Global Milk Fat Fractions Market - 2023-2030

Market Overview

Milk Fat Fractions Market was valued at USD YY million in 2022. It is forecasted to reach USD YY million by 2030, growing at a CAGR of 6.45% during the forecast period (2023-2030).

Milk fat fractions are made through the fractional crystallization process using melted milk fat. Several milk products that feature different solid fat content are manufactured by a process known as the milk fractionation process. The fractions obtained from the milk have other physical and chemical properties, which enable the manufacturing of different milk products. Milk fat fractions comprise milk-derived products and milk fats.

Milk fat fractions are rich in vitamins and comprises milk fats and other milk-derived products, which play a vital role in the human diet as these are nutritious and contain vitamins such as K2 soluble vitamins, vitamin E, etc. Milk fat fraction helps cure other health issues such as diabetes, weight loss, digestive disorders, and colon cancer, resulting from increasing the demand in the food industry, which is likely to improve the application in the global market.

Market Dynamics: Growth in the milk fat fractions market, due to an increasing demand for bakery products

Fat ingredients such as butter and anhydrous milk fat have multiple functions in bakery products. They impart shortening, richness, tenderness and flavor while providing aeration for improved leavening and volume. They promote desirable structure and texture qualities such as flakiness in puffed pastries, pie crust and Danish pastry. Milkfat delivers lubrication to prevent the wheat gluten from adhering together, delaying staling. Milkfat also provides moisture retention for shelf-life improvement. Though butter is by far the fat source of choice for baking because of its flavor, it tends to have more variability in its functionality due to the method of manufacture. For this reason, milkfat fractionation to produce customized milkfat ingredients has shown better and more consistent functionality for baking.

Fractionated milk fat is a highly suitable butter substitute that provides stable product quality year-round, accelerating product penetration. It is also used to boost the nutritional value of bakery food products due to its high calcium and vitamin content. Due to moving consumption patterns, rising consumer desire for bakery products such as pastries, cookies, brownies, doughnuts, cakes, and biscuits would positively influence the milk-fat fractions market.

However, the availability of a considerable variety of milk fat fractions replacement, such as butter, is stifling the expansion of the market.

Market Segmentation: The bakery segment had the highest global milk fat fractions market share

In recent years, consumers have focused on their nutrition and health, giving increased attention to lifestyle. Thereby, interest in improving the foods has increased. Bakery products are considered the best for enhancing the nutritional process due to the daily caloric requirement given by bread (more than 50% of energy intake). One of the solutions is partially replacing wheat flour with other raw materials rich in nutritional ingredients. Composite flour technology represents mixing wheat with non-wheat flour, which contains high protein components for bakery technology. An essential class of raw materials is pseudocereals like amaranth, which have higher nutritional quality than cereals.

The manufacturers are developing and expanding their products due to the demand for bakery products. For instance, according to the CEO of Arla Foods Ingredients, the separation of milk's different proteins from whey previously relied on cheese making as whey is a by-product of this process. Now, by bypassing the cheese-making process, Arla's new patented milk fractionation technology allows for a more significant potential raw material pool and creates protein streams in a unique and fully controlled process with significantly reduced processing steps. A much more gentle processing of the milk, The milk fractionation process is being pioneered for infant formula at Arla Foods Ingredients' dairy to fulfill a growing demand for organic infant formula, a market estimated to increase by 14.1% in 2022 and 2023. Arla Foods Ingredients is using new technology to manufacture the organic Baby&Me® brand. Arla Foods Ingredients expected to launch its first organic private-label infant formula solutions based on the technology in 2022.

Geographical Penetration: Asia Pacific the dominating region during the forecast period

Asia Pacific is one of the largest regions in the milk fat fractions market. It is estimated to witness notable revenue growth to surpass USD YY million value by 2029. The abundance of raw materials and the expanding dairy industry are propelling product demand in the region. The increasing presence of food manufacturers, along with access to easy storage & transportation facilities due to integrated networks, is speculated to augment regional market development in the future.

According to Food and Agriculture Organisation, global milk production reached nearly 928 million tonnes in 2021, up 1.3 percent from 2020, driven by output increases in all geographical regions except Europe and Oceania, where production decreased. Milk volume increases were highest in Asia, followed by the Americas. The production growth rate in 2021 was the lowest registered since 2013. Since, milk fat fractions are widely used in the production of milk and milk based products, the market is likely to grow int this region.

Competitive Landscape:

Milk fat fractions market is a fragmented market owing to the presence of various local and global companies regulating industry growth. Some key players in the milk fat fractions market are Fonterra, TATUA, Glanbia Ireland, Friesland Campina, Royal VIV Buisman, Uelzena Ingredients, Flechard, CORMACO, MCT Dairies and Oleo Fats are implementing various marketing strategies, such as new product launches, geographical expansion, merger and acquisitions, partnerships and collaboration, to identify potential buyers. For instance, in May 2021, Ehrmann and FrieslandCampina signed an agreement for the acquisition by Ehrmann of Friesland Campina's Russian subsidiary Campina LLC. Both companies hold strong positions in different segments of the Russian dairy market. This strategic transaction accelerates Ehrmann's work in Russia and allows FrieslandCampina to focus on consumer markets elsewhere.

COVID-19 Impact: Positive impact on the global milk fat fractions market

There has been a slowdown in the wholesale food service markets due to the shutdown of hotels, restaurants, and schools. In some areas, their closure has curved the consumption and sales of dairy products such as milk, butter, curd, and cheese. The milkmen were also facing difficulties, as no one were ready to purchase milk from them due to the fear of getting infected by the coronavirus. There has been a disruption in the supply chain, causing various issues for the milk fat fractions manufacturing companies. Despite all these disruptions, the demand for dairy products like cheese, butter, and cream has increased for various reasons, one of which is the growing interest in home baking. Due to lockdown measures, there has been an increase in the demand for shelf-stable milk products, such as milk powder, Ultra-high Temperature (UHT) milk, and others.

For instance, According to Food and Agriculture Organization, Cheese purchases by China surged 30 percent in 2021, to 232 000 tonnes, mainly driven by the population's rapid growth in cheese consumption and the popularity of fast-food restaurants. Following a drop in 2020 due to COVID-19 market disruptions, imports recovered in the United States, reaching 188 000 tonnes in 2021. The United States sourced much of the substances from the European Union and concentrated on cheddar, mozzarella and parmesan, reflecting consumer preference and demand from the fast-food services sector. In Mexico, imports recovered and increased by 16 percent, reaching pre-pandemic levels mainly due to the reopening of the hospitality sector. Following a 12.4 percent increase in 2020, Russian Federation purchases reached 326 000 tonnes, up 4 percent year-on-year, sourced mainly from Belarus.

The global milk fat fractions market report would provide access to approximately 61 market data tables, 53figures and 170 pages.