The dairy ingredients market size was estimated to account for a value of USD 63.6 billion in 2021 and is projected to grow at a CAGR of 7.2% from 2021, to reach a value of USD 89.9 billion by 2026. The growth of this market can be attributed to the growing protein demand from consumers, they prefer products with dairy ingredients as a source of protein. The market growth in APAC can be attributed to the increasing awareness of health and wellness among the consumers. The continual investment in technological advancement is influencing growth, thereby increasing the sales of dairy ingredients in the near future. Dairy-derived ingredients originate from real milk and have real value to consumers from a taste and nutrition perspective. Dairy ingredients derived from milk are available in various types, formats, sizes, and find wide application in food & beverage applications worldwide. Whey products are natural, functional, and high in nutrition, becoming the ingredient of choice for sports and performance product manufacturers. Citing the consumer inclination toward functional foods, whey ingredients are being incorporated in baked goods, confectionery items, beverages, dairy foods, meat products, and most importantly, nutraceuticals.

 

Whey protein isolates and demineralized whey proteins are experiencing bolstering demand due to the high protein level and versatile functionality. Asia Pacific is the largest and fastest-growing market for dairy ingredients.

 

By application, the bakery & confectionery segment is projected to dominate the dairy ingredients market during the forecast period. Based on applications, the bakery & confectionery segment accounted for the largest share in 2021 due to the multiple applications of dairy ingredients in the bakery industry. Non-fat dried milk and skim milk powder are popular substitutes for fresh fluid milk in the bakery and confectionery sector. Dairy ingredients are also used as claims on packaging to valorize baked goods better. Whey protein ingredients cater to delivering functionality and performance. Since fitness has become the new trend dairy formulations, mostly whey protein are gaining popularity among the younger generation. The increasing demand for dairy ingredients in Asia Pacific is driving the growth of the dairy ingredients market.

 

The global dairy ingredients market is dominated by Asia Pacific, which accounted for the largest share. Nowadays, a sedentary lifestyle and a hectic daily routine run parallel to the consumer focus on health, resulting in an extreme workout and heightened dependence on protein supplements. Dairy protein ingredients are being consumed for weight loss and muscle gain and provide maximum nutrition and nourishment. Veganism has captured a large section of the market in Europe and the US; however, dairy being a staple in India, retains its position as the major protein supplement. Globally, whey is being incorporated in the regular diet as natural bioactive substances have a positive influence on an individual’s health. Globally, the Asia Pacific market for dairy ingredients accounted for the largest share of nearly 32.84% in 2020.

 

The Asia Pacific region is projected to witness the highest growth during the forecast period. A large amount of milk is produced in the country, which gives the dairy ingredients market the potential to grow in the coming years. Owing to this large production, the region has immense potential for exports of dairy ingredients. Rapid urbanization, changing lifestyles, and the inclination of consumers toward nutritious food and beverages also contribute to the growth of the dairy ingredients market. Owing to the increasing consumer demands for convenience food and dairy products in the region, many major players are entering the market.