Global Dairy Ingredient Market Research Report, 2030

Market Dynamic

Market Drivers • Rising Demand for Protein-Rich Diets: One of the primary drivers of the global dairy ingredients market is the increasing global awareness of the importance of protein in daily diets. Consumers across both developed and developing nations are becoming more health-conscious, which has fueled demand for dairy-based proteins such as whey and casein. These ingredients are widely used in sports nutrition, functional foods, and dietary supplements, especially among fitness enthusiasts and aging populations seeking muscle maintenance and recovery. This shift in dietary preferences continues to expand the market for dairy ingredients globally. • Growing Processed and Convenience Food Industry: Another major driver is the rapid growth of the processed and convenience food industry. Dairy ingredients like milk powder, cheese, cream, and butter are key components in ready-to-eat meals, bakery products, confectionery, and desserts. As urban lifestyles become busier and dual-income households increase, consumers are gravitating toward convenient food options, thus boosting demand for dairy ingredients as essential input materials in food manufacturing. Market Challenges • Lactose Intolerance and Rising Veganism: A significant challenge facing the dairy ingredients market is the increasing prevalence of lactose intolerance and the rising popularity of veganism. A large portion of the global population, particularly in Asia and Africa, is lactose intolerant, which limits the consumption of traditional dairy products. Furthermore, ethical concerns, environmental awareness, and health reasons have led many consumers to adopt plant-based alternatives. This trend is reducing the market share for traditional dairy ingredients and encouraging the development of non-dairy substitutes. • Fluctuating Raw Milk Prices and Supply Chain Issues: Volatility in raw milk prices and global supply chain disruptions present another major challenge. Dairy ingredient production depends heavily on the availability and cost of raw milk, which is influenced by weather conditions, feed costs, and regulatory factors. Any disruption in milk supply or increase in input costs directly impacts production costs and profit margins for dairy ingredient manufacturers. Additionally, transportation and storage challenges, especially for temperature-sensitive dairy products, further strain the supply chain. Market Trends • Innovation in Dairy-Based Functional Ingredients: A key trend in the market is the innovation and development of functional dairy ingredients aimed at specific health benefits. Manufacturers are increasingly focusing on creating dairy-based components enriched with probiotics, vitamins, and bioactive compounds to address consumer demands for immunity-boosting, gut health-supporting, and age-defying food products. These ingredients are gaining traction in the nutraceutical and functional food sectors, broadening the application scope of dairy beyond traditional uses. • Sustainable and Clean Label Product Development: Sustainability and clean label trends are significantly influencing product development in the dairy ingredients sector. Consumers are demanding transparency in sourcing, production practices, and ingredient lists. As a result, companies are investing in environmentally responsible dairy farming practices, reducing carbon emissions, and minimizing waste during production. Additionally, there is a shift toward using fewer, more natural ingredients without synthetic additives, driving innovation in clean label dairy products that appeal to health-conscious and eco-aware consumers.

Key Development

• In July 2024, Nestlé revealed it had developed a new process to reduce fat in dairy ingredients like milk powder by up to 60%, preserving quality, taste, and texture. The method used protein aggregates to replicate fat droplets for creaminess. • In May 2024, Epi Ingredients announced the launch of a new additive-free butter powder, aiming to meet growing consumer demand for clean-label and natural ingredients. This product innovation addresses the industry's need for versatile and convenient butter alternatives in various food applications. • In November 2023, Nutri Whey ProHeat, a new offering from FrieslandCampina Ingredients, was introduced to the medical nutrition market. This heat-stable whey protein is specially formulated using microparticulation technology, a process involving thermal treatment that creates small aggregates. This unique formulation ensures the stability of whey proteins even under high-temperature treatment conditions.