Dairy Protein Market Size, Share & Trends Analysis Report By Type (Casein and Derivatives, Whey protein, Milk Protein Concentrate), By Application (Food and Beverages, Nutrition, Personal Care and Cosmetics, Feed, Others), By Form (Solid, Liquid) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global dairy protein market size was valued at USD 13.27 billion in 2023 and it is anticipated to reach USD 20.95 billion by 2032, at a CAGR of 5.2% during the forecast period (2024-2032). Whey and casein protein are consumers' most preferred sources of protein supplements, which is likely to drive the demand for the dairy protein market. 

Dairy proteins are nutritional ingredients used to prepare a range of food products. They have many functionalities and bioactivities which are helpful in the processing of food products. Dairy proteins such as whey protein, casein, and milk protein work as gelling agents, thickening agents, carriers, foaming agents, and texture modifiers in preparing a wide range of food products. They are also widely used in various industries, including animal feed, personal care, nutrition, and textiles. Food & beverage ingredient manufacturers have invested a lot in R&D to enhance the taste, characteristics, or nutritional value of dairy protein.

Market Dynamics

Global Market Drivers

Increase in Demand for Protein as Nutritional and Functional Ingredients

Proteins are the building blocks of bones, skin, muscles, and blood. The human body requires protein to produce hormones, enzymes, and other body chemicals. Currently, protein supplements are used on a large scale due to the rise in healthcare awareness among people and obesity concerns. Consumers are altering their focus to nutritional and healthy diets and increasing their protein consumption to receive extra nutrients from protein supplements made with dairy protein, which in turn feeds the rise of dairy protein. This, in turn, fuels the growth of dairy protein. Whey and casein protein are consumers' most preferred sources of protein supplements, which is likely to drive the demand for the dairy protein market.

Consumer Awareness Regarding Healthy Diet

With the rise in health care concerns and surge in fitness trends among youth, the shift toward healthy products such as protein supplements is expected to experience significant growth. Consumers vastly prefer dairy protein due to its high nutritional benefits. Moreover, economic conditions and a rise in the GDP of various developing countries are expected to fuel the growth of the dairy protein market.

Global Market Restraint

The Surge in Demand for Plant-Based Protein

Non-vegetarian consumers are gradually reducing the consumption of animal-based food such as beef, pork, and poultry and are significantly accepting a vegetarian lifestyle. This shift is observed due to consumer preferences for a healthy diet. As meat and meat products often contain harmful pesticides through the food they eat and chemicals used for their fast growth, their high consumption can be risky. In addition, consumers are concerned about the hygiene practices adopted in the rearing of animals on farms. Thus, consumers are in search of alternatives to animal-based proteins. Plant-based proteins offer a practical and eco-friendly alternative to animal proteins, which will likely restrain the growth of the dairy protein market for the period under consideration.

What Are Future Growth Opportunities in the Global Dairy Protein Market?

Introduction of Protein Supplements in the Untapped Market

Protein supplements and protein-based food products are still in nascent stages in various regions of Africa, such as Zimbabwe, Burundi, Liberia, Eritrea, and other developing regions. These are still untapped, which presents an excellent opportunity for manufacturers of protein supplements. Moreover, these regions are still unaware of the benefits of protein supplements, which are expected to provide lucrative opportunities for market growth.

Regional Analysis

Region-wise, the global dairy protein market share is analyzed across North America, Europe, Asia-Pacific, and LAMEA. 

North America was the highest revenue contributor and is estimated to grow with a CAGR of 4.8% during the forecast period. According to a study conducted by IHRSA as part of the Physical Activity Council, more than one in five Americans (21.8%) were members of a health club or studio in 2021, totaling 66.5 million consumers ages 6 and older. The fitness industry is projected to expand at a faster rate in the coming years. This is attributable to a rise in U.S. consumers adopting a healthy lifestyle or indulging in activities promoting active and healthy lifestyles. Presently, about 20% of American adults have fitness club memberships, and the number is expected to increase. In addition, an increase in demand for protein-rich food, owing to the number of health-conscious customers, is anticipated to propel market growth. Consumers are gradually shifting their preference from convenience food to dairy protein products, further boosting the market growth.

Europe is the second-largest region. It is estimated to reach USD 5321 million by 2031 at a CAGR of 4.2%. The market for dairy protein such as milk protein concentrate is likely to grow significantly, owing to their increasing consumption in many foods & beverages preparations such as bakery products, snacks, and confectioneries. Milk protein concentrate and whey protein have witnessed increased demand from the personal care & cosmetics industry in Europe. Furthermore, the rise in demand for refreshment/sports drinks, along with the growth in sports participation from youth in the region, leads to increased consumption of casein & derivatives, which is anticipated to grow at the highest growth rate during the forecast period.

Asia-pacific is the fastest-growing region. Dairy Protein is widely used in the food & beverages and nutrition industries in many Asian countries. With the growth in awareness about casein & derivatives and whey protein as sports or refreshment drinks, the market for casein & derivatives and whey protein is also growing in the region at a significant rate. Milk protein concentrate is widely used as an ingredient in skincare products, which has gained popularity in the recent past and is expected to drive the market for milk protein concentrate in the future. China is the major consumer of dairy protein in Asia-Pacific, followed by Japan and Australia. 

Segmental Analysis

The global dairy protein market share is segmented on type, application, form, and region.

By type, the global dairy protein market is bifurcated into casein & derivatives, whey protein, and milk protein concentrates. Whey protein is likely to lead the dairy market globally, owing to its widespread application in the personal care & cosmetics industry. Moreover, the demand for whey protein will grow at a CAGR of 4.4% during the forecast period. Whey protein is traditionally used among athletes and bodybuilders to promote overall body growth and muscle building. The surge in demand for sports nutrition products and their value-added tag as clean label ingredients are the two main factors contributing to the market's overall growth. Asia-Pacific and LAMEA are expected to witness significant growth rates in value sales during the forecast period.

The casein and derivatives segment is the fastest-growing segment. Casein protein is a slow-digesting dairy protein that customers often take as supplements. The factor affecting the growth of the casein & derivatives proteins are surging demand for dietary supplements, expansion of prominent dairy-based vendors, and increasing consumption of proteins, vitality bars, and caffeinated drinks. Moreover, a rise in health ailments, owing to the hectic busy work schedule of consumers, is anticipated to nudge the market's growth during the forecast period. Asia-Pacific and LAMEA are expected to witness significant growth rates during the forecast period.

Milk protein concentrate is the second largest segment. It is used mainly in the food & beverages, personal care & cosmetics industries. In addition, it has also been used in nutrition industries recently and is likely to experience incremental demand in the future. Asian countries are significant producers and exporters of milk protein concentrate and cream. China and Japan are the leading exporters of milk protein concentrate, followed by India and Australia, creating immense potential for the segment's growth.

By application, the global dairy protein market is divided into food & beverages, nutrition, personal care & cosmetics, feed, and others. Food & beverages is the leading segment globally owing to the rise in the use of whey protein and milk protein concentrate in the food & beverages industry. It is estimated to grow at a CAGR of 4.4% during the forecast period. The rise in demand for dairy protein and other milk-extracted protein drives the global market for dairy protein. Increasing consumer demand for high nutritional drinks in the U.S. and Canada is anticipated to increase the demand for food & beverages in the region. The need for dairy protein products has been growing recently, owing to the growth of health-conscious consumers. Consumers get attracted to product offerings with attractive packaging and innovative flavors of dairy protein in the market, which, in turn, augments the growth of the food & beverages segment in the market.

The nutrition dairy protein market is the fastest-growing segment. Active and health-conscious consumers have shifted their preference toward nutritional drinks and products. Hence, the demand for dairy protein as an energy drink is increasing in developed countries due to its excellent nutritional properties such as electrolytes and nutrients. The need for dairy protein in the nutrition industry is also growing worldwide. Manufacturers are offering new flavors of milk protein concentrates and casein & derivatives due to the changing taste preference of customers. Such factors are anticipated to boost the growth of the segment.

The personal care and cosmetics dairy protein market is the third-largest segment. Demand for high protein content in cosmetics & personal care products is gaining significant traction in various emerging nations such as the U.S., Germany, and China. The strong desire among adults to retain youthful appearances has nurtured the cosmetics & personal care industry globally. Various manufacturers have observed growth in the trend of using protein ingredients in cosmetics. This trend has increased customers' demand for natural & organic cosmetics products. Moreover, consumer awareness regarding health, coupled with growth in cosmetics & personal care applications, spurs the market growth.

By form, the global dairy protein market is bifurcated into solid and liquid. The solid form of the products dominated the market. It is estimated to grow at a CAGR of 4.7% during the forecast period. This is attributed to its better stability and ease of handling and storage in liquid form. A solid protein format is the preferable way of consumption for its target customers. The solid form of proteins influences the physical bulk state characteristics of the formulation. These forms of protein are gaining popularity in the food & beverages sector as it is high in calcium, protein, and vitamins. Moreover, it can be easily transported.

The liquid dairy protein market is the fastest-growing segment. The liquid form of protein is a mixture of raw materials and supplements derived from animals or plants and various sources as by-products. The liquid form offers a concentrated source of protein for people with increased protein needs. Liquid dairy protein is used for involuntary weight loss, pre-and post-surgery, anorexia, stress, and trauma. Increasing demand for liquid protein functionalities, consumer awareness about healthy diet & nutritional food, and innovations in product development in the dairy protein industry are likely to drive the market growth during the forecast period.

Impact of covid-19

As per the WHO, the number of reported COVID-19 cases jumped from 87,137 on March 01, 2020, to 102,083,344 as of February 01, 2021, with approximately 2,209,195 deaths globally. The rapid rise in the number of confirmed COVID-19 cases globally resulted in the governments of various countries resorting to stringent containment measures to slow down the spread of the pandemic. However, complete lockdowns across countries also resulted in a short-term decline in the GDPs of their respective economies.

The COVID-19 pandemic had e a dual effect on the electronics industry, wherein the manufacturing of electronics components was halted due to lockdowns imposed in various countries, coupled with slower logistical processes and supply interruptions. Furthermore, the unavailability of labor globally has also contributed negatively to the manufacturing of electronic components.

The discontinuation in the delivery of electronics products by e-commerce companies during the lockdown, as they were considered non-essentials, negatively impacted the electronics industry. However, increased demand for laptops, computers, and mobile phones due to work-from-home situations positively affected the electronics industry.

The Chinese economy was hit tremendously as it was the epicenter of the COVID-19 pandemic, disrupting the supply chain for major electronic brands. As China is the major exporter and manufacturer of raw materials required to produce electronic products, this has led to the halting of the ongoing production of electronics in the U.S. and Europe, thereby creating a demand-supply gap.

Recent Developments

• May 2022 - ADM, a global leader in nutrition and sustainable solutions, announced it would invest to significantly expand starch production at its Marshall, Minnesota, facility to meet fast-growing demand from the food and beverage sectors and to support the continued expansion of the company's BioSolutions platform.
• April 2022 - As the firm continues to build capacity to meet strong demand growth, ADM, a global leader in nutrition, announced that it would invest nearly $300 million to expand its alternative protein manufacturing in Decatur, Illinois. ADM's alternative protein capabilities will be bolstered by the inauguration of a new, cutting-edge Protein Innovation Center in Decatur.
• February 2022 - ADM announced the successful pricing of its first sustainable bond, which will support initiatives to advance the company's goals across the environmental, social, and governance ("ESG") spectrum. ADM agreed to issue $750 million in aggregate principal amount of 2.900% notes due 2032. The offering is expected to close on February 28, 2022, subject to the satisfaction of customary closing conditions.
• May 2022 - Friesche Vlag introduces Barista Oat, the brand's first plant-based product for The Netherlands. This oat drink has a mild flavor and is easy to foam, making it ideal for cappuccinos or macchiatos. Its launch is in response to growing consumer demand for plant-based alternatives, giving coffee fans a broader range to choose from.
• April 2022 - FrieslandCampina published its climate plan 'On the way to climate-neutral dairy' as part of its integrated Nourishing a better planet sustainability program. FrieslandCampina is aiming to produce net climate-neutral dairy by no later than 2050. The climate plan contains clear targets and concrete actions, with a checkpoint being a significant reduction in greenhouse gas emissions by 2030.