DAIRY PRODUCTS MARKET ANALYSIS

Dairy products or milk products, also known as lacticinia, are food products made from (or containing) milk. Cow, water buffalo, nanny goat, and sheep are the most common dairy animals. Dairy products include yoghurt, cheese, and butter, which are commonly found in western grocery stores (such as Walmart, Kroger, etc.). A dairy is a production facility for dairy products. Some people forgo dairy products entirely or in part due to lactose intolerance, vegetarianism, or other health concerns.

The global dairy products market is expected to surpass US$ 640.8 billion by the end of 2030, in terms of revenue, exhibiting a CAGR of 3.2% during the forecast period (2022 to 2030).

Drivers

One of the major drivers of dairy products market growth include rising population and urbanization, which increases demand for dairy products. For instance, according to the United Nation Estimates the current world population is 7.9 billion, as of February 2022. Moreover, according to the United Nation Estimates, the global human population is expected to reach 9.9 billion in 2050, an increase of 32% from an estimated 7.9 billion in 2020. As the world’s population grows, demand for food and beverages is also increasing consequently. With the increased population density comes increased urbanization, which in turn is expected to lead to greater personal income and demand for dairy products.

The per capita consumption of milk and milk products is expected to witness significant growth during the forecast period, as diets have become richer and more diverse. For instance, according to the International Milk Genomics Consortium in 2021, milk consumption per capita in Finland was 430.76 kgs, with milk consumption per person at about 41.76 gallons per year.

Dairy products not only provide high-value protein, but are also an important source of a wide range of essential micronutrients such as calcium, riboflavin, phosphorous, vitamin A and B12, potassium, and magnesium. Considering the world’s growing population and increasing demand for high nutritional products (such as milk, yogurt, cheese, etc.), demand for dairy products is expected to increase rapidly, which in turn is expected to boost growth of the global dairy products market.

Among regions, Asia Pacific held a dominant position in the global dairy products market in 2021, accounting for 45.7% market share, in terms of revenue, followed by Europe and North America. The largest market in this segment is Asia Pacific. This is due to the high population density in this region. Dairy products are particularly popular in this region because of the health benefits they bring to consumers. The usage of dairy products in this region varies by country; for example, in India, dairy products are utilized in a variety of cuisines to enhance flavour and taste of the cuisines.

Figure 1. Global Dairy Products Market Revenue Share (%), By Region, 2021

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Market Restraints

Growing demand for alternatives such as plant protein is expected to hamper the global dairy products market growth. The demand for plant-based food alternatives is increasing among consumers, owing to growing awareness about animal welfare. Plant-based dairy product alternatives such as soy milk, almond milk, non-dairy ice-creams, cheese analogues, and whipped cream are rapidly moving into the mainstream retail market, owing to the growing perception that plant-based products are healthier and safer.

The rapidly developing dairy alternatives industry with new product innovations such as non-dairy ice-creams, cheese analogues, and whipped creams is expected to hamper the global dairy products market growth. Increasing number of people who do not consume lactose is a major restraining factor for the growth of global dairy products market.

Market Trends

Consumers are opting for a healthier diet, as their choice for a healthier lifestyle grows. Consumers also choose a high number of dairy products in their diet since dairy products include a variety of essential nutrients including calcium, potassium, vitamin D, and protein. Yogurt, milk, and cheese are among the most popular dairy products. Dairy products are becoming increasingly popular among customers as a result of their health benefits. There are various types of dairy products available around the world and consumers consume them in a variety of ways. For example, milk is utilized as the primary ingredient in the dessert manufacturing process in several nations.

Figure 2. Global Dairy Products Market Revenue Share (%), By Product Type, 2021

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On the basis of product type, in 2021, milk segment held largest revenue share of 60.6% in global dairy products market. Milk consumption is increasing in emerging economies such as India, Brazil, etc. because it is extremely nutritious and provides protein and calcium. Milk consumption also lowers the incidence of osteoporosis in the elderly, which is expected to increase demand significantly for milk. The nutritional properties of milk and increased awareness regarding the health benefits of milk are expected to drive growth of the segment.

Global Dairy Products Market - Impact of Coronavirus (Covid-19) Pandemic

The global economy has been affected by the coronavirus pandemic, as governments across the globe imposed lockdown measures to curb the movement of people. Due to these lockdowns, industrial activities halted and international travel was ceased. These measures had an extremely adverse impact on almost all industrial sectors. Factories and manufacturing facilities also faced supply chain breakdowns and labor shortages.

The COVID-19 pandemic continues to have a negative impact on the supply chain of the dairy products industry. Various countries and sub regions such as the U.S., Germany, France, China, India, Japan, and ASEAN are prominent markets, in terms of both production and consumption of dairy products. These countries are most heavily impacted by the COVID-19 pandemic. The pandemic has slowed the dairy products manufacturing projects due to labor shortage and disruption in raw materials supply. Due to such interruptions to global trade, the projects under construction were delayed, resulting in higher capital expenditure (CAPEX) for such dairy product manufacturing projects, which in turn halted the supply of dairy products.

Competitive Section

Key players operating in the global dairy products market include Arla Foods Amba, Dairy Farmers of America, Inc., Danone S.A., DMK Group, Fonterra Co-operative Group Limited, Frieslandcampina, GCMMF, Lactalis International, Meiji Holdings Co. Ltd., Nestle S.A., Dean Foods Company, Saputo Inc., Megmilk Snow Brand Co., Ltd., Parmalat S.p.A., and Unilever N.V.