A2 Milk Market Report

A2 grade milk is viewed as beneficial for infants since it enhances immunity and supplies essential nutrients needed for infants' growth and development. Furthermore, A2 protein can be found in breast milk, making A2-grade milk considered similar to breast milk. Consequently, this milk and its related products are more commonly being incorporated into baby formulas due to the similarity of the A2 beta-casein protein to that in breast milk. In addition, several corporations are utilizing A2 beta-casein milk for producing baby food. Multiple new types of baby food products are introduced annually by different manufacturers, increasing the demand for the products.

For instance, the ‘Baby's Only A2 Organic Milk Infant Formula’ is a type of formula made from cow's milk that contains primarily A2 beta-casein protein. However, based on product type, the A2 cow milk holds a significant share in the A2 milk market. The dairy industry heavily depends on cow milk production and infrastructure. The process of breeding cows, milking them, processing the milk, and distributing it to stores is a well-functioning system in the dairy industry. In the meantime, A2 milk sourced from goats, camels, buffalo, and sheep is not as widespread. In the cow milk industry, the A2 cow milk is an established market, thus, A2 cow milk maintains a leading role in the worldwide A2 milk industry.

The breeds that produce the A2 milk are less as compared to regular milk producer breeds. However, due to less supply of A2 milk and higher demand for milk will limit the market for A2 milk. As per one of the studies presented in NIH, in 2024 the Holstein and Ayrshire breeds will produce 63 and 67% A1 milk, while 35 and 33% A2 milk. In addition, the Indian-origin cow has the ability to produce A2 milk, but the production of A2 milk is again less, which creates a gap between supply and demand. The difference in supply and demand for A2 milk leads to higher prices for the final product, resulting in A2 milk being more costly than A1 milk. Thus, this premium price of A2 milk hampers the growth of the market for cost-sensitive consumers and limits the market growth.

Significant funds are needed for the breeding and identification of cows capable of producing A2 beta-casein milk. The genetic level testing is required to determine whether the breed is an A2 milk producer or not, and selective breeding practices further increase the overall production costs. However, as per one of the studies, the conventional practice of genetic testing, like gene sequencing, is employed in the identification of cows carrying the A2 β-casein gene responsible for producing A2 milk, a method that is both expensive and time-consuming.

Prominent industry players prioritize promotion strategies such as introducing new products, implementing mergers, and pursuing acquisitions to expand their consumer base and improve their company's product offerings. However, in July 2023, A Greener World (AGW), a non-profit association specifying food product certification, established Regenerative Certified status to the ‘Grassfed a2 Milk 2% Reduced Fat Milk’ and ‘Grassfed a2 Milk Whole Milk’ by the a2 Milk Company. This certification shows dedication to sustainability and regeneration by assessing assistance in different areas such as water, soil, air, infrastructure, biodiversity, social responsibility, and animal welfare.

In April 2023, the 'A2 Milk Company' released two new products, 'A2 milk Grassfed 2% Reduced Fat Milk' and 'A2 milk Grassfed Whole Milk', which are now offered by retailers in the United States. In addition, in June 2023, during the 16th Global Dairy Congress in London on June 21-22, Vinamilk, a prominent Vietnamese dairy company, left a significant imprint. Participating for the third time, Vinamilk showcased Vietnam's dairy sector and recounted its remarkable journey in the industry. At the event, Vinamilk received recognition by winning the "Best Dairy Alternative 2023 Award" for its product, Vinamilk's Super Nut, marking its debut at the World Dairy Innovation Awards in 2023.

Asia Pacific is projected to hold the highest share of the global A2 milk market. The region is acknowledged as an important market because of the increasing recognition of the health benefits of A2 beta-casein milk in growing countries like China and India. Furthermore, the product is mainly manufactured in the Asia Pacific area because of the presence of A2 breed cows and the increasing need for dairy products in that region. However, in the market year 2024 (January-December), FAS New Delhi (Post) expects India's national cattle herd rising to 307.6 million head, up by about 135 thousand head from the USDA's official 2023 projection of 307.5 million head.

After analyzing data, it was determined that the slight rise in cattle population can be attributed to the growth of the calf population in 2024, reaching 70.4 million head, which is 300 thousand more than the USDA's previous estimate of 70.1 million head in 2023.

Europe and North America are anticipated to experience the most rapid growth in the A2 milk market in the upcoming years. The Europe region has a highly developed dairy industry, and the growing use of A2 grade milk in confectionary products and bakery products in Germany, the United Kingdom, and France is also anticipated to drive the product demand in the projected time period. In addition, the dairy sector's continuous research and development activities are expected to exhibit robust growth for the A2 milk market. As per the data shared in the European Parliament, cheese is mainly consumed in Europe and North America, with a noticeable increase in popularity in both areas, which presents the established dairy industry in A2 milk market. However, about 30 to 50 million Americans have a lactose intolerance with 80% of African-Americans and Native Americans cannot digest lactose. More than 90% of Asian Americans have difficulty digesting lactose, while those with a Northern European background are least likely to be affected. Thus, with the growing number of individuals in North America suffering from lactose intolerance, the demand for the A2 milk and milk products in the region is on the rise.