Dairy Nutritional and Nutraceutical Ingredient Market

Dairy Nutritional and Nutraceutical Ingredient Market Outlook (2024 to 2034)

The global dairy nutritional and nutraceutical ingredient market size is projected to increase from a valuation of US$ 20.21 billion in 2024 to US$ 38.12 billion by the end of 2034. Worldwide sales of dairy nutritional and nutraceutical ingredients are forecasted to increase at a CAGR of 6.6% from 2024 to 2034.

Demand for functional ingredients and the global shift toward healthier diets are driving market growth. This industry is benefiting from increasing consumer preference for natural and organic products. Specifically, as awareness grows about the benefits of whey protein, its utilization is on the rise.

Recent additions to store shelves include a novel milk product that has undergone extensive development and testing over the years. This milk is purported to offer health benefits not typically found in regular milk. It is rich in nutrients crucial for human health. The company behind this product is optimistic about its success, having invested significantly in research and development. They believe this milk could revolutionize the dairy sector.

Casein and caseinates are dairy constituents that separate from milk; whey serves as a vital raw material for supplements and various food processing applications. Dairy ingredients also function as natural moisturizers in cosmetics and personal hygiene products, often applied in aqueous solutions. Demand for diverse dairy ingredients is rising as consumers seek food and beverage products enriched with a broader range of nutritional components listed on labels.

Report Attribute	Detail
Dairy Nutritional and Nutraceutical Ingredient Market Size (2024E)	US$ 20.21 Billion
Forecasted Market Value (2034F)	US$ 38.12 Billion
Global Market Growth Rate (2024 to 2034)	6.6% CAGR
Mexico Market Growth Rate (2024 to 2034)	6.8% CAGR
Japan Market Value (2034F)	US$ 1.42 Billion
North America Market Share (2024E)	21.6%
Vitamins and Minerals Segment Share (2034F)	29.9%
Key Companies Profiled	Fonterra Co-operative Group Ltd.; Koninklijke DSM N.V.; Proliant Inc.; Arla Foods amba; E.I. DuPont De Nemours and Co.; Cargill Inc.; APS Biogroup; Groupe Lactalis S.A.; Nestlé SA; Danone SA.

Why is Consumption of Dairy Nutritional and Nutraceutical Ingredients Gaining Traction?

“Growing Consumer Interest in Healthier and Innovative Dairy Products”

Over the years, the dairy industry has seen significant advancements that continue to evolve, driven by consumer demand for a variety of flavors. Products such as milk, ice cream, and yogurt are consistently available in numerous flavor options. There is a growing preference for flavored dairy products, which is expected to drive profitability and market growth over the next decade as more consumers seek healthier and innovative options.

Flavored milk, yogurt, and other innovative dairy products are increasingly adopted and gaining traction among consumers worldwide, indicating a strong potential for increased sales. Young adults constitute a prominent demographic group, characterized as modern consumers with a strong preference for unique flavors and a willingness to explore new dairy offerings.

Dairy manufacturers globally are investing to understand and cater to this demand by introducing a wide range of flavored products aimed at the youth market. The positive consumer response to these innovative flavored products is driving global dairy nutritional and nutraceutical ingredient market growth.

“Suppliers Enhancing Logistics and Distribution Networks”

Dairy products are highly perishable and require careful storage at optimal temperatures to prevent spoilage. Their short shelf-life is due to the presence of harmful microorganisms and pathogens that can pose health risks to consumers, potentially causing various diseases.

There is a growing preference among consumers for fresh and natural dairy products that are free from artificial additives. Dairy suppliers are capitalizing on this trend by offering natural products that meet market demand. They are also enhancing their logistics to ensure swift delivery and customer satisfaction. Shift toward clean-label, pure, natural, and fresh ingredients is bolstering trust and driving strong demand for dairy products across all age groups and regions.

What are the Challenges Faced by Dairy Nutritional Ingredient Manufacturers?

“High Cost of Fortified Products and Quality Disparity”

Based on the ingredient’s origin, the price of a product might vary largely, synthetic ingredients have lower production costs when compared to natural ingredients, and they eliminate the need to manage natural sources from which the functional principles are going to be extracted. Synthetic raw materials, in contrast, cannot achieve the quality standards set by natural raw materials. In addition, the bioavailability of these raw materials significantly impacts the final product's cost. These factors are impeding the expansion of the dairy nutritional and nutraceutical ingredient market size.

Country-wise Analysis

Dairy products play a crucial role in global consumption and are poised for profitability across major countries such as the United States, China, South Korea, and Japan. As awareness of health benefits grows, both North America and East Asia are expected to hold significant market shares over the projection period.

Why is the United States a Leading Supplier of Dairy Ingredients to Confectionery Manufacturers?

“Sufficient Supply and Quality of Dairy Ingredients for Confectionery Formulations”

Attribute	United States
Market Value (2024E)	US$ 3.11 Billion
Growth Rate (2024 to 2034)	6% CAGR
Projected Value (2034F)	US$ 5.58 Billion

Dairy ingredients find extensive use in baking and confectionery items, enhancing flavor richness and nutritional content for consumers. With the United States being a leading global milk producer, it is well-positioned to supply essential dairy ingredients to confectionery manufacturers.

Advancements in the confectionery industry are a key dairy nutritional and nutraceutical ingredient market trend that is motivating developers to integrate dairy components into their products. Innovations in the United States market are expected to further boost demand for dairy ingredients.

Why is China Proving to Be a Lucrative Market for Dairy Nutritional Ingredient Producers?

“Partnerships with International Organizations Enabling Access to Advanced Production Technologies”

Attribute	China
Market Value (2024E)	US$ 3.71 Billion
Growth Rate (2024 to 2034)	7.1% CAGR
Projected Value (2034F)	US$ 7.35 Billion

Chinese dairy consumers prioritize production dates, shelf life, and detailed label information. China's dominance in the dairy ingredients market is expected due to partnerships with international organizations and the emergence of major competitors.

• By 2018, the Dairy Association of China reported a 150-fold increase in raw milk production. From 1995 to 2010, urban milk and dairy consumption quadrupled, and rural consumption increased nearly sixfold.

Category-wise Insights

The market is segmented into various categories involving ingredient types available and sales channels through which suppliers are maximizing their sales. Based on distribution channels, the market is segmented into pharmacies drug stores, health and beauty stores, and online sales.

What Makes Dairy Proteins Popular in Protein Supplementation?

“High-Quality Protein Content and Convenience as Effective Protein Sources”

Attribute	Dairy Proteins
Segment Value (2024E)	US$ 8.1 Billion
Growth Rate (2024 to 2034)	6.4% CAGR
Projected Value (2034F)	US$ 15.06 Billion

Dairy proteins such as whey and casein are renowned for their high-quality protein content, offering a convenient protein source. Dairy protein supplements are demonstrating superior effectiveness in enhancing strength and increasing lean body mass compared to other protein sources, thus capturing a significant share of the market. Suppliers are ramping up dairy protein production to capitalize on these advantages and maximize profitability.

Which Sales Channel Leads Revenue Generation for Dairy Nutritional and Nutraceutical Ingredient Suppliers?

“Health and Beauty Stores Offering Direct Consumer Engagement and Enhancing Product Visibility”

Attribute	Health & Beauty Stores
Segment Value (2024E)	US$ 8.02 Billion
Growth Rate (2024 to 2034)	6.5% CAGR
Projected Value (2034F)	US$ 15.06 Billion

Health and beauty stores are estimated to occupy 39.5% of the dairy nutritional and nutraceutical ingredient market share in 2024. This pattern highlights the rising popularity of health and beauty stores as a means of contacting customers and portends a change in the sector. These suppliers are realizing how these channels may be used to sell and deliver their goods to a target population that is becoming increasingly health-conscious and is increasingly becoming a new market trend.

Business Competition

Important producers provide specific product offers, particularly to producers in the food and beverages industry. Key players in the dairy nutritional and nutraceutical ingredient market are also providing yogurt, milk, meat substitutes, items for use in bakeries and confectioneries, RTE meals, convenience foods, and other items such as dairy whiteners and dairy enzymes.

• On September 1, 2022, Prodap, a top animal nutrition and technology firm in Brazil, was acquired by DSM, a company involved in the health, nutrition, and material sectors. This will facilitate Koninklijke DSM N.V.'s international commercial expansion.
• Germany-based Just Spices was successfully acquired by Kraft Heinz in January 2022. The company's goal with this purchase is to expand globally and increase its business. Kraft Heinz's product line was enhanced by the innovative offerings of Just Spice.

Fact.MR provides detailed information about the price points of key dairy nutritional and nutraceutical ingredient manufacturers positioned across the world, sales growth, production capacity, and speculative technological expansion, in this new market report.

Key Segments of Dairy Nutritional and Nutraceutical Ingredient Market Research

• By Ingredient Type :

  • Dairy Protein
    • Whey Protein
      • WPI
      • WPC
      • WPH
    • Casein Protein
      • CPI
      • CPC
      • CPH
    • Prebiotics
      • Lactulose
      • Lactitol
      • Lacto Bionic
      • Galacto Oligosaccharides
    • Vitamins & Minerals
    • Colostrum
    • Nucleotides

• By Distribution Channel :

  • Pharmacies & Drug Stores
  • Health & Beauty Stores
  • Hypermarkets/Supermarkets
  • Online Sales
  • Other Sales Channels

• By Region :

  • North America
  • Latin America
  • Eastern Europe
  • Western Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa