Market Trends of Dairy Ingredients Industry
Increasing Milk Production Supporting the Demand for Dairy Ingredients
- The demand for more functional food and beverage products, driven by consumers' interest in health and wellness, has led to an increase in the use of milk protein in the market. According to Food and Agriculture Organization Corporate Statistical (FAOSTAT) Database, India is the world's largest milk producer, with an output of over 209.6 million tons of cow's milk in 2021. Other large milk producers were the United States, with almost 102.62 million metric tons, and Pakistan, with around 60.8 million tons. The Asia-Pacific region's active milk production has supported the growth of its derivatives, such as milk protein concentrates, milk powder, and whey protein ingredients. Due to their digestibility properties, milk protein isolates are the most commonly used ingredient by infant food manufacturers for products such as baby cereals, bottled baby food, and others.
- In 2021, manufacturers such as Lactalis launched organic whole milk powder ingredients with various applications across different end-user industries, such as the confectionery and bakery industries. This was done in response to the burgeoning demand from various end-user industries looking to formulate organic food products.
- Additionally, dried milk protein concentrate is produced from skim milk using a combination of processes, such as ultrafiltration (UF), evaporation or nanofiltration, and spray drying. The increasing demand for milk protein concentrates is supported by steady growth in skimmed milk powder production in the market. The United States has registered an increasing production of skimmed milk powders, supporting the growth of skimmed milk concentrates and milk protein concentrates during the study period.
- In addition to consumer demand, government initiatives to support the dairy industry have played a significant role in increased production. For example, the National Programme for Dairy Development (NPDD) in India aims to strengthen the infrastructure for the production of high-quality milk and its products. The positive outlook of the dairy industry in the market, coupled with the increasing demand for protein-rich food and constant evolution in product launches, is actively accelerating the application of various dairy ingredients in the food and beverage industry. This trend is expected to continue gaining momentum during the forecast period.
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Europe Holds the Major Share
- Europe dominates the dairy ingredients market, with countries like the United Kingdom, Germany, and France using high-concentrate dairy ingredients such as whey proteins and milk protein isolates. The increasing interest in health and wellness among consumers, especially in the sports industry, has driven the demand for dairy ingredients in supplements. Key players in the industry are focusing on developing new products that cater to the consumers' evolving requirements. For example, in December 2021, Euroserum launched SICAPRO 35, a 35% serum protein concentrate suitable for the formulation of infant formulas.
- The increasing interest in protein as an ingredient is driven by fitness enthusiasts, particularly in Europe. The demand for mainstream health and wellness ingredients is also rising in the food and beverage sector. Countries like Germany and France have a significant demand for infant nutrition or baby formula that utilizes dairy proteins. Additionally, the region's strong coffee culture has contributed to the high demand for dairy ingredients, particularly in the preparation of creamers and whiteners for use in the food and beverage industry.
- Furthermore, the trend of organic food consumption has led to new product developments. For instance, in 2021, Lactalis Ingredients launched organic whole milk powder in France, sourced exclusively from French dairy farms that adhere to organic farming specifications. The organic standards ensure a product free from additives like neutralizing agents, antibiotics, and preservatives.
- Additionally, the growing consumer interest in high-protein snacking has resulted in the emergence of companies specializing in protein bars and confectionery. This trend is expected to continue to create growth opportunities in the dairy ingredients market. In March 2022, Mondelēz International acquired a significant majority interest in Grenade, a leading UK performance nutrition pioneer in the fast-growing high protein bar segment. Grenade is one of the category leaders in high-protein bars. Its Carb Killa has been the best-selling product in the segment, with a growing presence in the UK and availability across other regions, including North America and Asia Pacific.
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