Dairy Ingredients Market Report by Product, Source, Form, Application, and Region 2024-2032

The global dairy ingredients market size reached US$ 73.8 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 121.6 Billion by 2032, exhibiting a growth rate (CAGR) of 5.6% during 2024-2032. The increasing global demand for protein-rich food, growing awareness of health and nutrition, rapid expansion of the functional food sector, introduction of modern processing techniques, and the imposition of favorable policies and regulation by several governments are some of the major factors propelling the market.

Dairy ingredients refer to specialized components derived from milk and used to enhance various food products. It includes milk powder, whey proteins, casein, butter, ghee, fats, cheese, and lactose. They are widely used in bread, cakes, cookies, yogurt, ice creams, tea, coffee, hot chocolate, desserts, confectionery, processed food, infant formula, functional food, and nutritional supplements. Dairy ingredients are cost-effective and versatile products that aid in enhancing flavor, improving texture, extending shelf life, stabilizing color, cost-effectiveness, and fortifying protein. They also enhance digestive health, support weight management, promote bone health, provide essential amino acids, and increase energy levels.

The introduction of modern processing techniques, which enable manufacturers to extract specialized ingredients more efficiently, is propelling the market growth. Furthermore, the widespread product adoption across various sectors, such as pharmaceuticals, cosmetics, and animal feed, is positively influencing the market growth. Additionally, the imposition of favorable policies and regulations by several governments across the globe encouraging the production of fortified and nutrient-rich food products is contributing to the market growth. Apart from this, the growing expenditure capacities of consumers, resulting in higher spending on premium and high-quality food products, are supporting the market growth. Moreover, the increasing emphasis on sustainability in the dairy industry, leading to the adoption of sustainable sourcing practices, is boosting the market growth. Besides this, the growing demand for natural and clean-label products is acting as another growth-inducing factor.

Dairy Ingredients Market Trends/Drivers:

The increasing global demand for protein-rich food

The rising demand for protein-enriched food products is one of the predominant factors driving the dairy ingredients market. Along with this, the heightened awareness of the essential role that protein plays in maintaining overall health, muscle growth, and body functionality is positively influencing the market growth. In line with this, dairy ingredients are rich in vital amino acids, vitamins, and minerals, which serve as an optimal source of protein for various age groups. Additionally, they can be integrated into numerous food products, such as sports nutrition supplements and everyday meals, which is further bolstering the market growth. Moreover, the ongoing consumer pursuit of high-protein diets due to the burgeoning fitness industry and an increase in health awareness campaigns are contributing to the demand for dairy ingredients.

The growing awareness of health and nutrition

The growth in the dairy ingredients market has been strongly influenced by the rising consumer awareness of health and nutrition. Individuals are becoming more conscious of their dietary choices and are actively seeking nutrient-rich, balanced diets. In line with this, dairy ingredients are acknowledged for their diverse nutritional profile, including essential vitamins, minerals, and proteins, which contribute to overall well-being. Furthermore, the easy accessibility to information, coupled with educational campaigns which emphasize preventive healthcare, is boosting the demand for dairy ingredients. Additionally, the changing consumer preferences has prompted manufacturers to formulate food products fortified with dairy ingredients, thus catering to the growing consumer demand for healthy food.

The rapid expansion of the functional food sector

The dairy ingredients market is further propelled by the robust expansion of the functional foods sector. Functional foods provide benefits beyond basic nutrition, often aiding in the prevention or management of diseases. Dairy ingredients are widely used as an integral part of these food products as they offer functionalities, such as digestive health support, immunity boosting, and weight management, among others. Furthermore, the growing prevalence of lifestyle-related diseases, which has stimulated interest in functional foods, is positively influencing the market growth. Additionally, the development of innovative processing technologies, which has allowed the creation of dairy-derived ingredients that retain more health-beneficial properties, is supporting the market growth. Moreover, the rising collaboration between researchers, food technologists, and manufacturers to formulate novel products that fit within the functional food category is contributing to the market growth.

Dairy Ingredients Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global dairy ingredients market report, along with forecasts at the global, regional and country levels from 2024-2032. Our report has categorized the market based on product, source, form and application.

Breakup by Product:

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

Others

Milk Powder dominates the market

The report has provided a detailed breakup and analysis of the market based on the product. This includes milk powders (skimmed milk powders and whole milk powders), milk protein concentrates and milk protein isolates, whey ingredients (whey protein concentrate (WPC), whey protein isolate (WPI), and hydrolyzed whey protein (HWP), lactose and derivatives, casein and caseinates, and others. According to the report, milk powder represented the largest segment.

Milk powder is dominating the market as it offers longer shelf life making it a preferred choice for both manufacturers and consumers. In line with this, it can be stored without refrigeration, reducing the overall costs of storage and transportation. Furthermore, it is a highly versatile ingredient used across a broad spectrum of food products, such as baked goods, beverages, and confectionery. Additionally, milk powder retains most of the nutrients found in fresh milk, such as vitamins, minerals, and proteins. Moreover, it can be easily reconstituted with water, making it a convenient nutritional option for various consumer segments. Apart from this, milk powder enables manufacturers to create tailored formulations to meet specific industrial requirements or consumer preferences.

Breakup by Source:

Milk

Whey

Milk dominates the market

The report has provided a detailed breakup and analysis of the market based on the source. This includes milk and whey. According to the report, the milk represented the largest segment.

Milk is dominating the market as it is a well-recognized source of essential nutrients, including proteins, fats, vitamins, and minerals. These nutrients are widely used in various food and beverage (F&B) applications, making milk a preferred base for extracting dairy ingredients. Furthermore, the components derived from milk, such as whey and casein, have a wide range of applications across industries, including food, pharmaceuticals, cosmetics, and more. Additionally, it is traditionally accepted as a part of the human diet, which contributes to its continued prominence as a primary source of dairy ingredients. Moreover, the introduction of modern extraction and processing technologies, which allowed the more efficient and diverse utilization of milk as a source of dairy ingredients, is propelling the market growth. Besides this, it is readily available and cost-effective compared to other potential sources of dairy ingredients, making it an attractive option for manufacturers.

Breakup by Form:

Dry

Liquid

Dry dominates the market

The report has provided a detailed breakup and analysis of the market based on the form. This includes dry and liquid. According to the report, dry represented the largest market segment.

The dry form is dominating the market as it offers a longer shelf life compared to its liquid counterparts. Its low moisture content makes dry dairy ingredients less prone to microbial spoilage, allowing for extended storage and reduced waste. Furthermore, the dry form of dairy ingredients is often more convenient to transport and handle. The reduction in weight and volume, relative to liquid forms, translates to lower shipping costs and easier storage. Additionally, it can be easily incorporated into various food products, such as tea, coffee, baked goods, and confectionery. Moreover, its powdered form allows for precise control over the quantity used, thus facilitating consistent product quality. Apart from this, dry forms generally exhibit greater stability across a range of temperatures and humidities, which makes it suitable for diverse geographic markets, including regions with challenging climate conditions.

Breakup by Application:

Bakery and Confectionery

Dairy Products

Infant Milk Formula

Sports and Clinical Nutrition

Others

The report has provided a detailed breakup and analysis of the market based on the application. This includes bakery and confectionery, dairy products, infant milk formula, sports and clinical nutrition, and others.

Dairy ingredients are widely used to add rich, creamy flavor to various bakery and confectionery products, such as pastries, chocolates, and cookies. Furthermore, they contribute to the soft, moist texture of cakes, muffins, and bread. Additionally, dairy ingredients are rich in essential nutrients, such as calcium, protein, and vitamins, which aid in enhancing the nutritional profile of bakery and confectionery products.

Infant formulas widely utilize dairy ingredients as they provide essential amino acids that are fundamental for muscle and tissue development. Furthermore, they are used to mimic the fat content found in breast milk, which plays a vital role in brain development and overall growth. Moreover, dairy ingredients supply essential vitamins and minerals, such as calcium, phosphorus, and Vitamin D, which are crucial for bone health. They also offer a wide spectrum of other nutrients necessary for various metabolic processes.

Breakup by Region:

North America

United States

Canada

Asia-Pacific

China

Japan

India

South Korea

Australia

Indonesia

Others

Europe

Germany

France

United Kingdom

Italy

Spain

Russia

Others

Latin America

Brazil

Mexico

Others

Middle East and Africa

Asia Pacific exhibits a clear dominance in the market, accounting for the largest dairy ingredients market share

The report has also provided a comprehensive analysis of all the major regional markets, which includes North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific represented the largest market segment.

Asia Pacific has witnessed rising demand for dairy and dairy-related products, which is boosting the market growth. Furthermore, the rising expenditure capacities of regional consumers, resulting in increased spending on nutritious and quality food products, is propelling the market growth. Besides this, the rising consumption of protein-rich foods and dairy products, owing to the changing consumer dietary preferences, is supporting the market growth. Apart from this, the escalating awareness of health and wellness in the Asia Pacific region, resulting in widespread interest in functional foods and beverages enriched with dairy ingredients, is positively influencing the market growth. Moreover, the imposition of supportive regulations and policies by the regional governments to promote the dairy industry is contributing to the market growth.

Competitive Landscape:

Leading diary ingredients companies are investing in cutting-edge research and development (R&D) to create innovative dairy ingredients. Furthermore, they are expanding their market presence by establishing local manufacturing facilities, partnerships, and distribution networks to tap into new consumer bases. Apart from this, top players are engaging in mergers, acquisitions, and partnerships with other companies in the industry to consolidate their market position, leverage synergies, and broaden their reach. Additionally, they are implementing sustainable practices throughout the supply chain, from sourcing to production, to meet the growing consumer demand for ethical products and enhance their brand reputation. Moreover, several market players are offering tailored solutions to various industries, such as food and beverage (F&B), pharmaceuticals, and cosmetics, to cater to specific customer needs, thereby strengthening client relationships and market share.

The report has provided a comprehensive analysis of the competitive landscape in the global dairy ingredients market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

Agropur Dairy Cooperative (Farmers Co-operative Dairy Limited)

Arla Foods Ingredients Group P/S

Aurivo Co-operative Society Limited

Dairy Farmers of America Inc.

Euroserum (Groupe Sodiaal)

Fonterra Co-operative Group Limited

Glanbia PLC

Hoogwegt Group B.V.

Lactalis Group

Megmilk Snow Brand Co. Ltd.

Royal FrieslandCampina N.V.

Saputo Inc.

Schreiber Foods Inc.

Volac International Limited

Recent Developments:

In October 2021, Agropur Dairy Cooperative (Farmers Co-operative Dairy Limited) announced the expansion of its plant in Little Chute to increase the production of cheese and dairy ingredients.

In August 2023, Arla Foods Ingredients Group P/S partnered with Novozymes to develop protein ingredients using precision fermentation.

In September 2022, Dairy Farmers of America Inc. secured funding of US$ 45 Million from the USDA to set up a low-carbon dairy pilot project.

Key Questions Answered in This Report

• 1. What was the size of the global dairy ingredients market in 2023?
• 2. What is the expected growth rate of the global dairy ingredients market during 2024-2032?
• 3. What are the key factors driving the global dairy ingredients market?
• 4. What has been the impact of COVID-19 on the global dairy ingredients market?
• 5. What is the breakup of the global dairy ingredients market based on the product?
• 6. What is the breakup of the global dairy ingredients market based on the source?
• 7. What is the breakup of the global dairy ingredients market based on the form?
• 8. What are the key regions in the global dairy ingredients market?
• 9. Who are the key players/companies in the global dairy ingredients market?