Global Dairy Products Market Outlook, 2029

Market Dynamic

Market Drivers • Rising Health Consciousness: With a growing awareness of the importance of protein in a balanced diet, dairy products, being a rich source of high-quality proteins, are witnessing increased demand. Protein is crucial for muscle development, satiety, and overall health, and dairy products offer a convenient and palatable way to meet these nutritional needs. The aging population and rising concerns about osteoporosis and bone-related issues have led to a heightened demand for dairy products rich in calcium and other essential minerals. Consumers are recognizing the role of dairy in maintaining strong and healthy bones. • Rapid Urbanization and Changing Lifestyles: Urbanization has resulted in busier lifestyles, driving the demand for convenient and portable food options. Dairy products, such as yogurt cups, cheese snacks, and single-serve milk products, are becoming popular choices for on-the-go consumers, providing a quick and nutritious solution for busy schedules. As disposable incomes rise, consumers are more willing to spend on premium and value-added dairy products. This includes specialty cheeses, organic and artisanal dairy items, and products with added health benefits, contributing to the overall growth of the dairy market. Market Challenges • Lactose Intolerance and Dairy Allergies: A significant challenge for the dairy industry is the increasing awareness of lactose intolerance, leading some consumers to seek non-dairy alternatives. This has prompted the development and promotion of lactose-free and plant-based dairy alternatives to cater to individuals with specific dietary restrictions. Allergies to dairy proteins are also a concern, leading to the development of allergen-free alternatives. This challenge necessitates innovation in product development and marketing to address the needs of those who cannot consume traditional dairy products. • Environmental and Sustainability Concerns: The dairy industry faces scrutiny for its environmental impact, including greenhouse gas emissions and land use. Concerns about sustainability and ethical practices are leading to the development of more eco-friendly and sustainable approaches within the dairy sector, including efforts to reduce carbon emissions and adopt responsible farming practices. The rise of plant-based alternatives, driven by environmental concerns and the desire for cruelty-free products, poses a challenge to traditional dairy producers. The market for plant-based milk, cheese, and yogurt has grown significantly, impacting the market share of conventional dairy products. Market Trends • Plant-Based Dairy Alternatives: The growing trend toward plant-based diets and flexitarianism has led to an increased demand for plant-based dairy alternatives. Products made from almonds, soy, oats, and other plant sources are gaining popularity, offering a cruelty-free and environmentally sustainable option for consumers. The plant-based dairy sector is witnessing continuous innovation, with manufacturers developing new products, flavors, and formulations to mimic the taste and texture of traditional dairy. This trend is likely to continue as the market expands. • Premiumization and Specialty Dairy Products: Consumers are showing a growing interest in unique and high-quality dairy products, leading to an increased demand for artisanal and specialty cheeses. Producers are capitalizing on this trend by offering unique flavor profiles, production methods, and branding to differentiate their products. The market is witnessing a surge in the demand for dairy products with added functional benefits, such as probiotics, omega-3 fatty acids, and vitamins. Functional dairy appeals to health-conscious consumers looking for products that offer more than just basic nutrition. Covid-19 Impacts Lockdowns, restrictions on movement, and disruptions in transportation posed significant challenges to the dairy supply chain. These disruptions affected the timely delivery of raw materials, packaging, and finished products, leading to temporary shortages in some regions. Restrictions and safety measures implemented to curb the spread of the virus resulted in labor shortages, affecting dairy farms and processing plants. The shortage of skilled labor impacted production capacities, contributing to supply chain bottlenecks. The closure of restaurants, cafes, and foodservice establishments led to a decline in demand for certain dairy products meant for the hospitality sector. Conversely, there was an increase in demand for dairy products in retail channels as consumers shifted towards cooking and consuming meals at home. With lockdowns and social distancing measures in place, there was a surge in online shopping for groceries, including dairy products. E-commerce platforms became vital channels for consumers to access a wide range of dairy items without visiting physical stores. The dairy industry heavily relies on international trade, and disruptions in global logistics and trade routes affected the export and import of dairy products. Fluctuations in currency values and changing demand dynamics in different regions further influenced export volumes. The dairy industry experienced price volatility for raw materials, such as milk, due to supply chain disruptions and changing demand patterns. Producers faced challenges in managing costs and maintaining stable pricing for their products. Some consumers opted for more budget-friendly options, influencing the demand for certain dairy products. Dairy products, known for their nutritional value, including vitamins, minerals, and proteins, gained attention as consumers sought to bolster their overall health. There was an increased interest in functional dairy products with added health benefits, such as probiotics and vitamins, to address specific health concerns. Producers responded to consumer demand by innovating and introducing products that align with emerging health trends.

Key Development

• May 2023: Aavin is a state government co-operative that announced the launch of its all-new milk products fortified with vitamins A and D. As per the company, these new launches are to estimate the demand for fortified milk products in the market. • August 2022: Dairy Farmers of America (DFA) acquired two Extended Shelf-Life (ESL) processing facilities from Smith Foods. The two processing plants are in Pacific (Missouri) and Richmond (Indiana) in the U.S. These facilities became part of the DFA’s dairy brands division and operated as Pacific Dairy Solutions and Richmond Beverage Solutions. • October 2022: Unilever partnered with ASAP to distribute its ice creams. Under the partnership, ASAP will also deliver ice cream and snacks from Unilever's virtual store, The Ice Cream Shop. • July 2022: GCMMF launched over 100 products, including products from different categories. These products include milk items in several variants of ginger, tulsi, and turmeric. Out of these 100 products, most of the products are milk-based. Therefore, this product launch helped the company expand its business through the expansion of its product portfolio.