Milk Protein Market: Growth Drivers and Challenges

Growth Drivers:

New baby formulas and clinical nutrition applications: The milk protein market is growing rapidly owing to its wide application in infant formulae and clinical nutrition products. In July 2024, Arla Foods Ingredients announced the entry of a novel fraction of milk protein developed for infant formula should lead further toward achieving the overall status of infant milk to mimic human milk and support the overall development and growth of infants. With the increasing birth rate in developing countries and acceleration in early child nutrition awareness, the demand for high-quality milk protein in infant formula is likely to surge.
Greater emphasis on health: The health benefits that protein consumption provides have become apparent. Also, consumers are increasingly looking for protein-rich food and beverages to help enrich their daily diet in pursuit of multiple health needs, starting with weight management to muscle building, amongst others. The same is true for the sports nutrition segment, where milk proteins find ready appreciation thanks to their complete amino acid profile, coupled with excellent digestibility. In October 2023, Glanbia Nutritionals added a new clear protein beverage, whey protein isolate, to the marketplace as demand for sports nutrition's functional drinks continues to rise.
Technological advancements in protein processing: The advancements in protein extraction and processing technologies have opened further possibilities for the dairy ingredients-producing sector to prepare a milk protein ingredient characterized by far higher functionality but even greater purity and sensory characteristics. Advanced membrane filtration makes it possible to produce milk protein concentrates with tailor-made protein profiles that fit different end-use applications. For example, in June 2023, GEA Group announced the launch modules of a new ultra-filtration system to produce milk protein to obtain an increase in yield of up to 10%, with a reduced energy consumption that benefits the economic and environmental sustainability of milk protein manufacturing.

Challenges:

Environmental sustainability concerns: The milk protein sector has seen an immense demand from environmental concerns, with dairy farming attributed to greenhouse gas emissions and water use in processing. This has impelled the industry players to make an investment in production methods that are environmentally friendly and a step towards carbon emissions reductions. However, implementation of the practices might be costly, complex, and elevate the cost of the output with rippling implications on the competitive price of products in the market.
Quality standards and regulatory hurdles: Navigating the complex landscape of food safety regulations and quality standards across different markets is quite a challenge for milk protein manufacturers. Strict food regulations, stringent control of labeling, food additive use, and production-related processes by governments worldwide have seen manufacturers invest heavily in such compliance measures, quality assurance systems, etc. This may be a difficult task for smaller producers or those looking to expand to new international markets.

Milk Protein Market: Key Insights:

Base Year	2023
Forecast Year	2024-2036
CAGR	6.5%
Base Year Market Size (2023)	USD 12.5 billion
Forecast Year Market Size (2036)	USD 28.3 billion
Regional Scope	North America (U.S. and Canada) Asia Pacific (Japan, China, India, Indonesia, Malaysia, Australia, South Korea, Rest of Asia Pacific) Europe (UK, Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe) Latin America (Mexico, Argentina, Brazil, Rest of Latin America) Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)

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Milk Protein Segmentation

Product Type (Concentrates, Hydrolyzed, Isolates, Others)

Among the product types, the hydrolyzed segment accounts for a 42% share in 2024. Hydrolyzed milk proteins are well consumed due to their relative digestibility and less allergenicity compared to other types of milk protein, and therefore, find a deep application in baby food and sports materials. Companies are investing in the research and development of hydrolyzed milk proteins. For example, in July 2024, Arla Foods Ingredients obtained FDA approval of high-nutrition hydrolyzed whey protein. These proteins are hydrolyzed into smaller peptides for enhanced absorption, easier digestion, and rapid nutrient uptake, especially in people with digestive sensitivities. Increasing demand for clean-label, easily digestible protein sources further drive the segment's growth.

Form (Powder, Liquid)

By form, the powder segment dominates the milk protein market and is estimated to hold a 65% share in 2024. Powdered milk proteins, on the other hand, not only extend shelf life but are also easily transportable and storable until the need arises for such products in food formulation. Powdered milk proteins can be easily included in many types of food and beverage products, thereby being an ideal choice for manufacturers across industries. This convenience factor for the consumers is an additional contributing factor in segments like sports nutrition and dietary supplements. The ability to exactly set protein content and the easy, convenient reconstitution of the powder, with active interest, pointed more toward industrial use than consumer applications.

Application (Food & Beverages, Nutraceuticals & Dietary Supplements, Pharmaceutical, Cosmetics & Personal Care, Infant Formula, Pet Care Industry, Others)

By application, the food & beverage segment leads the milk protein market and is likely to contribute over 25% of the share by 2037. All these dairy-based foods can, therefore, use any form of milk protein to develop wide product lines, from bakery to confectionery and beverages. This increasingly furthers the use of milk proteins for food and beverage formulation due to the push for clean labels and natural ingredients.

The increased popularity of high-protein diets alongside the never-ending awareness of health-related properties linked to milk proteins has fueled this segment. In January 2024, Nestle developed a technique to reduce the fat present in milk sugar to capture the opportunity around increased consumer interest in meals and snacks in the dairy and beverages category.

Our in-depth analysis of the milk protein market includes the following segments:

Product Type	Concentrates Hydrolyzed Isolates Others
Form	Rigid Flexible Rigid-flex
Form	Powder Liquid
Application	Food & Beverages Nutraceuticals & Dietary Supplements Pharmaceutical Cosmetics & Personal Care Infant Formula Pet Care Industry Others

Milk Protein Industry - Regional Scope

Asia Pacific Market Analysis:

Asia Pacific's milk protein market is predicted to hold 35% revenue share in 2024. This is attributed to numerous factors, such as rising disposable income, dietary modification, and increasing awareness of health benefits accompanied by protein consumption. In India, the milk protein market is growing at a rapid rate, with an increasing product base as a result of the increasing population and urbanization, as well as an increase in the sale of protein-based processed food and drinks.

India’s milk protein market is growing due to an increase in government efforts to ensure the nutrition and safety of food, as well as the growth in intake of Western-style dairy comprising a great volume of milk protein. In Japan, the market is growing due to an increasing geriatric population as well as functional and nutritional food consumers.

Companies in Asia Pacific are quite aggressive in their innovation pursuits to cater to the varied needs of consumers from different countries. Many players are now developing products that although locally favored, get the nutritional mandates from milk proteins. For instance, in March 2024, Yili Group launches into the Chinese milk protein market with a new line of high-protein milk products with some milk protein fractions available to help maintain immune health. Together with the national nutrition guidelines, the Chinese government is also improving stimulation for the consumption of milk and milk products, which stimulates the demand for milk proteins.

North America Market Analysis:

The milk protein market in North America is poised for steady growth from 2024 to 2036 due to increasing consumer sophistication in health and wellness and increased demand for functional food and sports nutrition products. This is based on the region's strong food and beverage market, coupled with a growing trend toward protein-enriched products that can create huge opportunities for milk protein manufacturers. Additionally, the rapidly increasing market for clean-label and natural ingredients serves to boost the demand for milk proteins in various applications.

Companies in North America's milk protein market invest continuously in the development of innovative products that cater to changing consumer preferences. Meantime, the government has been proactive in supporting the dairy industry in Canada in various means. In recent data by Agriculture and Agri-Food Canada, the eagerness of other countries for Canadian dairy ingredients made the country escalate its exportation of milk protein products to 12% more in 2023 than in past years. As a result, several manufacturers are focusing on launching functional and nutritionally specialized innovative milk protein ingredients.

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Companies Dominating the Milk Protein Landscape

The global milk protein market is significantly competitive, with players such as Nestlé SA, Danone, and Arla Foods at the leading position. These companies maintain an edge in the competition due to their extensive availability of resources and innovation capabilities. Other players like Fonterra Co-operative Group and Lactalis Group are also key participants contributing through continuous product launches and geographical expansions. Industry leaders are refreshing their product lines due to the increasing consumer demand for more high-protein, health-oriented, and sustainable food options.

In March 2024, Haven, New Zealand's premium infant nutrition company, launched the world's first 100% oat-based toddler drink: Heaven Oat. This new product is specially designed for dairy-intolerant children and plant-based parenting. It is an indication of the trend in the industry toward alternative and plant-based feeding solutions. This development mirrors a growing trend among firms to broaden their product offerings in line with the changing dietary preferences of the world consumer base.

Here are some leading companies in the milk protein market:

Fonterra Co-operative Group Limited
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
DMK Deutsches Milchkontor GmbH
Agropur Cooperative
Saputo Inc.
Arla Foods Ingredients Group P/S
FrieslandCampina Ingredients
Lactalis Ingredients
Glanbia plc
Kerry Group plc
Dairy Farmers of America, Inc.
Nestlé S.A.
Chr. Hansen Holding A/S
Groupe Lactalis SA
Danone S.A.
Land O'Lakes, Inc.

In the News

In July 2024, U.S.-based Ripple Foods launched Ripple Shake Ups Protein Shakes; these have been the first and only kids' protein shake designed to take on the challenges of "tweenage hanger" with a satisfying combination of 13g of plant-based protein and 3g of filling fiber.
In February 2024, Vivici—a start-up created by both Fonterra and DSM-Firmenich, which is based in New Zealand and the Netherlands, respectively—announced that it is ready to supply volumes at a commercial level of whey protein. At just over a year since its inception, this has become a huge step in shaking up the US 'animal-free dairy' category.
In February 2024, Swiss multinational Nestlé SA launched Better Whey, its first precision fermentation dairy protein powder. This lactose-free, animal-free whey isolate product was launched under the brand Orgain, in which Nestle acquired a majority stake in 2022 to strengthen its leading position in functional nutrition.
In November 2023, Valio launched Valio Eila MPC 65—a new milk protein concentrate to help manufacturers make products with better taste and healthiness in high-protein products by capitalizing on Valio's expertise in lactose-free milk proteins to meet growing global market demand.

Global Market Size, Forecast, and Trend Highlights Over 2024-2036