Dairy Ingredients Market Report

Among the product type segment, the milk powder is the dominant product that holds the major share as compared to other products. Fresh milk instantly spoils, but milk powder made from fresh milk is a long-lasting stock item with a longer shelf life. Powdered milk comprised a high amount of the nutrients present in fresh milk, like protein, calcium, and important vitamins. Various types of milk powder, such as skimmed and whole, can be utilized for making baby formula or in baking, showcasing its versatility. Furthermore, milk powder is essential in the manufacturing of baked goods, confectionary items, and sports nutrition products. Consequently, the increasing need for these items drives the milk ingredient industry.

Furthermore, the global shift regarding higher standards and new advancements in the nutrition sector has resulted in the emergence of novel dairy components, leading to a competitive environment. Dairy ingredients are extensively utilized in the food processing industry based on their functional features, which include emulsification, gelling, and texture enhancement. As per the NIH 2023, the emerging non-thermal milk treatments, when combined with low or moderate heating, offer a promising alternative for preserving nutritional value and flavour. The primary aim is pathogen elimination, tailored to product type and shelf life, while minimizing flavour and nutrient loss.

The cost of raw milk, which is the main ingredient in dairy items, can differ significantly because of weather, feed expenses, and global dairy commodity costs. This instability poses significant challenges for dairy ingredient producers in terms of managing costs and maintaining product pricing consistency. Potential rise and fall in raw milk expenses could lower profits for the company and complicate future financial projections. A common dietary limitation, lactose intolerance prevents numerous individuals from properly digesting dairy items. Consequently, interest in lactose-containing dairy items among lactose-intolerant individuals may decline. Additional dietary limitations and allergic reactions to dairy products may also result in a decrease in the request for standard dairy components.

However, as per the NIH, about 65% of the global population is lactose intolerant, which largely affects African Americans and Asians and is least prevalent in people of European descent. The burgeoning demand for plant-based substitutes, such as soy protein, pea protein, and nut-based ingredients, poses a formidable challenge to dairy ingredients. Innovations in plant-based production object to mimic the taste, texture, and functionality of dairy, supplying to vegan and dairy-free consumers. This competition could decrease the control of dairy ingredients in the market, especially in areas where plant-based alternatives are recognized as being better for health or the environment. The dairy industry is currently being closely inspected for its environmental effects, such as greenhouse gas emissions, water usage, and land allocation.

Major market players make use of marketing strategies focused on new product launches, mergers, and acquisitions in order to enhance their consumer base and improve their product portfolio. In February 2024, Nestlé SA, a Swiss multinational corporation, debuted its first precision fermentation dairy protein powder, known as Better Whey. This novel product, a whey isolate, is both animal-free and lactose-free. It was launched under the Orgain brand, which Nestlé acquired a mass stake in early 2022, strategically putting itself in the expanding functional nutrition market.
 
Moreover, in June 2024 the Schreiber Foods, a global food and beverage company devoted to refining diversity across its organization, has established the 2024 New North Workplace Excellence Award. Furthermore, in November 2023, FrieslandCampina Ingredients has announced a new product, Nutri Whey ProHeat, in the medical nutrition industry. This heat-resistant whey protein is formulated with microparticulation technology, which includes thermal treatment to produce small aggregates. This special formula assures that whey proteins remain stable even during high-temperature processing.
 
In December 2023, the Nestle and Fonterra had signed a new deal to increase payments to dairy farmers for improving on-farm sustainability by reaching one of three levels in Fonterra's "The Co-operative Difference" framework in the 2023/24 season. The action aims to support Fonterra's goal of achieving "net zero" by 2050, with targets for 2030 including a 30% decrease in on-farm emission intensity.

The Asia Pacific region will dominate the global dairy ingredients market in terms of market share. The Asia-Pacific region has been having more millennials recently, resulting in an increased demand for food and drinks. The popularity of high protein foods and beverages is rapidly increasing worldwide, coupled with growing interest from health-conscious individuals, thus leading to the inclusion of protein claims by manufacturers in their food and drink releases. The Consumer’s increasing interest in health and wellness has fuelled a growth for utilization of milk protein in the market, due to the increasing demand for functional food and beverage products. However, as per the USDA, to keep up with increased demand in 2023, Japan received 57% increase in butter imports during the first 8 months compared to the previous year.

The dairy industry in North America is firmly rooted, featuring a robust system for both producing and processing milk. The scale of the dairy industry in North America permits for efficient production methods and cost savings, leading to a wide selection of dairy products being readily available. North America's rigorous food safety and quality regulations guarantee that dairy ingredients adhere to the most stringent standards. The dairy industry is monitored by regulatory agencies like the FDA and CFIA, who oversee strict regulations and certifications. This strict regulation ensures that dairy ingredients are safe, trackable, and of high quality. In North America, dairy ingredient manufacturers are constantly coming up with new ideas to discover fresh uses for their products in a range of food and beverage sectors. This consists of nutritious meals, fitness supplements, baby food, and health supplements.