Global Functional Milk Market - 2023-2030

Overview

Global Functional Milk Market reached US$ 26.6 billion in 2022 and is expected to reach US$ 42.7 billion by 2030, growing with a CAGR of 6.1% during the forecast period 2023-2030.

The global functional milk market has undergone significant growth and evolution in recent times, reflecting shifts in consumer preferences and an increased emphasis on health and wellness. Functional milk products go beyond traditional dairy offerings, incorporating additional nutrients, probiotics, and bioactive compounds to deliver tangible health benefits. The expansion of this market is driven by a set of key factors that align with changing consumer expectations.

Furthermore, the functional milk market benefits from ongoing innovation in product development and marketing strategies. Manufacturers continually introduce fresh formulations, an array of flavors, and versatile packaging options to cater to diverse consumer preferences. From convenient on-the-go formats to eco-friendly packaging solutions, these innovations resonate with the dynamic lifestyles and values of contemporary consumers.

Similarly, North America dominates the functional milk market, capturing the largest market share of over 1/3rd. The growth is due to consumers are actively seeking products fortified with immune-boosting nutrients and probiotics, aiming to fortify their body's defenses. The awareness of the intricate relationship between gut health and immune function has further increased the appeal of functional milk, positioning it as a proactive choice for consumers striving to bolster their overall vitality.

Dynamics

Health and Wellness Trends

A pivotal force propelling the functional milk market is the prevailing health and wellness trend. Consumers are increasingly health-conscious and are actively seeking dairy products that go beyond mere sustenance. Functional milk products have emerged to meet this demand by offering additional health benefits, such as enhanced immunity, improved digestion, and cardiovascular well-being.

The surge in consumer awareness is underscored by a growing recognition of the profound connection between dietary choices and overall health. Consequently, consumers are willing to invest in products that align with their wellness objectives. Functional milk items often encompass supplementary ingredients like probiotics, vitamins, minerals, and omega-3 fatty acids, which are reputed to confer a spectrum of health advantages.

Consumers are increasingly integrating functional milk into their daily diets, viewing it as a convenient and enjoyable means to incorporate health-boosting constituents. In response, manufacturers are actively introducing a diverse array of functional milk products customized to cater to distinct health needs, thereby stimulating growth within the functional milk market.

Aging Population and Bone Health

The burgeoning global population of elderly individuals constitutes another substantial driving force behind the functional milk market, particularly concerning bone health. With advancing age, the preservation of robust and resilient bones assumes paramount importance. Essential nutrients for bone health, such as calcium and vitamin D, are often incorporated into functional milk products in fortified forms.

In light of the aging demographic, there exists heightened awareness regarding conditions like osteoporosis and the significance of proactively safeguarding bone health. Functional milk featuring augmented calcium and vitamin D content is perceived as a practical and efficacious means to nurture strong bones. This is especially pertinent for elderly individuals who may encounter challenges in fulfilling their calcium and vitamin D requisites through regular dietary sources alone.

According to United Nations Office for the Coordination of Humanitarian Affairs, the proportion of the population in the world that is aged 65 or older is projected to rise from 10% in 2022 to 16% in 2050. On a global scale, the number of people 65 and older is projected to exceed that of individuals under the age of 5 by 2050 and be almost equal to that of those under the age of 12.

Hence, manufacturers have introduced fortified milk products tailored specifically to promote bone health. These products are primarily marketed to older consumers, with a focal point on the vital role played by maintaining bone density and diminishing the likelihood of fractures. The aging population's concern for bone health is galvanizing the demand for these specialized functional milk offerings.

Competition from Plant-Based Alternatives

A substantial constraint within the functional milk market is the escalating competition from plant-based milk substitutes. In recent times, there has been a rapid shift in consumer preferences toward plant-based alternatives, that is driven by environmental concerns, lactose intolerance, ethical considerations, and dietary choices by the consumers.

Plant-based milk substitute products such have gained immense popularity and market share. These alternatives often position themselves as healthier and more sustainable options, challenging the conventional dairy industry, including functional milk products. Consequently, consumers seeking specific health benefits may opt for plant-based alternatives that align with their dietary inclinations.

Additionally, plant-based alternatives are not subjected to the same regulatory constraints as dairy products, affording them greater ease in making specific health claims. This divergence in labeling and health assertions can further influence consumer perceptions and choices. The plant-based milk alternatives has motivated traditional dairy companies to enter the plant-based market, leading to the creation of hybrid products that amalgamate the advantages of dairy and plant-based ingredients.

Regulatory Complexities

A significant challenge impeding the functional milk market's growth pertains to the intricate and strict regulatory framework governing food and beverage products. In response to consumers' heightened demand for transparency and accurate product information, regulatory authorities have imposed rigorous labeling requirements. These requirements pose a particular hurdle for functional milk products, which frequently incorporate various additional nutrients, probiotics, and bioactive components.

The difficulty arises from the necessity to precisely label and describe these functional ingredients while ensuring adherence to regulatory standards. Different regions and countries uphold distinct regulations and interpretations of terms like "functional," "fortified," and "probiotic." Manufacturers must adeptly navigate the regulatory landscape to maintain compliance while successfully conveying the health benefits of their functional milk products to consumers.

Segment Analysis

The global functional milk market is segmented based on product, form, function, distribution channel and region.

Increased Demand for Functional Milk for Immunity and Disease Management

The immunity and disease management segment held 34.5% of the global market share. Within the functional milk market, there is a notable upswing in the demand for products tailored to immunity and disease management. This surge is primarily driven by a heightened focus on health and wellness among consumers across the world.

According to the DSM Immunity report, consumers nowadays seem more concerned than ever with their daily health and welfare, especially in the wake of the pandemic. In comparison to fewer than 20% five years ago, 27% of global dairy-based vitamin and mineral supplement releases between April 2021 and April 2022 made an immune health claim. To assist dietary supplement companies in providing consumers with immunology solutions catered to their lifestyle and medical requirements.

Consequently, there has been a notable surge in the consumption of dairy items enriched with nutrients believed to enhance immunity. Manufacturers have responded by introducing specialized functional milk offerings that cater to this specific demand, capitalizing on the increased consciousness of immunity and disease prevention. The aging demographic across the world serves as another driving force behind the demand for functional milk products geared toward immunity and disease management.

Older individuals are often more vulnerable to various health challenges and are actively seeking products that can aid in maintaining their well-being and vitality. Functional milk items targeting immunity and disease management are viewed as a convenient and enjoyable means for seniors to incorporate health-boosting nutrients into their diets. Furthermore, the prevalence of chronic diseases has led consumers to seek dairy products that offer preventive and therapeutic benefits, further elevating the demand for functional milk.

Geographical Penetration

Demand for Fortified Milk Products in North America

The North America functional milk market held the largest market share of 40.3% in 2022 in the functional milk market analysis. The North American region demonstrates a robust and evolving demand for functional milk products, driven by several key factors. Foremost, consumers in the region have developed a heightened awareness of health and wellness, leading to a growing interest in dairy products that go beyond basic nutrition.

Functional milk products, enriched with essential nutrients, probiotics, and bioactive compounds, seamlessly align with this health-conscious mindset. As individuals increasingly prioritize their well-being, the demand for these products continues to surge. Furthermore, North America is experiencing a noticeable upswing in awareness regarding digestive health, a factor directly influencing the demand for functional milk.

A significant segment of the population in the region grapples with digestive discomfort and conditions such as lactose intolerance and irritable bowel syndrome (IBS). Consequently, consumers actively seek dairy products that provide relief and promote a balanced gut microbiome. Functional milk, especially those featuring probiotics and lactose-free options, has gained substantial popularity. These products are perceived as effective in aiding digestion, alleviating bloating, and enhancing overall digestive well-being.

In March 2023, Dairy Farmers of America (DFA) introduced the "first-ever" probiotics-fortified UHT milk as a less expensive substitute for kefir and kombucha. The product, created in collaboration with Good Culture, according to Dairy Farmers of America (DFA), is the first lactose-free, long-life fluid milk available on the US market that also contains probiotics that help the microbiota.

Competitive Landscape

The major global players in the market include: Danone, Nestle SA, Danone S.A., Yoplait, Chobani LLC, Organic Valley, General Mills, Inc., The Dannon Company, Clover Stornetta Farms, Lifeway Foods and Horizon Organic.

COVID-19 Impact Analysis

The global functional milk market experienced a range of effects due to the COVID-19 pandemic. Initially, the pandemic prompted significant shifts in consumer behavior. Panic buying led to a surge in sales of essential items, including dairy products, as consumers stockpiled necessities. However, as lockdowns and restrictions were implemented, consumer purchasing patterns underwent changes.

One noticeable impact was the increased demand for long-lasting and shelf-stable milk products, such as UHT (ultra-high temperature) milk. Consumers, concerned about potential supply chain disruptions, turned to these products due to their extended shelf life. In contrast, perishable functional milk products like probiotic yogurt experienced a temporary decline in demand because of worries about product availability and perishability.

Additionally, the pandemic heightened the focus on health and wellness among consumers. This shift in mindset favored functional milk products, particularly those promoting immune support and overall well-being. Probiotic-rich milk gained popularity as consumers sought ways to strengthen their immune systems. Furthermore, calcium-fortified and lactose-free milk products found favor among consumers seeking to support bone health and alleviate digestive discomfort.

Russia-Ukraine War Impact Analysis

The Russia-Ukraine conflict has had regional repercussions on the functional milk market, particularly in Eastern Europe. Ukraine serves as a significant agricultural producer, including dairy products, and the conflict disrupted supply chains and trade routes. Export restrictions, logistical challenges, and uncertainty had adverse effects on the dairy industry in both countries.

Russian dairy producers responded by shifting their focus more toward the domestic market. Russia aimed to reduce its dependence on imported dairy products and invested in expanding its domestic production capacity. This change had implications for foreign functional milk brands operating in Russia, as they faced increased competition and had to navigate regulatory adjustments.

In Ukraine, the conflict disrupted dairy production and distribution, resulting in supply shortages and price fluctuations. This instability influenced consumer preferences, with some individuals turning to alternative dairy products such as milk substitutes. Overall, the Russia-Ukraine conflict introduced uncertainties in the Eastern European dairy market, impacting the production and distribution of functional milk products.

By Product

• Probiotic Milk
• Lactose-Free Milk
• Omega-3-Fortified Milk
• Calcium-Fortified Milk
• Others

By Form

• Powder
• Liquid

By Function

• Immunity & Disease Management
• Weight Management
• Clinical Nutrition
• Others

By Distribution channel

• Supermarkets/Hypermarkets
• Specialty Stores
• Convenience Stores
• E-Commerce
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico

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

• South America
  • Brazil
  • Argentina
  • Rest of South America

• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific

• Middle East and Africa

Key Developments

• In May 2023, With a "disruptive and new take on milk" Dairy Farmers of America (DFA) has launched a lactose-free probiotic milk. The farmer-owned dairy cooperative has partnered with cottage cheese start-up Good Culture to bring the product to life, and the milk will be sold under the Good Culture brand.
• In July 2022, In response to parents' requests for vegetarian and flexible diet options for their infants, Danone announced the introduction of the first-ever Dairy and Plants Blend baby formula. Almost 70% [69%] of parents now prefer their children eat more plant-based foods, and plant-based consumption is rising significantly, with over one-third [37%] of EU consumers selecting a vegan, vegetarian, or flexitarian diet.
• In December 2020, Promilk Yogfluid and Promilk B Max, two new functional milk proteins from Ingredia, offer more health-driven alternatives for creamy, very indulgent dairy products for on-the-go snacking. According to Ingredia, Promilk Yogfluid was created especially for consuming yogurts high in protein and has the ability to increase the protein content by up to 12%.

Why Purchase the Report?

• To visualize the global functional milk market segmentation based on product, form, function, distribution channel and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of functional milk market-level with all segments.
• The PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The global functional milk Market Report would provide approximately 69 tables, 71 figures and 202 Pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies