Dairy Ingredients Market Analysis & Forecast: 2026-2033
The Dairy Ingredients Market size is anticipated to grow at a CAGR of 3.7%, from USD 65.30 Bn in 2026 to approximately USD 84.38 Bn by 2033. The market’s growth is mainly driven by the rising demand for protein-rich and fortified food products, increasing consumption of infant nutrition and sports nutrition products, wider use of dairy proteins in functional foods and beverages, and growing demand for clean-label and value-added ingredients. Dairy ingredients such as whey proteins, milk powders, casein, lactose, and milk protein concentrates are increasingly used across bakery and confectionery products, nutritional supplements, beverages, clinical nutrition, and convenience foods due to their nutritional, functional, emulsifying, and texture-enhancing properties. According to the Food and Agriculture Organization of the United Nations, global milk production was forecast to reach approximately 992.3 million tonnes in 2025, representing an increase of 1.4% compared with 2024. Global per-capita consumption of milk and
The global dairy ingredients market is becoming more dynamic because of the growing consumer inclination towards protein-rich, functional, and nutrition-dense food products. The use of whey protein concentrate, milk protein concentrate, milk protein isolate, caseinate, and hydrolyzed dairy proteins is becoming more prevalent in sports nutrition products, functional drinks, high-protein foods, yogurt, bakery products, and meal replacement products.
Arla Foods Ingredients announced in November 2025 that more than 40% of consumers who are conscious about their health chose dairy proteins for adding protein to their diet, while more than 30% had dairy proteins through guilt-free snacks. Arla Foods Ingredients also launched the application concept for drinks including yoghurt drink containing 25 grams of protein, a cookie having 27% protein, brownie with 25% protein, and a snack bite with up to 40% protein.
Increasing demand for dairy-based ingredients for infant formula, therapeutic nutrition, aging well products, and recovery products is another factor that will significantly boost market growth. Specific dairy ingredients like whey protein concentrates, milk fat globule membranes, lactoferrin, caseinates, lactose, and milk protein isolates are desirable due to their ease of digestion, high quality of amino acids, immune-stimulating properties, and capacity to deliver nutritional benefits through smaller amounts of the product.
The World Health Organization’s 2025 guidance on managing undernutrition among older people recommends daily protein intake of approximately 1.0–1.2 grams per kilogram of body weight for undernourished individuals. People recovering from weight loss, acute illness, or injury may require up to 1.5 grams per kilogram per day. This clinical emphasis on protein intake is supporting the development of dairy protein-based oral nutritional supplements, fortified beverages, and medical nutrition products for aging populations and patients requiring nutritional recovery.
In April 2025, Food Standards Australia New Zealand approved bovine milk fat globule membrane-enriched whey protein concentrate for voluntary use in infant formula at concentrations of 0.14–0.28 grams per 100 kilojoules.
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India Approves Revised National Programme for Dairy Development—NPDD (March 2025) |
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U.S. FDA Implements Updated “Healthy” Food-Labeling Criteria (April 2025) |
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On the basis of product type, the milk powder segment, comprising skimmed milk powder and whole milk powder, is projected to account for the largest dairy ingredients market share of 52.4% in 2026. The segment’s growth is owing to milk powder’s longer shelf life, ease of transportation, relatively economical pricing, consistent composition, and extensive utilization across bakery, confectionery, infant formula, dairy beverages, recombined milk, and nutritional products.
The USDA Foreign Agricultural Service forecasts that skimmed milk powder exports from major global suppliers will reach approximately 2.07 million metric tonnes in 2026. The European Union alone is expected to produce around 1.48 million metric tonnes of skimmed milk powder, maintaining its position as the world’s largest SMP producer. The significant production and international trade volumes demonstrate the scale, availability, and commercial importance of milk powder within the dairy ingredients industry.
In October 2025, Lactalis Ingredients announced the presentation of a lactose-free skimmed milk powder at Food Ingredients Europe 2025, alongside its broader portfolio of skimmed, whole, and fat-filled milk powders.
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On the basis of application, the bakery products segment is projected to account for the largest dairy ingredients market share of 24.8% in 2026. The segment’s growth is owing to the extensive use of milk powders, whey proteins, milk protein concentrates, lactose, permeate, butter, and other dairy ingredients in bread, cakes, cookies, biscuits, pastries, crackers, fillings, glazes, and bakery premixes. Fonterra reported that its Anchor whipping cream was being used in approximately 260 million cakes annually through bakery and beverage outlets in China.
In February 2026, Lactalis Ingredients displayed sweet whey powders that have high fluidity properties suitable for bakery applications due to their lack of caking and Maillard reactions and ability to withstand hot and humid conditions in storage. Lactalis Ingredients currently offers dairy ingredients in over 100 countries, thus showing that bakery-compatible dairy ingredients have been commercially used.
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The European market is projected to capture about 32.4% of the overall dairy ingredients market globally in 2026. The dominant position held by the European market can be attributed to its efficient milk collection systems, sophisticated spray-drying and membrane filtration technologies, food quality considerations, and manufacturing of milk powders, whey ingredients, casein, lactose, and milk protein concentrates.
Eurostat data released in November 2025 showed that EU dairies produced approximately 2.7 million tonnes of dairy powder products from 19.0 million tonnes of skimmed milk and 4.8 million tonnes of whole milk in 2024. Germany produced more whey, butter, cheese, and drinking milk than any other EU country, while the Netherlands accounted for approximately 17% of EU whey production. These figures demonstrate Europe’s extensive processing capacity and its ability to supply high-volume and specialized dairy ingredients.
The Asia Pacific dairy ingredients market is forecast to record the fastest growth, at a CAGR of approximately 4.52% during 2026–2033. Regional growth is owing to increasing incomes, population expansion, urbanization, modernization of dairy-processing infrastructure, and rising demand for infant formula, functional beverages, protein-fortified foods, bakery products, and sports nutrition.
According to the OECD–FAO Agricultural Outlook 2025–2034, Asia, particularly India and Pakistan, is expected to record the strongest growth in fresh dairy consumption. More than half of the projected increase in global milk production over the coming decade is expected to originate from these two countries. Milk-solids consumption is projected to increase to approximately 30 kg per capita in India and 46 kg per capita in Pakistan, creating a larger raw-material and demand base for dairy ingredient processing.
In September 2025, FrieslandCampina Ingredients opened an expanded application and innovation center in Singapore, increasing its research and development space in the country by approximately 30%.
The U.S. dairy ingredients industry is supported by its large milk-processing base, extensive whey-valorization capacity and growing production of high-protein ingredients for sports nutrition, medical nutrition, infant formula and functional beverages. The United States has good manufacturing facilities of whey protein concentrate, lactose, milk protein concentrate, skimmed milk powder, and other dried dairy ingredients.
According to data provided by the USDA National Agricultural Statistics Service, production of whey protein concentrates from the United States amounted to about 502 million pounds in 2025, representing a growth of 2.1% against 2024. Production of lactose experienced a growth of 2.6% and stood at about 1.14 billion pounds.
In March 2025, Hilmar Cheese Company officially opened its new dairy-processing facility in Dodge City, Kansas. In addition to producing cheese, the facility manufactures a range of innovative whey proteins for customers worldwide.
China is expected to witness continued development in the dairy ingredients market owing to increasing demand for functional nutrition, specialized milk powders, infant nutrition, healthy-aging products, high-protein foods, and locally manufactured dairy proteins. The market is gradually moving beyond conventional liquid milk toward higher-value ingredients such as lactoferrin, micellar casein, demineralized whey powder, hydrolyzed proteins, and specialty milk powders.
In June 2026, China Mengniu Dairy officially launched MnmpX, a new dairy ingredients brand, at the Hi & Fi Asia-China 2026 exhibition in Shanghai. The new business-to-business ingredient platform includes high-value dairy ingredients such as lactoferrin, membrane-filtered casein, D90 demineralized whey powder, milk proteins, and other whey-derived ingredients.
Some of the major key players in Dairy Ingredients Market are Friesland Campina, Fonterra Co-operative Group Ltd., Dairy Farmers of America, Arla Foods, Glanbia Plc., Euroserum, Groupe Lactalis, Saputo Inc., Volac International Limited, and Devondale Murray Goulburn.
| Report Coverage | Details | ||
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| Base Year: | 2025 | Market Size in 2026: | USD 65.30 Bn |
| Historical Data for: | 2020 To 2024 | Forecast Period: | 2026 To 2033 |
| Forecast Period 2026 to 2033 CAGR: | 3.7% | 2033 Value Projection: | USD 84.38 Bn |
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| Companies covered: |
Friesland Campina, Fonterra Co-operative Group Ltd., Dairy Farmers of America, Arla Foods, Glanbia Plc., Euroserum, Groupe Lactalis, Saputo Inc., Volac International Limited, and Devondale Murray Goulburn. |
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Pankaj Poddar is a seasoned market research consultant with over 12 years of extensive experience in the fast-moving consumer goods (FMCG) and plastics material industries. He holds a Master’s degree in Business Administration with specialization in Marketing from Nirma University, one of India’s reputed institutions, which has equipped him with a solid foundation in strategic marketing and consumer behavior.
As a Senior Consultant at CMI for the past three years, he has been instrumental in harnessing his comprehensive understanding of market dynamics to provide our clients with actionable insights and strategic guidance. Throughout his career, He has developed a robust expertise in several key areas, including market estimation, competitive analysis, and the identification of emerging industry trends. His approach is grounded in a commitment to understanding client needs thoroughly and fostering collaborative relationships. His dedication to excellence and innovation solidifies his role as a trusted advisor in the ever-evolving landscape of not only FMCG but also chemicals and materials markets.
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