Dairy Ingredients Market Size Anticipated to Grow $89.9 Bn by 2026, at a CAGR of 7.2%: Report by MarketsandMarkets(TM)

Chicago, May 15, 2023 (GLOBE NEWSWIRE) -- The global dairy ingredients market size was valued at USD 63.6 billion in 2021. The market is estimated to expand to USD 89.9 billion by 2026, exhibiting a CAGR of 7.2% over the projected period. This growth is fueled by the increasing demand for dairy-based products and the growing trend towards protein-rich diets. The market is poised to offer a diverse range of dairy products, paving the way for players in the industry to create innovative and irresistible offerings that cater to the evolving tastes of consumers. MarketsandMarkets™ provides this information in its research report, titled "Dairy Ingredients Market Global Forecast, 2021-2026".

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Key Industry Development:

One of the key industry developments in the dairy ingredients market is the rising demand for functional ingredients. Consumers are increasingly looking for dairy products that offer additional health benefits, such as improved digestion, enhanced immune function, and reduced inflammation. To meet this demand, manufacturers are developing dairy ingredients that are rich in probiotics, prebiotics, and other functional components.

Report Scope & Segmentation:

Key Takeaways:

• Dairy ingredients market size was valued at USD 63.6 billion in 2021.

• One of the primary drivers of the dairy ingredients market is the rising demand for high-protein and functional ingredients. Consumers are increasingly seeking dairy products that offer additional health benefits beyond basic nutrition, such as improved digestive health and immune function.

• The milk powder segment is estimated to see the largest growth in the dairy ingredients market, in terms of value.

• The dairy ingredients market is highly competitive, with numerous players operating in the industry. Key players include Groupe Lactalis, Arla Foods, Saputo, Dairy Farmers of America, Kerry Group etc.

• The increasing demand for dairy ingredients in Asia Pacific is driving the growth of the dairy ingredients market.

Drivers and Restraints:

Increasing awareness about health and wellness

Consumer preferences are gradually shifting from junk food and fast food to nutritional diets. This shift to healthy diets is being witnessed due to the increasing aging population, coupled with rising health issues. This has led to increased demand for protein-based ingredients, such as dairy ingredients, for use in nutritional foods. This health and wellness trend will act as a key driving factor, which is set to fuel the consumption of dairy ingredients.

Owing to the growing consumer awareness toward health gain, the demand for protein in the daily diet is increasing, which has exponentially propelled the market for dairy proteins. In 2019, the International Food Information Council Foundation (IFICF) conducted a consumer survey in North America about diet preferences. About 48% of consumers said that they often include dairy products in their daily meals as a source of protein. The below diagram depicts the share of each category in the daily meals of North American consumers.

Growing demand for alternatives, such as plant protein

The most popular alternatives for dairy are plant-based beverages, which are gaining popularity as substitutes for milk and milk products. Consumers are adopting a dairy-free diet due to the increasing incidences of lactose intolerance, allergies from milk or milk-based products, and a shift toward vegan diets and healthy lifestyles. The growing demand for dairy alternatives is posing a challenge for the growth of the dairy ingredients market.

Peas, beans, nuts, soy, seeds, and lentils are rich sources of plant proteins. Hence, plant protein is an active substitute for dairy ingredients, leading to competition in different segments, such as snack bars and beverages. Soy is being increasingly used in baked goods, beverages, and dairy products. The markets for products containing soy protein and various ingredients are primarily driven by natural health benefits. The growth in the demand for plant protein is because consumers perceive plant protein as an economical source of protein compared to dairy ingredients. Plant proteins also help manufacturers in controlling costs, thereby increasing profitability. For instance, soy protein can easily be incorporated into various foodstuffs without changing taste and quality.

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Dairy Ingredients Segments:

The milk powder segment is estimated to see the largest growth in the dairy ingredients market, in terms of value.

Milk powder, proteins, milk fat concentrates, lactose & its derivatives, and other types (milk and whey peptides, dairy protein fractions, other proteins, and colostrum) are some of the most common types of dairy ingredients. Among these types, the milk powder segment typically accounts for the largest share in the market. Milk powder is a direct substitute for fluid milk and is used in a variety of applications, including bakery, dairy, and infant nutrition. Skimmed milk powder forms the core of the Hotel Restaurant Catering (HoReCa) industry. Due to the COVID-19 pandemic, the dairy industry has seen a decline in sales and an accumulation of unsold milk powder because of lockdowns and changes in consumer behavior.

The dry form segment is estimated to account for a larger market share among the different forms of dairy ingredients, in terms of value.

Dry dairy ingredients are manufactured from either milk or whey. Milk-based dairy ingredients include milk powder, casein, caseinates, and milk protein concentrates, while lactose and its derivatives, whey protein concentrates, and whey protein isolates are derived from whey. Milk ingredients are loaded with essential nutrients (amino acids and minerals) in a dry form that is easily absorbed by the body. They are used in various dietary and therapeutic contexts, such as low-calorie food, sports nutrition, and infant formula. Milk powder is used mainly in chocolate products, bread, buns, pastries, and sweets. Skimmed milk powder is used mainly in dairy products containing reconstituted milk (yogurt, milk-based desserts, and ice creams), chocolate products, baby milk formula, and animal feed. The transportation and storage costs of dry ingredients are low, which results in the reduced cost of the final products. As a result, they are highly preferred by manufacturers. Also, they are readily available on the market and are easy to use. All these properties make them a popular ingredient form.

Regional Insights:

The North American dairy ingredients market is driven by a high demand for functional ingredients, such as protein concentrates and isolates. Consumers are also looking for healthier options, which has led to a rise in demand for low-fat and non-fat dairy ingredients. In addition, the use of dairy ingredients in the foodservice industry has increased, as consumers seek out convenient and nutritious options.

The European dairy ingredients market is focused on high-quality ingredients, such as cheese and butter. The region also has a strong emphasis on sustainability, which has led to a demand for ingredients that are environmentally friendly. In addition, there is a growing trend towards natural and clean label ingredients, which has driven demand for organic and non-GMO dairy ingredients.

The Asia Pacific dairy ingredients market is growing rapidly, due to an increasing demand for dairy products and ingredients. China is the largest consumer of dairy ingredients in the region and is driving demand for high-quality ingredients such as whey protein. There is also a trend towards healthier and more convenient options, which has led to an increase in demand for functional ingredients.

The Latin American dairy ingredients market is driven by a high demand for dairy products, particularly cheese and milk powder. The region has a large agricultural industry, which has led to a rise in domestic production of dairy ingredients. However, the market is also influenced by global commodity prices, which can lead to fluctuations in demand.

List of Key Players in Dairy Ingredients Market:

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Frequently Asked Questions (FAQs):

What is the projected market value of the global dairy ingredients market?

The global dairy ingredients market size is projected to reach USD 89.9 billion by 2026.

What is the estimated growth rate (CAGR) of the global dairy ingredients market for the next five years?

The global dairy ingredients market is expected to grow at a compound annual growth rate (CAGR) of 7.2% from 2021 to 2026.

What are the major revenue pockets in the dairy ingredients market currently?

The Asia Pacific region accounted for the largest size in the global dairy ingredients market in 2020 and is projected to reach USD 32.1 billion by 2026. The Asia Pacific region is projected to grow at the highest CAGR of 8.7% during the forecast period in the global dairy ingredients market.

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