Dairy Ingredients Market - North America, Europe, EMEA, APAC : US, Canada, China, Germany, UK - Forecast 2023-2027

Dairy Ingredients Market Forecast 2023-2027

The Dairy Ingredients Market size is projected to increase by USD 29.36 billion  at a CAGR of 7.3% between 2022 and 2027. It also includes an in-depth analysis of drivers, trends, and challenges. The expanding consumption of bakery and confectionery items on a global scale is driving the growth of the worldwide market. This rising affinity for such products is boosting the demand for dairy ingredients. Furthermore, there is an increasing inclination towards frozen bakery goods like cakes, pastries, and pre-packaged muffins, owing to their extended shelf life and appeal to consumers. This shift in consumer preference is creating new business prospects and broadening the customer base for these products.

Dairy Ingredients Market Forecasting

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Market Segmentation

This market report extensively covers market segmentation by Type (milk powders, milk protein concentrates & isolates, whey ingredients, and others), Application (bakery and confectionery, dairy products, infant milk formula, and others), and Geography (APAC, Europe, North America, South America, and Middle East and Africa).The market is a significant sector in the global food industry, utilizing various dairy-based products and additives. These ingredients include but are not limited to Milk, Proteins (Whey, Casein), Lactalis (Lactose, Milk Powder), and Functional Ingredients (Fructo-oligosaccharides, Emulsifiers). The market is driven by the increasing demand for dairy products in various applications, such as Infant Nutrition, Nutritional Supplements, and Food & Beverages. Oats, Alteratives, Vegetarian, and Vegan alternatives are also gaining popularity in the market. The market is segmented based on Type, Application, and Region. The Asia Pacific region is expected to dominate the market due to the high consumption of dairy products in countries like India and China. The market is influenced by various factors, including consumer preferences, regulatory policies, and technological advancements. Bakery, Confectionery, and Cheese industries are major consumers of dairy ingredients. The market is projected to grow at a significant CAGR during the forecast period. The use of advanced technologies like Nanotechnology, Biotechnology, and Encapsulation is expected to revolutionize the market. The market players are focusing on innovation, product development, and strategic collaborations to gain a competitive edge.

By Type

• Milk powders
• Milk protein concentrates and milk protein isolates
• Whey ingredients
• Others

The market share growth of the milk powders segment will be significant during the forecast period. Powdered milk is used as an ingredient in many different foods, such as ice cream, buttermilk, yogurt, chocolate, sweets, pastries, soups and sauces. Milk powder contains 21 normal amino acids, protein elements and water-soluble minerals and vitamins. Lifestyle changes, the rise of social media, and the spread of the Internet have increased the consumption of processed and packaged foods, which has led to an increase in demand for milk powder.

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The milk powders segment was valued at USD 32.03 billion in 2017 and continued to grow until 2021. The increasing use of organic whole milk powder powder in bakery and confectionery products is one of the major growth factors of the milk powder market in the region. Because America is one of the largest bakery markets in the world. Consequently, the increasing use of milk powder in baked goods will positively affect the North American milk powder segment, which in turn will boost the growth of the regional milk market during the forecast period.

By Application

• Bakery and confectionery
• Dairy products
• Infant milk formula
• Others

The international dairy trade is experiencing significant growth due to the increasing popularity of plant-based dairy alternatives. Companies like Oatly are leading this trend. The shift towards plant-based options is driven by various factors, including the rising number of vegans and vegetarians, athletes seeking alternative sources of protein, and changing consumer preferences. Functional dairy ingredients, such as milk proteins (whey, casein), are in high demand for their emulsifying, foaming, and gelling properties. These proteins are used in various applications, including bakery and confectionery, where they contribute to taste, texture, appearance, and functionality.

Eurial Ingredients & Nutrition, Arla Foods, and Lactalis Ingredients are key players in this market. Plant-based dairy alternatives are also used in infant nutrition and various food categories, such as cream, cheese, sauces, dips, and sports drinks. Consumers are increasingly seeking natural, healthier options, with a preference for ingredients that support bone health, immune function, and energy metabolism. Milk proteins, milk powder, and functional ingredients like calcium, vitamin D, and vitamin B12 are essential for these applications. The millennial population is a significant market for these products, as they prioritize health and convenience.

By Type

The market, specifically milk powder, experiences significant growth due to rising consciousness towards nutritional needs and adoption of processed foods. Milk powder, a versatile ingredient, is utilized in various sectors including ice cream, baked goods, and protein supplements. With 36% protein content, it caters to the increasing demand for protein-rich products. The USAID reports an average nutritional profile of milk powder, comprising 52% carbohydrates, 1.3% calcium, 1.8% potassium, and 36% protein. The consciousness towards health and wellness drives the adoption of organic whole milk powder in protein supplements, contributing to the market expansion.

By Region

• APAC
• Europe
• North America
• South America
• Middle East & Africa

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APAC is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The market is experiencing significant growth due to global trends toward essential services, ready-to-eat foods, and functional food. Consumers in urban areas, which account for over 60% of China's, 86% of Australia's, and 92% of Japan's populations, are driving demand for dairy ingredients. Leading brands offer milk product fortified with nutrients like whey in aqueous solution, benefiting human health. Functional food applications extend to cosmetics, with personal care products utilizing dairy derivatives for nutritional benefits. Industry insiders highlight heart health, blood pressure, and cholesterol level management as key areas of focus. Smaller players and leading brands alike leverage natural ingredients, such as prebiotics for gut health, and holistic diet quality, incorporating micronutrients like potassium, zinc, magnesium, iron, riboflavin, vitamin A, and folate into recipes. The buzz around healthier eating habits and industry growth prospects continues to fuel the dairy ingredient industry. Dairy ingredient companies also explore lactose derivatives, pharmaceutical preparations, and nutritional supplements.

Market Dynamics 

The market is being propelled by the ever-evolving food industry and the increasing awareness of health and wellness among consumers. Milk proteins, such as casein and whey protein, are gaining prominence due to their beneficial properties, including promoting bone health, enhancing immune function, and supporting energy metabolism. Additionally, the market is witnessing a surge in the demand for dairy ingredients fortified with essential nutrients like calcium, vitamin D, and vitamin B12, catering to health-conscious consumers seeking functional foods.

Furthermore, there is a notable trend towards the incorporation of dairy ingredients in a wide range of food and beverage products, including butter, cream, cheese, and fortified foods. With the rising popularity of high-protein diets and sports nutrition products, whey protein ingredients and milk protein isolates are witnessing increased utilization in sports drinks, high-protein food, and whey-based sports nutritional supplements. Moreover, the market is experiencing significant growth in the production of dairy ingredients for infant formulas, baby cereals, and bottled baby food, catering to the nutritional needs of infants and toddlers. This trend is expected to continue driving the growth of the market in the foreseeable future.

Our researchers analyzed the data with 2022 as the base year, along with the key trends, and challenges. A holistic analysis of drivers, trends, and challenges will help stakeholders in the value chain refine their marketing strategies to gain a competitive advantage.

Key Market Driver

Rising consumption of bakery and confectionery products

The global market is being propelled by the surging consumption of bakery and confectionery items. The global market is experiencing significant growth due to the increasing consciousness and adoption of bakery and confectionery products among consumers. Frozen bakery items, such as cakes, pastries, muffins, and croissants, have gained popularity for their extended shelf life and convenience. This trend is particularly driven by changing lifestyles and longer workdays. The use of Individual Quick-Freeze (IQF) technology in bakery products is projected to create new opportunities in the industry. Moreover, the rising consumption of ready-to-eat foods worldwide, fueled by hectic schedules, is expected to boost the demand for dairy ingredients, including protein supplements, during the forecast period.Anticipated growth avenues in the industry include the implementation of individual quick-freeze (IQF) technology to enhance bakery product shelf life. The market is set to flourish as busy lifestyles drive the demand for ready-to-eat foods and subsequently boost dairy product consumption.

Major Market Trends 

Robust demand for organic food products

The Market share is witnessing a strong demand for organic food products as consumers lean towards natural and healthier choices. The organic dairy ingredients market is experiencing substantial growth due to heightened consumer consciousness and adoption of healthier, more sustainable dietary choices. This shift in consumer preferences is driven by an increasing number of individuals seeking to address health concerns, such as diabetes, high blood pressure, cardiovascular diseases, and obesity. As a result, entrepreneurs are investing heavily in the organic sector to meet this demand. Protein supplements derived from organic dairy sources have gained significant traction in this context, as consumers prioritize nutritional value and ethical production methods.The market is poised for substantial growth due to the global surge in organic food preference.

Significant Market Challenge

Rising vegan population

The shift in consumer's eating habits to a vegan diet is declining the demand for dairy-based foods and beverages.The consciousness towards animal welfare and ethical eating is driving the adoption of vegan diets, resulting in a decline in demand for dairy-based ingredients, including those used in protein supplements. In response, sports nutrition manufacturers are introducing plant-based alternatives, such as pea-protein powders, to cater to this trend. The US, Canada, and the UK markets, in particular, are witnessing significant growth in demand for dairy-free products, with plant-based food retail sales increasing by 27% in 2020, compared to the overall retail market growth rate of 15%. All these factors are expected to hinder market growth during the forecast period.

Dairy Ingredients Market Company Overview

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Savencia SA- The company offers a variety of cheeses, butter and butter blends, milk and cream, as well as dairy ingredients.
• Arla Foods Ingredients Group PS- The company offers dairy ingredients that are used for the production of clean-label yogurt or low-fat cheese, for example, or for protein enrichment in general.
• Aurivo Co operative Society Ltd.- The company offers dairy ingredients that include pasture-based milk product from sustainable Irish dairy farms.

The market analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Agropur Dairy Cooperative
• Dairy Farmers of America Inc.
• EUROSERUM
• Fonterra Cooperative Group Ltd.
• Glanbia Plc
• Hoogwegt
• Inner Mongolia Yili Industrial
• LACTALIS Ingredients
• MEGMILK SNOW BRAND Co. Ltd.
• Morinaga Milk Industry Co. Ltd.
• Nestle SA
• Royal FrieslandCampina NV
• Saputo Inc.
• Schreiber Foods Inc.
• The Kraft Heinz Co.
• Volac International Ltd.
• Gujarat Cooperative Milk Marketing Federation

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Type Outlook 
  • Milk powders
  • Milk protein concentrates and milk protein isolates
  • Whey ingredients
  • Others
• Application Outlook 
  • Bakery and confectionery
  • Dairy products
  • Infant milk formula
  • Others
• Region Outlook
  • APAC
    • China
    • India
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • North America
    • The U.S.
    • Canada
  • South America
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa.

Market Analyst Overview

The market is experiencing growth due to various factors such as health-conscious consumers seeking high-protein food with nutritional properties. Whey protein is particularly popular among fitness enthusiasts and those interested in muscle health and immune function. Dairy ingredients like caseinates and serum protein concentrate are known for their amino acid profile and anti-aging properties. They are also used in infant formulas and protein-rich food launches.

Bone health is a key concern for the geriatric population, leading to increased demand for dairy ingredients fortified with calcium and vitamin D. Child growth and immunity improvement are other areas where dairy ingredients play a crucial role. Operational efficiency in manufacturing processes and capital investments in clean whey and organic farming are driving market growth. Taste and texture are important factors for consumer acceptance of dairy ingredients in products like protein bars and dips. The market is also influenced by global and European consumers, as well as millennials seeking functional ingredients in their food and beverage products. Business processes and manufacturing footprint are considerations for companies like Grenade and Kellogg. Regulatory bodies like the U.S. FDA and the Food and Agriculture Organization are involved in setting organic standards and ensuring food safety in dairy ingredients. Overall, the market is diverse, catering to a wide range of consumer needs and preferences.

The market is experiencing robust growth driven by various factors, including the increasing demand for high-protein food and snacking options among active lifestyle consumers. Leading companies like Arla Food amba and Groupe Lactalis are capitalizing on this trend by offering functional whey protein and natural nutritional solutions. Furthermore, the market is witnessing a surge in the demand for dairy ingredients fortified with essential nutrients like calcium, vitamin D, and vitamin B12 to meet the health needs of consumers. With the rising popularity of healthier foods and beverages, dairy ingredients play a vital role in providing functionality, flavor, and nutritional benefits to a wide range of food products, including bakery and confectionery items, beverages, and personal care products.

This market is also influenced by factors such as the growing millennial population, increasing emphasis on appearance and stress reduction, and advancements in dairy processing technology, leading to innovations in dairy ingredients and alternatives. As a result, the industry is experiencing significant developments, with a focus on producing nutritionally enhanced foods and beverages to meet the evolving preferences and functional needs of consumers worldwide.

Market Scope
Report Coverage	Details
Page number	158
Base year	2022
Historic period	2017 - 2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 7.3%
Market growth 2023-2027	USD 29.36 billion
Market structure	USD Fragmented
YoY growth 2022-2023(%)	7.08
Regional analysis	APAC, Europe, North America, South America, and Middle East and Africa
Performing market contribution	APAC at 41%
Key countries	US, India, China, Germany, and France
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Agropur Dairy Cooperative, Arla Foods Ingredients Group PS, Aurivo Co operative Society Ltd., Dairy Farmers of America Inc., EUROSERUM, Fonterra Cooperative Group Ltd., Glanbia Plc, Hoogwegt, Inner Mongolia Yili Industrial, LACTALIS Ingredients, MEGMILK SNOW BRAND Co. Ltd., Morinaga Milk Industry Co. Ltd., Nestle SA, Royal FrieslandCampina NV, Saputo Inc., Savencia SA, Schreiber Foods Inc., The Kraft Heinz Co., Volac International Ltd., and Gujarat Cooperative Milk Marketing Federation
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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