In 2023, the global functional dairy products market is projected to be valued at USD 44 billion. From 2023 to 2033, the market is expected to grow at a CAGR of 4.5%, reaching an estimated USD 67.1 billion by 2033. This growth can be attributed to several key factors.

As individuals become more health-conscious, there is a rising demand for nutrient-rich foods that provide significant nutritional benefits. Functional dairy products effectively meet this demand, as they are fortified with essential nutrients like calcium, protein, and probiotics. Increased consumer awareness regarding health is further driving this market, with more people actively seeking dietary options that enhance their overall well-being. Consequently, functional dairy products are gaining popularity for their perceived health benefits.

Key Takeaways from the Functional Dairy Products Market

  • With a sizable market share of 21.7%, the United States dominates the field. This suggests a significant market for functional dairy products nationwide, driven by factors like health consciousness, convenience, and accessibility to a wide range of product options.
  • At 8.0%, Germany has the second-largest market share. Due to the nation’s emphasis on quality, sustainability, and innovation in food items, the German market shows an increasing interest in functional dairy products.
  • With a 4.6% market share, Japan exhibits a modest but consistent demand for functional dairy goods. This can be related to Japan’s culture of health consciousness, where people actively look for products that provide health benefits.
  • With a 2.3% market share, Australia represents a small but promising market for dairy products with beneficial properties. The demand for functional dairy products is driven by the Australian market’s emphasis on health and wellbeing and a desire for natural and organic products.
  • With market shares of 12.0% and 5.0%, respectively, China and India are prime examples of the considerable development potential in emerging economies. The expanding consumer base and increased demand for functional dairy products in these nations are mostly attributed to rapid urbanization, rising disposable incomes, and an expanding middle class.
  • The market share held by the United Kingdom is 5.7%. This is a reflection of consumers’ increased interest in functional dairy products as they place a higher priority on health and wellness and look for goods with added nutritional advantages.

Competitive Landscape

Since milk undergoes central processing, effective quality control can be easily implemented. It is widely consumed daily in consistent amounts by people across various age groups, making it an affordable option for the target population. Utilizing milk or dairy products to create functional items is a strong strategy to enhance the nutritional status of the population.

Given its many benefits, milk has been extensively studied for the development of more effective functional products featuring probiotics, vitamins, minerals, and other bioactive compounds. Key players in the global functional dairy products market are investing heavily in research and development to create innovative products. Additionally, some companies are pursuing mergers and acquisitions to co-develop new offerings and strengthen their market positions.

For instance,

  • In June 2022, Danone North America launched Activia+ Multi-Benefit Probiotic Yogurt Drinks that include billions of active and live probiotics to help support one’s gut health. The product is also considered to be an excellent source of zinc and vitamin D & C for supporting the immune system.

Key Companies Profiled

Archway Food Group; General Mills Inc.; Anand Milk Union Limited; Dairy Farmers of America Inc.; Kraft Foods Inc.; Arla Foods UK Plc.; Nestle SA; Parmalat S.P.A; Megmilk Snow Brand Co. Ltd; Dean Foods Company; Fonterra Co-operative Group; Lactalis International; Danone SA; Other

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Functional Dairy Products Market Outlook by Category

By Product Type:

  • Yogurt
  • Cheese
  • Butter
  • Milk
  • Others

By End Use:

  • Retail / Household
  • HoReCa
  • F&B Industry

By Distribution Channel:

  • B2B
  • B2C
  • Hypermarkets/Supermarkets
  • Convenience Stores
  • Specialty Stores
  • Traditional Groceries
  • Online Retailers

By Region:

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia
  • Oceania
  • Middle East and Africa

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