein, and casein are also known for their anti-aging properties. Besides staying healthy, consuming dairy proteins also help reduce stress and improve immunity. They play a vital role in the growth of a child. As a result, the demand for dairy ingredients has increased globally.

Dairy Ingredients Market Trends

Increasing Milk Production Supporting the Demand for Dairy Ingredients

  • The demand for more functional food and beverage products, driven by consumers' interest in health and wellness, has led to an increase in the use of milk protein in the market. According to Food and Agriculture Organization Corporate Statistical (FAOSTAT) Database, India is the world's largest milk producer, with an output of over 209.6 million tons of cow's milk in 2021. Other large milk producers were the United States, with almost 102.62 million metric tons, and Pakistan, with around 60.8 million tons. The Asia-Pacific region's active milk production has supported the growth of its derivatives, such as milk protein concentrates, milk powder, and whey protein ingredients. Due to their digestibility properties, milk protein isolates are the most commonly used ingredient by infant food manufacturers for products such as baby cereals, bottled baby food, and others.
  • In 2021, manufacturers such as Lactalis launched organic whole milk powder ingredients with various applications across different end-user industries, such as the confectionery and bakery industries. This was done in response to the burgeoning demand from various end-user industries looking to formulate organic food products.
  • Additionally, dried milk protein concentrate is produced from skim milk using a combination of processes, such as ultrafiltration (UF), evaporation or nanofiltration, and spray drying. The increasing demand for milk protein concentrates is supported by steady growth in skimmed milk powder production in the market. The United States has registered an increasing production of skimmed milk powders, supporting the growth of skimmed milk concentrates and milk protein concentrates during the study period. 
  • In addition to consumer demand, government initiatives to support the dairy industry have played a significant role in increased production. For example, the National Programme for Dairy Development (NPDD) in India aims to strengthen the infrastructure for the production of high-quality milk and its products. The positive outlook of the dairy industry in the market, coupled with the increasing demand for protein-rich food and constant evolution in product launches, is actively accelerating the application of various dairy ingredients in the food and beverage industry. This trend is expected to continue gaining momentum during the forecast period.
Dairy Ingredients Market: Production of Skimmed Milk Powders, in Tons, By Country, Global, 2021

Europe Holds the Major Share

  • Europe dominates the dairy ingredients market, with countries like the United Kingdom, Germany, and France using high-concentrate dairy ingredients such as whey proteins and milk protein isolates. The increasing interest in health and wellness among consumers, especially in the sports industry, has driven the demand for dairy ingredients in supplements. Key players in the industry are focusing on developing new products that cater to the consumers' evolving requirements. For example, in December 2021, Euroserum launched SICAPRO 35, a 35% serum protein concentrate suitable for the formulation of infant formulas.
  • The increasing interest in protein as an ingredient is driven by fitness enthusiasts, particularly in Europe. The demand for mainstream health and wellness ingredients is also rising in the food and beverage sector. Countries like Germany and France have a significant demand for infant nutrition or baby formula that utilizes dairy proteins. Additionally, the region's strong coffee culture has contributed to the high demand for dairy ingredients, particularly in the preparation of creamers and whiteners for use in the food and beverage industry.
  • Furthermore, the trend of organic food consumption has led to new product developments. For instance, in 2021, Lactalis Ingredients launched organic whole milk powder in France, sourced exclusively from French dairy farms that adhere to organic farming specifications. The organic standards ensure a product free from additives like neutralizing agents, antibiotics, and preservatives.
  • Additionally, the growing consumer interest in high-protein snacking has resulted in the emergence of companies specializing in protein bars and confectionery. This trend is expected to continue to create growth opportunities in the dairy ingredients market. In March 2022, Mondelēz International acquired a significant majority interest in Grenade, a leading UK performance nutrition pioneer in the fast-growing high protein bar segment. Grenade is one of the category leaders in high-protein bars. Its Carb Killa has been the best-selling product in the segment, with a growing presence in the UK and availability across other regions, including North America and Asia Pacific.
Dairy Ingredients Market: Market Size (%), By Region, Global, 2022

Dairy Ingredients Industry Overview

The dairy ingredients market is highly competitive, with a large number of players operating in the industry. Arla Food amba, Fonterra Co-Operative Group Limited, Saputo Inc., Dairy Farmers of America, and Groupe Lactalis are some of the major players in the market. These companies are constantly innovating and expanding their product offerings to strengthen their presence in the market.

For example, in February 2022, Saputo Inc. announced a series of significant capital investments and consolidation initiatives to optimize and enhance its manufacturing footprint in its US Sector and International sectors. This move is part of the company's global strategic plan, which aims to improve operational efficiency and streamline business processes. Overall, the dairy ingredients market is highly dynamic, and companies must continually adapt to changing market conditions to stay competitive.

Dairy Ingredients Market Leaders

  1. Arla Foods amba

  2. Dairy Farmers of America

  3. Fonterra Co-Operative Group Limited

  4. Saputo Inc.

  5. Groupe Lactalis

*Disclaimer: Major Players sorted in no particular order

Dairy Ingredients Market Concentration
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Dairy Ingredients Market News

  • July 2022: NZMP, Fonterra's global ingredient business, entered into a joint venture with Tillamook County Creamery Association (TCAA) and Three Mile Canyon Farms in the US to launch Pro-OptimaTM, a grade A functional whey protein concentrate (fWPC), to the market.
  • May 2022: Arla officially inaugurated a new production plant at Pronsfeld Dairy in Germany. The expansion is Arla's biggest dairy investment and a key driver in meeting the growing international demand for sustainable, affordable, and nutritious dairy products. To help bridge this cap, Arla has invested EUR 190 million in the expansion of its dairy in Pronsfeld, Germany, to increase the production of primarily milk powder.
  • May 2022: Fonterra launched a new online dairy platform that makes it easier for ingredients customers to buy anything, from milk powder to specialty dairy proteins. It's called myNZMP and was introduced after customers asked for more convenience, more flexibility, and more information when ordering ingredients,

Dairy Ingredients Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Type

      1. 5.1.1 Milk Powders

        1. 5.1.1.1 Skimmed Milk Powders

        2. 5.1.1.2 Whole Milk Powders

      2. 5.1.2 Milk Protein Concentrates and Milk Protein Isolates

      3. 5.1.3 Whey Ingredients

        1. 5.1.3.1 Whey Protein Concentrate (WPC)

        2. 5.1.3.2 Whey Protein Isolate (WPI)

        3. 5.1.3.3 Hydrolyzed Whey Protein (HWP)

      4. 5.1.4 Lactose and Derivatives

      5. 5.1.5 Casein and Caseinates

      6. 5.1.6 Other Types

    2. 5.2 Application

      1. 5.2.1 Bakery and Confectionery

      2. 5.2.2 Dairy Products

      3. 5.2.3 Infant Milk Formula

      4. 5.2.4 Sports and Clinical Nutrition

      5. 5.2.5 Other Applications

    3. 5.3 Geography

      1. 5.3.1 North America

        1. 5.3.1.1 United States

        2. 5.3.1.2 Canada

        3. 5.3.1.3 Mexico

        4. 5.3.1.4 Rest of North America

      2. 5.3.2 Europe

        1. 5.3.2.1 United Kingdom

        2. 5.3.2.2 Germany

        3. 5.3.2.3 France

        4. 5.3.2.4 Russia

        5. 5.3.2.5 Italy

        6. 5.3.2.6 Spain

        7. 5.3.2.7 Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. 5.3.3.1 India

        2. 5.3.3.2 China

        3. 5.3.3.3 Japan

        4. 5.3.3.4 Australia

        5. 5.3.3.5 Rest of Asia-Pacific

      4. 5.3.4 South America

        1. 5.3.4.1 Brazil

        2. 5.3.4.2 Argentina

        3. 5.3.4.3 Rest of South America

      5. 5.3.5 Middle-East and Africa

        1. 5.3.5.1 United Arab Emirates

        2. 5.3.5.2 South Africa

        3. 5.3.5.3 Rest of Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Most Adopted Strategies

    2. 6.2 Market Share Analysis

    3. 6.3 Company Profiles

      1. 6.3.1 Arla Foods amba

      2. 6.3.2 Dairy Farmers of America

      3. 6.3.3 Sodiaal co-operative group

      4. 6.3.4 Fonterra Co-Operative Group Limited

      5. 6.3.5 Royal Friesland Campina

      6. 6.3.6 Kerry Group PLC

      7. 6.3.7 Kanegrade Ltd

      8. 6.3.8 Groupe Lactalis

      9. 6.3.9 Volac International Ltd

      10. 6.3.10 Hoogwegt International BV

      11. 6.3.11 Saputo Inc.

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability
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Dairy Ingredients Industry Segmentation

Dairy ingredients, such as milk powder, milk protein concentrate, whey protein, and casein, are a rich source of essential nutrients, including proteins, amino acids, carbohydrates, minerals, and probiotics. Each of these ingredients has wide applications in the food and beverage industries, including bakery products, confectionery, sports nutrition, and infant formulas.

The dairy ingredients market is segmented by type, application, and geography. Based on type, the market is segmented into milk powders, milk protein concentrates and milk protein isolates, whey ingredients, lactose and derivatives, casein and caseinates, and other types. The whey ingredients segment is further segmented into whey protein concentrate, whey protein isolate, and hydrolyzed whey protein. Based on application, the market is segmented into bakery and confectionery, dairy products, infant milk formula, sports and clinical nutrition, and other applications. Based on geography, the market is segmented into North America, Europe, Asia-Pacific, South America, and Middle-East and Africa.

 For each segment, the market sizing and forecasts have been done on the basis of value (in USD million).

Type
Milk Powders
Skimmed Milk Powders
Whole Milk Powders
Milk Protein Concentrates and Milk Protein Isolates
Whey Ingredients
Whey Protein Concentrate (WPC)
Whey Protein Isolate (WPI)
Hydrolyzed Whey Protein (HWP)
Lactose and Derivatives
Casein and Caseinates
Other Types
Application
Bakery and Confectionery
Dairy Products
Infant Milk Formula
Sports and Clinical Nutrition
Other Applications
Geography
North America
United States
Canada
Mexico
Rest of North America
Europe
United Kingdom
Germany
France
Russia
Italy
Spain
Rest of Europe
Asia-Pacific
India
China
Japan
Australia
Rest of Asia-Pacific
South America
Brazil
Argentina
Rest of South America
Middle-East and Africa
United Arab Emirates
South Africa
Rest of Middle-East and Africa
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Dairy Ingredients Market Research FAQs

The Dairy Ingredients Market size is expected to reach USD 62.50 billion in 2024 and grow at a CAGR of 4.06% to reach USD 76.27 billion by 2029.

In 2024, the Dairy Ingredients Market size is expected to reach USD 62.50 billion.

Arla Foods amba, Dairy Farmers of America, Fonterra Co-Operative Group Limited, Saputo Inc. and Groupe Lactalis are the major companies operating in the Dairy Ingredients Market.

Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).

In 2024, the Europe accounts for the largest market share in Dairy Ingredients Market.

In 2023, the Dairy Ingredients Market size was estimated at USD 60.06 billion. The report covers the Dairy Ingredients Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Dairy Ingredients Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

Dairy Ingredients Industry Report

Statistics for the 2024 Dairy Ingredients market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Dairy Ingredients analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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Dairy Ingredients Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)