Dairy Ingredients Market Research Report

Dairy Ingredients Market Size:

The global dairy ingredients market size reached USD 78.0 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 124.8 Billion by 2033, exhibiting a growth rate (CAGR) of 5.4% during 2025-2033. The market is primarily driven by the growing demand for dairy-based products owing to their high nutritious value, expanding milk production, growing population and urbanization, and rising dairy consumption.

Dairy Ingredients Market Analysis:

• Major Market Drivers: The market is growing due to rising consumer consciousness regarding the health benefits of dairy components such as calcium, protein, and vitamins. Additionally, the increased demand for dairy-based products is shifting dietary and lifestyle choices among customers across the globe.
• Key Market Trends: The functional dairy ingredients market growth is driven by the health advantages of these ingredients and the changing trend toward clean label and organic ingredients, which satisfy customer demands for sustainable and all-natural goods.
• Geographical Trends: Asia Pacific is leading the market growth due to growing urbanization, disposable income, and consumer awareness. Furthermore, the growing market demand in North America and Europe is driven by the acceptance of protein-rich dairy products and a strong focus on quality, innovation, and strict regulations across the region.
• Competitive Landscape: Some of the major companies in dairy ingredients industry 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., and Volac International Limited, among many others.
• Challenges and Opportunities: The growing concerns about allergies and lactose intolerance are some challenges that insist on the creation of substitute formulations and processing methods. Dairy ingredients market recent opportunities includetechnology to lower costs, increase production efficiency, and improve the nutritional value of dairy components.
   

Dairy Ingredients Market Trends:

Rising Consumption of Dairy Products

Based on data from the Economic Research Service (ERS) of the U.S. Department of Agriculture (USDA), the average American consumed around 667 pounds of dairy products in 2021. American-style cheese increased by 0.5 pounds, butter by 0.2 pounds, and yogurt by 0.7 pounds, among other dairy items that are witnessing significant growth. Moreover, the market for dairy components is expanding due to the increased demand for dairy-based products, which is indicated by the consistent growth in dairy consumption. Additionally, dairy substances including lactose, whey proteins, and milk powder are necessary for a variety of culinary products, including baked goods and baby formula. Manufacturers are reacting to consumer changing preferences and demand by adding additional dairy components and diversifying their product lines as people consume more dairy. Thus, this has led to innovation in product offerings, such as lactose-free dairy products and high-protein dairy snacks to meet the needs of customers who are health-conscious and have dietary limitations. Hence, the dairy ingredients business is investing more in manufacturing capacity and technology to improve productivity and product quality which is resulting in a favorable dairy ingredients market outlook.

Increased Milk Production

The projected average values for the number of milk cows, milk production per cow, and total milk output in 2024 increased to 9.345 Million head, 24,330 pounds, and 227.3 Billion pounds, respectively, according to an update from the U.S Department of Agriculture (USDA) on May 16, 2024. Similarly, projections show that the costs of butter and Cheddar cheese would rise, while the prices of nonfat dry milk and dry whey will fall. As a result, the total projected price of $21.20 per hundredweight (cwt) for all milk in 2024 has increased by $0.30. In comparison to the previous year, 2025 is expected to see a rise in milk output due to increased projections for the size of the dairy herd and milk yield per cow. This secure consistent and plentiful supply of raw materials is required to produce different dairy products such as caseinates, lactose, whey proteins, and milk powders. Along with this, the market is stabilized, and raw material costs are more predictable and potentially lower due to the plentiful supply of milk, which is beneficial for businesses when it comes to financial planning and budgeting. As a result, raw materials also allow businesses to develop and grow their product lines by adding specialty dairy components that cater to certain dietary requirements and health-conscious consumers.

Growing Population and Urbanization

The 7.6 billion population is expected to increase to 8.6 billion by 2030, 9.8 billion by 2050, and 11.2 Billion by 2100, according to a United Nations report. According to the research, there is an annual rise of almost 83 million people, which implies that population expansion is ongoing on its current trend. Additionally, the growing urbanization rates are influencing the market expansion for dairy ingredients. Moreover, convenient and wholesome food alternatives are in high demand as more people move into cities, which is fueling the market's expansion. Along with this, easy-to-prepare and health-conscious items are preferred in metropolitan lives due to busy schedules, and higher disposable incomes, resulting in the adoption of dairy ingredients for their nutritional benefits, including high-quality protein and essential vitamins and minerals. At present, urbanization is driving supermarkets and convenience stores, enhancing the accessibility of dairy-enriched products to a broader consumer base, thus generating positive dairy ingredients market revenue.

Dairy Ingredients Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country levels for 2025-2033. 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 accounts for the majority of the market share

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.

As per the dairy ingredients forecast, milk powder is widely used in a variety of food and beverage applications globally. It is recognized for its long shelf life, affordability, convenience, practicality, and capacity to hold onto nutritional value are the main reasons for its appeal. Milk powder is a frequently used component in the production of dairy products, confections, baby formula, and bakeries. It provides producers with a dependable way to improve the flavor, texture, and nutritional value of their products. Moreover, the dairy ingredients demand is significantly increasing due to the growing popularity of milk powder. As per the USDA, on 12 March 2024, the National Health Commission (NHC) and the State Administration for Market Regulation (SAMR) of the People’s Republic of China (PRC) collaboratively issued 47 fresh or revised national standards concerning food safety, along with six modifications. Among these standards is the latest version of the National Food Safety Standard for Milk Powder and Modified Milk Powder GB19644-2024 which is set to take effect from 8 February 2025. This updated standard applies to various forms of milk powder (whole, skimmed, and semi-skimmed) and modified milk.

Breakup by Source:

• Milk
• Whey
   

Milk holds the largest share of the industry

A detailed breakup and analysis of the market based on the source have also been provided in the report. This includes milk and whey. According to the report, milk accounted for the largest market share.

Milk serves as a fundamental source for numerous dairy ingredients, providing the raw material for an extensive array of products ranging from milk powders to cheese and butter. Its versatility and widespread availability make it a cornerstone of the dairy industry, catering to various consumer demands and preferences across the globe. As a primary source, milk is gaining traction and shaping the dynamics of the dairy Ingredients market, driving innovation, and meeting the evolving needs of consumers and industries alike. Hence key players are introducing advanced product variants to meet these needs. Another example in dairy ingredients market recent developments is December 2023, Denkavit Group from the Netherlands and Volac International Limited from the UK finalized a deal for Denkavit to acquire Volac's Milk Replacer business. It was carefully considered by companies as a strategic step forward due to their mutual desire to collaborate with a partner who shares similar aspirations and principles. The aim is to elevate the Volac milk replacer business to new heights through this partnership.

Breakup by Form:

• Dry
• Liquid
   

Dry represents the leading market segment 

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 segment.

Dry forms, encompassing powders like milk powder, whey powder, and milk protein concentrates, are influencing the market growth. It is gaining traction due to its ease of handling, longer shelf life, and versatility in applications across various food and beverage sectors. Additionally, the demand for dry dairy ingredients remains robust due to their widespread usage in bakery, confectionery, infant nutrition, and sports nutrition products. Consequently, advancements in drying technologies have enhanced the quality and functionality of dry dairy ingredients, further amplifying their appeal to manufacturers and consumers.

Breakup by Application:

• Bakery and Confectionery
• Dairy Products
• Infant Milk Formula
• Sports and Clinical Nutrition
• Others
   

A detailed breakup and analysis of the market based on the application have also been provided in the report. This includes bakery and confectionery, dairy products, infant milk formula, sports and clinical nutrition, and others.

According to the dairy ingredients market forecast, bakery and confectionery are essential in enhancing the texture, flavor, and nutritional profile of bakery and confectionery products. Butter, milk powders, cream, and various types of cheeses are widely used in cakes, cookies, chocolates, and other baked goods, providing richness, moisture, and a creamy taste. Additionally, whey proteins are utilized for their functional properties, such as emulsification and foaming, contributing to the texture and structure of these products.

Moreover, dairy products encompass several products, including yogurt, cheese, ice cream, and flavored milk. Dairy ingredients such as milk, cream, and cheese are the primary components of these products, providing essential nutrients like calcium, protein, and vitamins. Along with this, ingredients like stabilizers and emulsifiers help maintain the texture and consistency of dairy products, ensuring a smooth and creamy mouthfeel.

Infant milk formula requires dairy ingredients for the formulation of infant milk formula. It is essential for providing essential nutrients necessary for the healthy growth and development of infants. Moreover, several ingredients like skimmed milk powder, lactose, and whey proteins are carefully selected and blended to mimic the composition of breast milk, ensuring optimal nutrition for newborns and infants who are not breastfed. Besides this, quality and safety are essential to meet stringent regulatory standards and ensure the well-being of infants.

Sports and clinical nutrition use dairy ingredients due to their high-quality protein content, amino acid profile, and bioavailability. Additionally, whey protein is favored for its rapid absorption and muscle-building properties, making it a popular ingredient in protein bars, shakes, and supplements for athletes and fitness enthusiasts. Moreover, dairy ingredients are also used in clinical nutrition to formulate specialized products for medical conditions such as malnutrition and gastrointestinal disorders, providing easily digestible nutrients and promoting recovery and overall health.

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 leads 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 include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific was the largest regional market for dairy ingredients.

As per the dairy ingredients market overview, Asia Pacific is dominating the market due to the growing population, evolving dietary preferences, and increasing disposable income. This robust market presence of this region is propelled by rising urbanization, growing health consciousness, and an expanding food and beverage industry. As consumers in countries like China, India, and Southeast Asia continue to embrace dairy-based products, the demand for dairy ingredients including milk powder, whey proteins, and lactose is experiencing an upward trajectory. Consequently, key market players are strategically focusing on expanding their production capacities and distribution networks in the Asia Pacific region to capitalize on their immense growth potential. According to the in June 2023, MEGMILK SNOW BRAND Co., Ltd. based in Shinjuku, Tokyo disclosed its attainment of halal certification for specific products such as skim milk powder bulk, butter unsalted bulk frozen PY, butter ferment unsalted bulk frozen, produced at its Horonobe Plant situated in Horonobe-cho, Teshio-gun, Hokkaido. The attainment of halal certification is a strategic move aimed at enhancing sales across Asia and diversifying distribution avenues for local dairy goods. Additionally, it aims to facilitate the export of halal-compliant products to Southeast Asian nations, serving as essential ingredients in items catering to the halal market.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the major dairy ingredients companies 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. etc.
  
  (Please note that this is only a partial list of the key players, and the complete list is provided in the report.)
   
• The key players are enhancing the industry through various strategies. They are heavily investing in research and development (R&D) to innovate new products that cater to evolving consumer preferences, such as lactose-free and plant-based alternatives. Additionally, they focus on sustainability initiatives to reduce environmental impact and ensure the welfare of dairy farmers. Collaborations with food manufacturers and retailers help expand market reach and distribution channels. Moreover, key players prioritize quality control and traceability throughout the supply chain to meet stringent regulatory standards and maintain consumer trust. These concerted efforts aim to drive growth, competitiveness, and sustainability within the dairy ingredients industry. For instance, on 14 March 2024, Arla Foods Ingredients presented innovative strategies to enhance the nutritional profile of cheese. The company introduced a low-fat alternative for individually packaged cheese slices utilizing fat-mimicking proteins found in Nutrilac® FO-7065, which is enriched with milk mineral concentrate Capolac, and each 20g slice offers calcium content equivalent to that of a large glass of milk. It also introduced cream cheese, offering a smooth texture and rich flavor with a significant reduction in fat content compared to traditional recipes which leverages high-quality whey proteins such as Nutrilac® QU-7650 and CH-4560 and provides essential amino acids essential for a balanced diet. These two novel recipe concepts demonstrate the effectiveness of its solutions in addressing these requirements. These concepts, formulated with premium dairy ingredients, enable manufacturers to substitute milk fat with beneficial milk proteins while simultaneously boosting calcium levels.

Dairy Ingredients Market News:

• 24 January 2024: Schreiber Foods Inc. received the inaugural International Dairy Foods Association (IDFA), Workplace of the Year Award during the Dairy Forum hosted by IDFA in Phoenix, Arizona. Co-sponsored by IDFA and Dairy Processing magazine, this accolade acknowledges an exemplary IDFA member organization annually, highlighting its initiatives in fostering a conducive work environment for its employees.
• 8 March 2024: Agropur announced that 14 of its outstanding cheeses earned medals at the esteemed World Championship Cheese Contest, held from March 5-7 in Madison, Wisconsin, USA. Jean-Phillipe Asselin, President of Cheese, US, expressed immense pride in the cheesemaking teams for their remarkable achievements in this year's competition. He also commended their steadfast commitment to consistently delivering top-notch quality to customers daily.
• 6 May 2024: The Provincial Government is offering a $10 Million loan to aid the establishment of a new dairy co-operative within Canada as per the Newfoundland, and Labrador Canada. Additionally, Minister Loveless revealed a plan to offer a $10-Million loan to the Co-op, aiming to aid in the acquisition of Agropur's fluid milk processing and distribution facility in Mount Pearl, which encompasses the renowned Central Dairies brand.

Dairy Ingredients Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the dairy ingredients market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global dairy ingredients market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the dairy ingredients industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.