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The Dairy Ingredients Market size is projected to increase by USD 35.3 billion at a CAGR of 8.08% between 2023 and 2028. The market is experiencing significant growth, driven primarily by the increasing consumption of bakery and confectionery products worldwide. This trend is fueled by the rising demand for premium and value-added food items, particularly in emerging economies. Additionally, the market is witnessing a surge in new product launches and strategic mergers and acquisitions (M&A) activities. Companies are investing in research and development to innovate and introduce new dairy ingredients that cater to evolving consumer preferences and dietary requirements. These factors collectively contribute to the dynamic growth of the market.
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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 33.80 billion in 2018. The increasing use of organic whole milk 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.
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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.
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.
Rising consumption of bakery and confectionery products drives the market. 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.
Moreover, 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. Hence, such factors are driving the market during the forecast period.
Robust demand for organic food products is a primary trend in the market. The market share is witnessing a strong demand for organic food products as consumers lean towards natural and healthier choices. The organic market is experiencing substantial growth due to heightened consumer consciousness and the adoption of healthier, more sustainable dietary choices. Oatly's plant-based dairy alternatives, popular among vegans and vegetarians for their emulsifying and foaming properties, are making waves in the international dairy trade and attracting attention from athletes seeking healthier options.
Moreover, 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. Hence, such factors are driving the market during the forecast period.
Rising vegan population is a major challenge hindering the market. The shift in consumer 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.
Moreover, 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.
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.
The market analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
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.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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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.
Further, 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.
Moreover, 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 |
164 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.08% |
Market growth 2023-2027 |
USD 35.3 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
7.26 |
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, Gujarat Cooperative Milk Marketing Federation Ltd., Hoogwegt, Inner Mongolia Yili Industrial Group Co. Ltd., LACTALIS Ingredients, MEGMILK SNOW BRAND Co. Ltd, Morinaga Milk Industry Co. Ltd., Nestle SA, FrieslandCampina, Saputo Inc., Savencia SA, Schreiber Foods Inc., The Kraft Heinz Co., and Volac International Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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