Northbrook, IL 60062 -- (SBWIRE) -- 08/21/2023 -- The dairy ingredients market is set to experience substantial growth, projected to achieve a Compound Annual Growth Rate (CAGR) of 7.2%. By the year 2026, the market is estimated to reach a value of $89.9 billion. This growth is primarily driven by the escalating demand for dairy-based products and the surging trend toward protein-rich diets.

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The market is on the verge of providing a wide array of dairy products, paving the way for industry players to craft innovative and irresistible offerings that cater to evolving consumer tastes. The food industry's demand for versatile dairy ingredients is propelled by the rising consumption of ready-to-eat and functional foods. This shift toward healthier eating habits has further propelled the need for functional food ingredients, particularly those rich in protein, low in fat and calories, and devoid of artificial additives.

Furthermore, the rise of plant-based alternatives to traditional dairy products and the increasing demand for natural and organic items contribute significantly to market expansion. These trends are expected to sustain the growth trajectory of the dairy ingredients market in the foreseeable future.

Dairy ingredients encompass a range of components derived from milk that find applications in food and beverage products. These ingredients are valued for their functional attributes, such as emulsification, foaming, thickening, and their nutritional contributions. Common dairy ingredients include whey protein, casein, lactose, and milk fat.

The milk powder segment is poised to experience significant growth within the dairy ingredients market in terms of value in 2021.

Milk powder, proteins, milk fat concentrates, lactose and its derivatives, as well as other types like milk and whey peptides, dairy protein fractions, and colostrum, are prominent categories of dairy ingredients. Among these, milk powder consistently commands the largest share in the market. Its applications span a range of industries, including bakery, dairy, and infant nutrition. The COVID-19 pandemic has brought challenges to the dairy industry, leading to decreased sales and excess unsold milk powder due to lockdowns and shifts in consumer behavior.

In 2021, the dry form segment is projected to capture a larger market share among different forms of dairy ingredients, in terms of value.

Dry dairy ingredients are derived from milk or whey and offer easy absorption of essential nutrients. They serve multiple dietary and therapeutic purposes, including low-calorie foods, sports nutrition, and infant formulas. The transportation and storage costs for dry ingredients are low, resulting in cost savings for final products. This makes them a favored choice for manufacturers.

The cow segment is expected to account for the largest market share in 2021 among livestock.

Cows are preferred for milk production due to their cost-effectiveness and higher milk yield compared to other livestock. Dairy ingredients manufactured from cow's milk are more readily available and easier to produce than those from buffalo or goat milk. Cow's milk is less viscous, making it conducive to deriving various dairy ingredient forms.

Rising demand for functional foods presents opportunities for dairy ingredient manufacturers in emerging markets.

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The Asia Pacific region dominates the dairy ingredients market, with rapid growth expected. Increased health awareness has driven the demand for functional and fortified foods, spurring the need for dairy ingredients.

The dairy ingredients market report highlights the marketing strategies, development approaches, and product portfolios of leading industry companies. Prominent players include FrieslandCampina, Groupe Lactalis, Arla Foods, Saputo, Fonterra Co-operative Group, Dairy Farmers of America, Kerry Group, and more.

The dairy ingredients market is characterized by its versatility, nutritional value, and adaptability to diverse food and beverage applications. It responds to health trends, offers plant-based alternatives, and caters to natural and organic preferences, reflecting its dynamic and competitive nature.

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