Key Trends Shaping the Dairy Ingredients Market

The global dairy ingredients market is estimated to be valued at USD 53.8 billion in 2019 and is projected to reach USD 81.4 billion by 2025, recording a CAGR of 7.1%. The market is driven by various factors such as an increase in the awareness among consumers regarding healthy food and change in the lifestyle and increase in disposable income, which has enabled them to invest in health and health-related services and products.

The demand for dairy ingredients is high in the Asia Pacific region, especially in countries such as China and India. With the economy on the rise, the living standards of consumers in these countries are improving, which has enabled the purchase of functional and fortified foods. Milk production in the region has been high across the globe, despite the limited processing of milk to dairy ingredients in the region. The inclination toward healthy food has created the demand for the dairy ingredients in the region.

Established players are looking to tap the potential of emerging markets in the region. An increase in the millennial population in countries, such as India, has further driven the market for whey-based protein shakes and drinks, thereby increasing the demand for ingredients, such as whey isolates, whey concentrates, and milk powder. The aging population in countries such as China and Japan are investing in functional foods and beverages. The rise in the stress level and busy lifestyles among people has also increased the demand for ready-to-eat functional food and beverages. Thus, the demand for healthy snacks and drinks based on dairy ingredients, such as protein, has been further boosting the growth potential of the market.

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Dairy ingredients are used in various applications due to their versatile properties, such as emulsification and heat stability. They are also known to provide various characteristics, such as flavor, texture, and color to food and beverage products. Dairy ingredients are used in dips and ice creams to provide a rich texture and also used as browning agents in the bakery industry.

Companies have been investing heavily in R&D and new product launches to adjust the formulation of existing products and cater to customer requirements. Companies have been innovating food products with functional characteristics to benefit their customers. The rise in health concerns & resultant consumer demand for healthy products has been driving  these companies to invest more in research & development for dairy-based food and beverages. Top players, such as Friesland Campina (Netherlands) and Glanbia (Ireland), are continuously involved in research & development and new product launch activities to meet the increasing demand for dairy ingredients from various applications. In February 2019, Glanbia acquired Watson Inc. (Connecticut), which would provide its customers access to more knowledge, technologies, and better solutions. In October 2019, FrieslandCampina (Netherlands) entered into a partnership with the American dairy cooperative, United Dairymen of Arizona (UDA) (US), to meet the increasing consumer demand.

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Major players such as Glanbia (Ireland), Friesland Campina (Netherlands), Fonterra (Auckland), Arla (Denmark), and Kerry Groups (Ireland) in the dairy ingredients market are focusing on new product launches, expansions & investments, joint ventures, agreements, and partnerships to expand their global footprint.


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