The Dairy Nutritional And Nutraceutical Ingredients Market, estimated at USD 24.92 Bn in 2025, is expected to exhibit a CAGR of 8.4% and reach USD 43.83 Bn by 2032.
The market outlook remains positive, driven by growing demand for healthy, natural, and sustainable food ingredients across diverse food and beverage categories. Advances in processing, sourcing, and product innovation are enhancing quality, nutrition, and consumer appeal. Moreover, companies are strengthening their presence through innovation, strategic partnerships, and expanded distribution networks to capture new growth opportunities.
Dairy nutritional and nutraceutical elements are dairy protein foods that are vital to health. Whey protein and casein protein make up dairy protein. They are utilised in a variety of food and non-food applications, including the cosmetics sector. Dairy nutritional and nutraceutical elements may provide health advantages such as lowering the risk of cardiovascular disease, improving digestion, and boosting the immune system overall.
Drivers:
The growing demand for colostrum in sports beverage products is expected to propel the market growth of dairy nutritional and nutraceutical ingredients. Increasing use of bovine colostrum in sports drinks as it improves the overall immune response of the athletes and reduces stress is further projected to propel the market growth of dairy nutritional and nutraceutical ingredients. Moreover, the consumption of colostrum by athletes also reduce the contract respiratory infections.
Market Opportunities
Rising application of dairy nutrition in healthy snacks such as bars is expected to provide immense opportunity to the market of dairy nutritional and nutraceutical ingredients. For instance, on 17 June 2025, Arla Foods amba, a producer of dairy products build dairy farm in Nigeria to support local milk production. Under this it will also train and support up to 1,000 local dairy farmers as part of its long term commitment to public private partnerships that support the development of the Nigerian dairy sector as part of the country’s efforts to increase local food production.
Market Restraints
Increasing prevalence of lactose intolerance among consumer which is caused due to a shortage of lactase enzyme in the body and leads to symptoms such as cramps and diarrhoea is restricting the market growth. In this condition, the individual has inefficiency to digest lactose which is present in bovine colostrum. This is hampering the demand for dairy protein, thereby hindering the market growth of dairy nutritional and nutraceutical ingredients. However, according to U.S. Department of Health and Human Services, people with lactose intolerance can handle different amounts of lactose. Research suggests that many people could have 12 grams of lactose—the amount in about 1 cup of milk—without symptoms or with only mild symptoms
Market Trends
Growing demand for preservatives and spread along with the increasing urban population which is moving towards a healthy lifestyle is expected to be a key trend in the market. For instance, on 5 March 2025, NZMP, Fonterra’s dairy ingredient and solutions brand, launched new carbonzero organic butter.
Global Dairy Nutritional and Nutraceutical Ingredients Market- Impact of Coronavirus (Covid-19) Pandemic
The coronavirus pandemic has affected negatively the supply chain of food industry across the globe. The worldwide pandemic has impacted all areas of food industry. Trade restriction imposed across the globe is affecting global logistics & transportation, which has adversely affected the food & beverage industry. The prolonged restriction on trade & logistics will impact on revenues of the food industry. This is expected to affect demand for dairy ingredients from food & beverage industry between 2025 and 2025.
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Key Takeaways
On the basis of region, North America region dominated the global dairy nutritional and nutraceutical ingredients market in 2025 with a 33.2% of market share in terms of value, followed by Europe and Asia Pacific respectively.
On the basis of application in 2025, the functional food segment has accounted the largest market share of 43.5% in terms of value, followed by infant formula & clinical nutrition and dairy products segment respectively.
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