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Dairy By Products Market

ID: MRFR/FnB/3625-HCR
110 Pages
Pradeep Nandi
October 2025

Dairy By-Products Market Research Report By Product Type (Whey Protein, Lactose, Casein, Butter Milk, Skimmed Milk Powder), By Application (Food and Beverages, Animal Feed, Nutritional Supplements, Pharmaceuticals), By Source (Cow Milk, Buffalo Milk, Goat Milk), By Form (Liquid, Powder, Granules) and By Regional (North America, Europe, South America, Asia Pacific, Middle East and Africa) - Forecast to 2035.

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Dairy By Products Market Summary

As per MRFR analysis, the Dairy By-Products Market Size was estimated at 31.55 USD Billion in 2024. The Dairy By-Products industry is projected to grow from 32.5 in 2025 to 43.72 by 2035, exhibiting a compound annual growth rate (CAGR) of 3.01 during the forecast period 2025 - 2035.

Key Market Trends & Highlights

The Dairy By-Products Market is experiencing a dynamic shift towards health-conscious and sustainable practices.

  • The North American region remains the largest market for dairy by-products, driven by a robust demand for whey protein.
  • In contrast, the Asia-Pacific region is emerging as the fastest-growing market, fueled by increasing consumer interest in nutritional supplements.
  • Whey protein continues to dominate the market, while lactose is witnessing rapid growth due to its applications in health products.
  • Key market drivers include the rising demand for nutritional products and innovations in food processing technologies.

Market Size & Forecast

2024 Market Size 31.55 (USD Billion)
2035 Market Size 43.72 (USD Billion)
CAGR (2025 - 2035) 3.01%

Major Players

Dairy Farmers of America (US), Fonterra Co-operative Group Limited (NZ), Nestle S.A. (CH), Lactalis Group (FR), Danone S.A. (FR), Saputo Inc. (CA), FrieslandCampina (NL), Arla Foods (DK), Schreiber Foods, Inc. (US)

Dairy By Products Market Trends

The Dairy By-Products Market is currently experiencing a notable transformation, driven by evolving consumer preferences and increasing awareness regarding health and nutrition. As individuals become more conscious of their dietary choices, there is a growing demand for products derived from dairy by-products, such as whey protein and lactose. These ingredients are not only recognized for their nutritional benefits but also for their versatility in various applications, including food, beverages, and dietary supplements. Furthermore, the market is witnessing a shift towards sustainable practices, with manufacturers exploring innovative methods to utilize by-products that would otherwise go to waste. This trend aligns with broader environmental goals and reflects a commitment to reducing the carbon footprint associated with dairy production. In addition to sustainability, the Dairy By-Products Market is influenced by advancements in technology and processing techniques. Enhanced methods of extraction and purification are enabling producers to maximize the value of by-products, thereby expanding their range of applications. This technological evolution is likely to foster new product development, catering to diverse consumer needs. As the market continues to evolve, it appears poised for growth, driven by a combination of health consciousness, sustainability, and innovation in processing. The future landscape of the Dairy By-Products Market suggests a dynamic interplay between consumer demand and industry adaptation, potentially leading to a more robust and diversified market.

Health and Wellness Focus

The Dairy By-Products Market is increasingly shaped by a heightened focus on health and wellness. Consumers are actively seeking products that offer nutritional advantages, such as protein-rich whey and lactose-free options. This trend indicates a shift towards healthier dietary choices, prompting manufacturers to innovate and create products that align with these preferences.

Sustainability Initiatives

Sustainability is becoming a central theme within the Dairy By-Products Market. Companies are exploring ways to minimize waste by utilizing by-products that would typically be discarded. This approach not only supports environmental goals but also enhances the overall efficiency of dairy production, appealing to eco-conscious consumers.

Technological Advancements

Technological advancements are playing a crucial role in the Dairy By-Products Market. Improved processing techniques are enabling the extraction of high-quality ingredients from by-products, expanding their applications in various sectors. This innovation is likely to drive product development and meet the evolving demands of consumers.

Dairy By Products Market Drivers

Expansion of Plant-Based Alternatives

The expansion of plant-based alternatives is impacting the Dairy By-Products Market in various ways. As consumers increasingly adopt plant-based diets, there is a growing demand for dairy alternatives that incorporate dairy by-products. For example, plant-based yogurts and cheeses often utilize whey protein to enhance texture and nutritional value. This trend is supported by market data indicating that the plant-based food market is projected to reach 74 billion USD by 2027. Consequently, dairy producers are exploring innovative ways to integrate dairy by-products into plant-based formulations, thereby appealing to a broader consumer base. This intersection of dairy and plant-based products presents a unique opportunity for the Dairy By-Products Market to diversify its offerings and cater to evolving consumer preferences.

Rising Demand for Nutritional Products

The Dairy By-Products Market is experiencing a notable increase in demand for nutritional products. Consumers are increasingly seeking food items that offer health benefits, leading to a surge in the consumption of dairy by-products such as whey protein and lactose. According to recent data, The Dairy By-Products is projected to reach approximately 10 billion USD by 2026, indicating a robust growth trajectory. This trend is driven by the rising awareness of the importance of protein in diets, particularly among fitness enthusiasts and health-conscious individuals. As a result, dairy by-products are being integrated into various food and beverage formulations, enhancing their appeal and marketability. The Dairy By-Products Market is thus positioned to capitalize on this growing consumer preference for health-oriented products.

Increased Global Trade of Dairy Products

Increased global trade of dairy products is a significant driver for the Dairy By-Products Market. As international trade agreements facilitate the movement of goods across borders, dairy by-products are becoming more accessible to various markets. This trend is evidenced by the rise in exports of dairy by-products, such as cheese and whey, which are in high demand in regions with growing populations and increasing disposable incomes. For instance, countries in Asia and the Middle East are emerging as key markets for dairy imports, leading to a surge in the trade of dairy by-products. This expansion not only enhances market opportunities for producers but also fosters competition, driving innovation within the Dairy By-Products Market. As trade continues to grow, the industry is likely to see increased investment and development.

Growing Interest in Sustainable Practices

The Dairy By-Products Market is witnessing a growing interest in sustainable practices among consumers and producers alike. There is an increasing recognition of the environmental impact of dairy production, prompting stakeholders to seek ways to minimize waste and enhance resource efficiency. By utilizing dairy by-products, such as cheese whey and buttermilk, companies can reduce waste and create value-added products. This shift towards sustainability is reflected in the rising number of brands that emphasize eco-friendly practices in their marketing strategies. Additionally, regulatory frameworks are increasingly encouraging sustainable practices, further driving the adoption of dairy by-products. As sustainability becomes a key consideration for consumers, the Dairy By-Products Market is likely to benefit from this trend, positioning itself as a responsible and innovative sector.

Innovations in Food Processing Technologies

Innovations in food processing technologies are significantly influencing the Dairy By-Products Market. Advanced techniques such as membrane filtration and enzymatic processes are enhancing the efficiency of dairy by-product extraction and processing. These technologies not only improve yield but also preserve the nutritional quality of the products. For instance, the implementation of ultrafiltration in whey processing has led to higher protein concentrations, making it more appealing to manufacturers and consumers alike. Furthermore, the adoption of these technologies is expected to reduce production costs, thereby increasing profitability for dairy producers. As the industry continues to evolve, the integration of cutting-edge processing methods will likely play a crucial role in shaping the future landscape of the Dairy By-Products Market.

Market Segment Insights

By Type: Whey Protein (Largest) vs. Lactose (Fastest-Growing)

In the Dairy By-Products Market, Whey Protein leads the segment with its substantial share, primarily driven by its widespread application in sports nutrition, supplements, and functional foods. As consumers increasingly prioritize health and fitness, the demand for whey protein continues to rise, making it a dominant player in the segment. Lactose, on the other hand, is gaining traction due to the growing awareness of its applications in the pharmaceutical industry and as a cost-effective excipient in drug formulations. This increasing recognition has positioned lactose as a rapidly growing segment within the dairy by-products market.

Whey Protein (Dominant) vs. Lactose (Emerging)

Whey protein is characterized by its high nutritional value, containing essential amino acids that cater to fitness enthusiasts and athletes. Its blending properties make it a staple in protein supplements and functional food products. Conversely, lactose, a natural sugar found in milk, is notably gaining popularity as a prebiotic and ingredient for specialized dietary formulations. Its growth is propelled by the rising demand for lactose-free products and its suitability for various health applications. While whey protein remains the dominant player due to established market presence, lactose is progressively emerging as a valuable contender as manufacturers explore innovative uses and markets.

By Application: Animal Feed (Largest) vs. Nutritional Supplements (Fastest-Growing)

In the Dairy By-Products Market, the application segment is widely diversified with significant shares dominated by Animal Feed, followed closely by Food and Beverages. Animal Feed continues to capture the largest share due to its essential role in livestock nutrition, driving demand. Meanwhile, Nutritional Supplements have leveraged the growing health consciousness among consumers, leading to an upswing in their market share and contribution to overall growth.

Animal Feed (Dominant) vs. Nutritional Supplements (Emerging)

Animal Feed stands as the dominant application in the Dairy By-Products Market, primarily due to its critical importance in livestock diets. This segment's resilience is supported by the continuous need for efficient livestock production. On the other hand, Nutritional Supplements are emerging as a noteworthy segment, driven by increased awareness of diet-related health benefits. This growing trend towards functional foods and natural supplements is propelling Nutritional Supplements forward, making them a key focus area for manufacturers looking to innovate and cater to a health-conscious demographic. As a result, both segments play vital roles in transforming dairy by-products into valuable resources.

By Source: Cow Milk (Largest) vs. Buffalo Milk (Fastest-Growing)

In the Dairy By-Products Market, Cow Milk dominates the source segment, comprising the largest share due to its widespread availability, cost-effectiveness, and established consumer preferences. Buffalo Milk, while currently holding a smaller portion of the market, is rapidly gaining traction as more consumers seek out the rich, creamy texture and higher fat content it offers. Goat Milk, although a niche player, is showing steady growth driven by its health benefits and suitability for lactose-intolerant individuals.

Cow Milk: Dominant vs. Buffalo Milk: Emerging

Cow Milk serves as the cornerstone of the Dairy By-Products Market, characterized by its high protein and calcium content, making it a preferred choice for various dairy products like cheese and yogurt. Its dominance is supported by established dairy farming practices, making it readily available. Conversely, Buffalo Milk is an emerging competitor, known for its rich flavor and higher butterfat content, which is appealing for premium dairy products. The shift in consumer preferences towards gourmet and artisanal products is favoring Buffalo Milk, positioning it as a strong contender that is expected to capture more market share in the coming years.

By Form: Liquid (Largest) vs. Powder (Fastest-Growing)

In the Dairy By-Products Market, the form segment is significantly shaped by the distribution among Liquid, Powder, and Granules. Liquid dairy by-products exhibit the largest market share, driven by consumer preference for fresh, ready-to-use dairy products. Powdered forms, while holding a smaller share, are rapidly gaining traction due to their convenience and extended shelf life. Granules, though currently a minor player, work in niche applications, particularly in the food service industry and culinary sectors.

Liquid (Dominant) vs. Powder (Emerging)

Liquid dairy by-products are recognized for their dominant market position, primarily due to their versatility and popularity among consumers seeking fresh dairy alternatives. They are often used in various applications, including cooking and baking, contributing to their widespread acceptance. On the other hand, powdered dairy products represent an emerging trend, appealing to health-conscious consumers and professionals looking for easy-to-use ingredients. The growth of powdered products is fueled by advancements in technology that enhance quality and stability, catering to the demands of both end-users and manufacturers seeking longer shelf lives and ease of transportation.

Get more detailed insights about Dairy By Products Market

Regional Insights

North America : Dairy Innovation and Sustainability

The North American Dairy By-Products Market is driven by increasing consumer demand for sustainable and organic dairy products. The U.S. holds the largest market share at approximately 65%, followed by Canada at around 20%. Regulatory support for sustainable practices and innovations in dairy processing are key growth catalysts. The market is also influenced by rising health consciousness among consumers, leading to a shift towards value-added dairy products. The U.S. is home to major players like Dairy Farmers of America and Schreiber Foods, Inc., which dominate the market landscape. Canada, with its strong dairy farming tradition, is also witnessing growth, supported by companies like Saputo Inc. and Lactalis Group. The competitive landscape is characterized by strategic partnerships and investments in technology to enhance product offerings and sustainability practices.

Europe : Traditional Excellence Meets Innovation

Europe's Dairy By-Products Market is characterized by a blend of traditional dairy practices and innovative processing techniques. The region is the second-largest market, holding approximately 25% of the global share, with countries like France and Germany leading the charge. Regulatory frameworks promoting quality standards and sustainability are significant growth drivers, alongside increasing consumer preferences for diverse dairy products. France, with key players like Lactalis Group and Danone S.A., is at the forefront, while the Netherlands and Denmark also contribute significantly to the market. The competitive landscape is marked by a focus on product innovation and sustainability, with companies investing in research and development to meet evolving consumer demands. The European market is poised for growth as it adapts to changing dietary trends and environmental regulations.

Asia-Pacific : Emerging Markets and Growth Potential

The Asia-Pacific Dairy By-Products Market is rapidly expanding, driven by increasing urbanization and rising disposable incomes. Countries like China and India are the largest markets, collectively holding about 30% of the global share. The demand for dairy products is fueled by changing dietary habits and a growing middle class, alongside supportive government policies aimed at enhancing dairy production and quality standards. China leads the market with significant contributions from companies like Fonterra Co-operative Group Limited and FrieslandCampina. India is also emerging as a key player, with a focus on traditional dairy products and innovations in processing. The competitive landscape is evolving, with local and international players vying for market share, leading to increased investments in technology and distribution networks to meet consumer demands.

Middle East and Africa : Untapped Potential in Dairy Sector

The Middle East and Africa Dairy By-Products Market is characterized by untapped potential and increasing investments in dairy production. The region holds about 10% of the global market share, with countries like South Africa and Egypt leading the way. The growth is driven by rising population, urbanization, and a shift towards healthier dietary options, supported by government initiatives to boost local dairy production. South Africa is a key player, with companies like Arla Foods and local producers expanding their offerings. The competitive landscape is marked by a mix of local and international players, focusing on product diversification and quality improvements. As the region continues to develop, opportunities for growth in dairy by-products are expected to increase, driven by changing consumer preferences and investment in infrastructure.

Dairy By Products Market Regional Image

Key Players and Competitive Insights

The Dairy By-Products Market is characterized by a diverse range of products derived from the processing of milk, including lactose, whey proteins, and casein, among others. This market encompasses various segments that cater to food, feed, and pharmaceutical applications. The competitive landscape of the dairy by-products sector is influenced by evolving consumer preferences, innovative technologies, and sustainability trends. Players in this market strive to enhance product quality, manage supply chain efficiencies, and explore strategic partnerships to maintain a competitive edge.

The dynamic nature of this industry calls for continual adaptation to market demands and regulatory changes, emphasizing the importance of market research and consumer insights in shaping successful business strategies.

Lactalis Group stands out in the Dairy By-Products Market due to its extensive range and superior quality of dairy-derived offerings. Known for its strong market presence, Lactalis Group capitalizes on its robust distribution networks and established brand reputation. The company's strengths lie in its exceptional product innovation capabilities, allowing it to meet diverse consumer needs effectively. Lactalis Group has made significant investments in research and development to optimize production processes, ensuring high-quality by-products that comply with international standards.

Furthermore, its commitment to sustainability and responsible sourcing strengthens its positioning in the market, appealing to health-conscious consumers and those seeking ethically produced dairy products.

Danone is another formidable player in the Dairy By-Products Market, renowned for its wide array of yogurt and dairy-related products. The company emphasizes the nutritional value and functional benefits of its dairy by-products, which are aimed at promoting healthy lifestyles among consumers. Danone has a solid market presence backed by a strong brand image and consumer loyalty, which facilitates its ongoing expansion into emerging markets. The strength of Danone is evident in its innovative product lines that incorporate advanced nutritional research, targeting specific dietary needs.

Additionally, Danone prioritizes sustainability, aiming to reduce its environmental footprint while enhancing the quality and safety of its dairy by-products, thus further solidifying its competitive stance in the industry.

Key Companies in the Dairy By Products Market market include

Industry Developments

The Dairy By-Products Market is currently witnessing dynamic growth, driven by increased consumer demand for sustainable and nutritious products. Recently, Lactalis Group and Fonterra Cooperative Group have expanded their operations to enhance production efficiency and sustainability practices, aligning with trends favoring environmentally friendly practices. In addition, Danone has invested in innovative dairy alternatives, reflecting shifts in consumer preferences toward plant-based options. Recent acquisition activity has also shaped the market as Saputo announced its strategic acquisition of a regional dairy processing company, which allows for expanded product offerings and improved market outreach.

Furthermore, Dairy Farmers of America is exploring partnerships to innovate their product lines. As companies like Royal FrieslandCampina and Schreiber Foods focus on digital transformation and supply chain optimization, the market is expected to benefit from advanced technologies. Growth in market valuation is being fueled by rising health consciousness among consumers, propelling firms like Arla Foods and Nestle to market new fortified dairy by-products. Overall, company strategies that prioritize sustainability, technological advancement, and diversification are likely to play a crucial role in shaping the future landscape of the Dairy By-Products Market.

Future Outlook

Dairy By Products Market Future Outlook

The Dairy By-Products Market is projected to grow at a 3.01% CAGR from 2024 to 2035, driven by increasing demand for sustainable food sources and innovative processing technologies.

New opportunities lie in:

  • Development of high-value whey protein products for health-conscious consumers.
  • Expansion into plant-based dairy alternatives to capture emerging market segments.
  • Investment in advanced fermentation technologies for enhanced product differentiation.

By 2035, the Dairy By-Products Market is expected to achieve robust growth, reflecting evolving consumer preferences and technological advancements.

Market Segmentation

Dairy By Products Market Form Outlook

  • Liquid
  • Powder
  • Granules

Dairy By Products Market Type Outlook

  • Whey Protein
  • Lactose
  • Casein
  • Butter Milk
  • Skimmed Milk Powder

Dairy By Products Market Source Outlook

  • Cow Milk
  • Buffalo Milk
  • Goat Milk

Dairy By Products Market Application Outlook

  • Food and Beverages
  • Animal Feed
  • Nutritional Supplements
  • Pharmaceuticals

Report Scope

MARKET SIZE 202431.55(USD Billion)
MARKET SIZE 202532.5(USD Billion)
MARKET SIZE 203543.72(USD Billion)
COMPOUND ANNUAL GROWTH RATE (CAGR)3.01% (2024 - 2035)
REPORT COVERAGERevenue Forecast, Competitive Landscape, Growth Factors, and Trends
BASE YEAR2024
Market Forecast Period2025 - 2035
Historical Data2019 - 2024
Market Forecast UnitsUSD Billion
Key Companies ProfiledMarket analysis in progress
Segments CoveredMarket segmentation analysis in progress
Key Market OpportunitiesGrowing demand for sustainable packaging solutions in the Dairy By-Products Market presents significant opportunities.
Key Market DynamicsRising consumer demand for sustainable dairy by-products drives innovation and competition among manufacturers.
Countries CoveredNorth America, Europe, APAC, South America, MEA

Market Highlights

Author
Pradeep Nandi
Senior Research Analyst

I have a bachelor's degree in mechanical engineering and an MBA. I have more than two years of expertise in the retail, food, and beverage, chemical, and material industries, and hence have developed a sound cross-domain expertise. A firm believer in lifelong learning and sharing of knowledge. Having a proclivity for hatching ideas and trying to absorb as much information as possible in a short amount of time. Introducing corporates to the data and insight, which enables them to move from probability to possibility, has been my key areas of interest. 

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FAQs

What is the current valuation of the Dairy By-Products Market as of 2024?

The Dairy By-Products Market was valued at 31.55 USD Billion in 2024.

What is the projected market size for the Dairy By-Products Market in 2035?

The market is projected to reach 43.72 USD Billion by 2035.

What is the expected CAGR for the Dairy By-Products Market during the forecast period 2025 - 2035?

The expected CAGR for the Dairy By-Products Market during 2025 - 2035 is 3.01%.

Which segment of the Dairy By-Products Market had the highest valuation in 2024?

In 2024, the Skimmed Milk Powder segment had the highest valuation at 8.55 USD Billion.

What are the key applications driving the Dairy By-Products Market?

Key applications include Food and Beverages, Animal Feed, Nutritional Supplements, and Pharmaceuticals.

Which company is a leading player in the Dairy By-Products Market?

Dairy Farmers of America is one of the leading players in the Dairy By-Products Market.

What is the projected valuation for the Whey Protein segment by 2035?

The Whey Protein segment is projected to reach 10.5 USD Billion by 2035.

How does the valuation of the Lactose segment change from 2024 to 2035?

The Lactose segment is expected to grow from 6.0 USD Billion in 2024 to 8.0 USD Billion by 2035.

What is the expected growth trend for the Animal Feed application in the Dairy By-Products Market?

The Animal Feed application is projected to grow from 8.0 USD Billion in 2024 to 10.5 USD Billion by 2035.

Which source of milk is anticipated to have the highest valuation in 2035?

Cow Milk is anticipated to have the highest valuation, projected at 21.12 USD Billion in 2035.

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