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July 2025
The global dairy ingredients market size valued at USD 78.08 billion in 2024 and is anticipated to increase from USD 83.39 billion in 2025 to an estimated USD 150.75 billion by 2034, witnessing a CAGR of 6.8% during the forecast period from 2025 to 2034. The increasing consumer preference towards healthier and natural food options drives the growth of the market.
| Study Coverage | Details |
| Growth Rate from 2025 to 2034 | CAGR of 6.8% |
| Market Size in 2025 | USD 83.39 Billion |
| Market Size in 2026 | USD 89.06 Billion |
| Market Size by 2034 | USD 150.75 Billion |
| Largest Market | Asia Pacific |
| Base Year | 2024 |
| Forecast Period | 2025 to 2034 |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
The global dairy ingredients market comprises a wide range of products derived from milk that are used as essential components in food, beverages, pharmaceuticals, and nutraceuticals. These ingredients, processed from raw milk, include proteins, lactose, casein, milk powder, and whey derivatives. They serve functional roles such as thickening, emulsification, gel formation, and nutritional enrichment across industries.
One of the major driving factors enhancing the growth of the market is the increasing demand for alternative plant Protein. As consumers are increasingly aware of animal health and well-being, the demand for plant-based food alternatives is increasing among consumers. Plant-based dairy ingredient alternatives such as whipped cream, cheese analogs, non-dairy ice creams, almond milk and soy milk are increasingly shifting into the mainstream retail market, due to the perception towards plant-based products which are safer and healthier, which are further expected to enhance the growth of the market during the forecast period.
The integration of artificial intelligence is transforming several sectors, and the dairy ingredients industry is no exception, which may create significant opportunities. To improve operations and boost productivity, AI provides practical solutions for dairy products. By integrating AI-generated analytics, manufacturers can prevent diseases such as disease outbreaks and make informed decisions. Robotic milking systems use AI to identify cows, attach milking units, and collect data on milk yield.
To navigate various challenges, dairy farmers are integrating advanced technologies like Artificial Intelligence. The entire dairy value chain is experiencing remarkable enhancements in productivity and efficiency by leveraging AI’s potential. By reducing transportation costs and waste, AI enhances a more sustainable industry. These factors are expected to revolutionize the growth of the dairy ingredients market in the coming years.
One of the major restraining factors hindering market growth is milk spoilage and quality control, which may create major challenges in the supply chain. Due to microbial contamination, inadequate refrigeration, and poor storage conditions, milk spoilage is a major challenging factor. In addition, the lack of cold chain infrastructure and high energy consumption in dairy procedures are also major factors, which are expected to restrain the growth of the dairy ingredients market.
How Asia Pacific Dominates the Market Revenue in 2024?
Asia Pacific dominated the dairy ingredients market in 2024. The market growth in the region is attributed to the increasing demand for dairy ingredients, increasing demand for dairy products, such as buttermilk, yogurt, butter, cheese, and more, increasing consumer preference towards food and hotel, rising innovation in dairy products, growing rapid urbanization, and growing population across the globe. China, India, Japan, and South Korea are dominating countries driving the market growth.
India dominated the market in 2024, driven by increasing consumer preference towards Indian cuisine and cultural preferences. India is the largest country in the food and beverage industry, with increasing disposable incomes and increasing demand for various segments, such as dairy product manufacturing, confectionery, and bakery. In India, dairy is a significant part of daily meals. There are various dairy ingredients used in daily needs, such as ghee, curd, buttermilk, and paneer. Paneer helps in easing muscle and reducing cardiac dysfunctions, which further increases the demand for dairy ingredients in India.
North America Global Market Trends
North America is expected to grow fastest during the forecast period. The market growth in the region is driven by the increasing adoption of convenience foods, increasing consumer trend towards preferences and tastes, rising technological advancements in dairy processing, increasing consumer preference towards protein-rich diets, and increasing demand for natural and nutritious food options. The U.S. and Canada are the fastest growing countries, propelling the dairy ingredients market in the region.
The U.S. is expected to grow fastest during the forecast period. The market growth in the U.S. is driven by the increasing demand for cheese and butter, increasing demand for bakery products, and increasing consumer busy and modern lifestyles. For instance, in 2023, the per capita consumption of dairy products reached 661 pounds per person and increased by 7 pounds, according to the U.S. Department of Agriculture (USDA). Butter has also seen a significant growth in the U.S., which further drives the market growth.
How Milk Powder Segment Dominates Dairy Ingredients Market Revenue in 2024?
The milk powder segment dominated the dairy ingredients market in 2024. The segment growth in the market is attributed to the various benefits, such as supporting healthy weight maintenance, offering a cost-effective and easy-to-make alternative to milk, increasing demand for on-the-go food options, helping to support heart health, and providing bone-building nutrients. Milk powder can enhance the taste of experience of any delight, especially in bakery products, which may drive the segment growth in the global market.
The functional dairy ingredients segment is expected to grow fastest during the forecast period. The segment growth in the market is driven by the increasing demand for functional food and beverages, increasing consumer preference towards clean-label and organic food products, and increasing demand for sports nutrition and fitness.
Why the Cow Milk Segment Held the Largest Dairy Ingredients Market Revenue in 2024?
The cow milk segment dominated the market in 2024. The segment growth in the global market is attributed to the various health-related benefits, such as improving the immune system, enhancing skin health, supporting brain health, improving hydration, helping in weight management, supporting heart health, boosting muscle repair and growth, and promoting strong bones.
The Buffalo Milk Segment is Expected to Grow Fastest During the Forecast Period.
The segment growth in the global dairy ingredients market is driven by the increasing demand for value-added dairy products, increasing demand for traditional dairy products, and increasing preference towards nutritional products. India is the largest producer of Buffalo milk. There is about 239.30 million tonnes of milk production in India in 2023-24, which is expected to accelerate the segment demand.
What Factors Help the Powder Segment Grow Significantly in 2024?
The powder segment dominated the dairy ingredients market in 2024. The powder segment plays a crucial role in dairy products. It helps in achieving lightness and volume in baked products. In addition, there are several health benefits related to the powder segment, such as ease of use, extended shelf life, cost-effectiveness, versatility in applications, and industrial preference, which is further expected to enhance the segment growth in the global market.
The Liquid Segment is Expected to Grow Fastest During the Forecast Period.
The liquid segment includes several dairy ingredients such as packaged dairy food products, frozen or chilled dough, pancake and waffle batters and batters, and ready-to-cook premixes. Various creams or egg whites can create foam through mechanical action, which makes various types of bakery products. In addition, increasing demand for clean-label and natural products, increasing consumer preference towards frozen and ready-to-cook premix, an increase in dairy food services, and increasing urbanization which further expected to accelerate the demand for the liquid segment in the global market.
How Emulsification Segment Dominates Global Dairy Ingredients Market Revenue in 2024?
The emulsification segment dominated the dairy ingredients market in 2024. The segment growth in the global market is driven by the increasing demand for convenience and processed food, increasing demand for clean-label and natural food products, and expansion in fortified and functional products. In addition, dairy emulsification provides essential functionality in soft serve and ice cream, and coffee whiteners. These solutions help with water-holding capacity, texture, stability, and fat dispersion, which are further expected to enhance segment growth in the global market.
The Thickening and Gelling Segment is Expected to Grow Fastest During the Forecast Period.
Thickening and gelling agents play an important role in various industries, especially in dairy products. Beverage thickeners have various benefits in dairy beverages, such as helping to make dairy beverages look better and taste, having a good stabilizing effect, interacting with milk proteins, interacting with emulsifiers, and increasing the viscosity, which further drives the demand for the thickening and gelling segment in the global market.
How did the Bakery & Confectionery Segment hold the Largest Dairy Ingredients Market Revenue in 2024?
The bakery and confectionery segment dominated the dairy ingredients market in 2024. The bakery and confectionery segment deals with cakes, pastries, baked products, and other dairy products. The segment growth in the market is attributed to the increasing consumer preference towards dairy sweet food products, increasing consumer trend towards small occasions, parties, and birthdays, and increasing modern and busy lifestyles. In addition, dairy products, such as pastries and cakes, are valued at Rs. 3,295 crores in India, which may increase the demand for the bakery and confectionery segment in the market.
The dairy products segment is expected to grow fastest during the forecast period. The segment growth in the market is attributed to the increasing demand for protein-enriched food, increasing production of milk in emerging countries, increasing consumer awareness towards health and wellness, and the growing population.
Why does the Food & Beverage Segment Dominates Dairy Ingredients Market Revenue in 2024?
The food and beverage segment dominated the dairy ingredients market in 2024. The segment growth in the market is driven by various benefits such as providing better nutrition, supporting gut health, improving taste and texture, increasing demand for clean-label and organic products, and increasing consumer preference towards sustainable alternatives. Fermentation in food and beverages enables a wide range of tasty and functional products such as meat alternatives, probiotic drinks, sauces, protein bar, and others, which is further expected to drive the segment growth in the global market.
The Nutraceuticals Segment is Expected to Grow Fastest During the Forecast Period.
The segment growth in the market is attributed to the various benefits, such as supporting reproductive health, manage psychological function, enhancing athletic performance, slowing down aging, boosting gut health, reducing inflammation, improving the function of the immune system, and treating and preventing chronic disease.
NAMYANG DAIRY PRODUCTS
Straus Family Creamery
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July 2025
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