US Dairy By-Products Market Size was estimated at 6 (USD Billion) in 2023. The US Dairy By-Products Market Industry is expected to grow from 6.5(USD Billion) in 2024 to 9.1 (USD Billion) by 2035. The US Dairy By-Products Market CAGR (growth rate) is expected to be around 3.106% during the forecast period (2025 - 2035).
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The US Dairy By-Products Market is witnessing several significant trends shaped by consumer preferences and market dynamics. One key market driver is the increasing focus on sustainability, leading dairy producers to find value in by-products such as whey protein and lactose, which are often underutilized. This trend is supported by government incentives promoting waste reduction and resource optimization within the dairy industry. The growing demand for healthier food options also plays a crucial role, with by-products being incorporated into functional foods and beverages that offer nutritional benefits, thereby catering to health-conscious consumers.
Furthermore, there are ample opportunities to be explored in the food and beverage sector, particularly with the rise of plant-based diets and the integration of dairy by-products into alternative protein sources. As more consumers seek protein-rich, nutrient-dense foods, dairy by-products can help meet this demand while positioning dairy brands favorably in the market. The rise of e-commerce and online grocery shopping is another trend that has opened new channels for dairy by-product sales, allowing producers to reach broader audiences more effectively. In recent times, there has been a noticeable shift towards innovative processing technologies that enhance the functionality and quality of dairy by-products.
This has led to the development of new products, such as dairy-derived ingredients in food formulation and personal care items. This blend of health-focused consumer interests and technological advancements highlights a transformative phase for the US Dairy By-Products Market, indicating continued growth prospects in the near future.
The growing awareness of the nutritional benefits of dairy by-products is significantly driving the US Dairy By-Products Market Industry. The United States Department of Agriculture reports that around 90 percent of the American population does not meet the recommended daily dairy intake, which indicates a substantial opportunity for the proliferation of dairy by-products like cheese, yogurt, and whey protein. This growing concern for meeting nutritional goals, combined with an increasing trend towards protein-rich diets and clean labels, offers a favorable growth environment for the dairy by-products sector.Established organizations in the dairy industry, such as the National Dairy Farmers Association, are promoting these products for their health benefits, leading to a forecasted increase in demand over the next decade, thereby contributing positively to the market's value and expanding consumer reach.
Sustainability has become a core focus in the United States, with policies encouraging waste reduction and by-product utilization. The Environmental Protection Agency (EPA) indicates that food waste constitutes approximately 30-40 percent of the food supply in the U.S., and converting dairy processing waste into valuable by-products not only combats waste but enhances profitability for dairy processors. By leveraging technologies that transform whey and other by-products into energy and animal feed, dairy companies are not only optimizing their operations but also contributing to circular economy principles.This move towards sustainability is supported by various dairy cooperatives and organizations that actively promote environmental stewardship, thus fostering market growth in the US Dairy By-Products Market Industry.
Innovations in processing technologies are playing a crucial role in the growth of the US Dairy By-Products Market Industry. According to the US Dairy Export Council, technology advancements have enhanced the efficiency of extracting value from dairy by-products. Techniques such as membrane filtration and enzymatic treatment significantly improve the yield and quality of by-products like lactose and protein isolates. This increase in efficiency is evidenced by a reported 25 percent rise in whey protein production between 2015 and 2020, as per industry data.Major dairy corporations, including Land O'Lakes and milk producers associations, are investing heavily in Research and Development (R&D) to further enhance product offerings and processing capabilities, ensuring sustained growth within the market.
US Dairy By-Products Market Segment Insights
Dairy By-Products Market Product Type Insights
The US Dairy By-Products Market is a multifaceted sector that encompasses a variety of products derived from the processing of milk. The Product Type segment is crucial in understanding the overall industry dynamics and market trends. Among these, Whey Protein stands out due to its widespread popularity as a supplement among athletes and fitness enthusiasts, primarily due to its high protein content and essential amino acids. The nutritional benefits associated with Whey Protein lead to its extensive use in food formulations, thereby driving its demand significantly. Lactose, another vital component of the Dairy By-Products Market, serves both as a sweetener in various food products and as a key ingredient for infants in the form of baby formula.
Its demand is primarily influenced by consumer preferences towards healthier options, where Lactose provides functional benefits that enhance the overall market growth. Casein, noted for its slow digestion properties, is often preferred by those interested in muscle recovery and growth. It forms a significant part of many nutritional products, contributing to a steady revenue stream in the Dairy By-Products segment. Buttermilk, traditionally a by-product of butter production, has regained popularity in recent years as a flavorful and versatile ingredient in cooking and baking, capitalizing on the growing trend towards natural and organic ingredients in the US culinary landscape.
Moreover, Skimmed Milk Powder, a popular dairy ingredient with various applications in confectionery, baked goods, and infant nutrition, is significant due to its convenience and longer shelf-life, addressing consumer trends for healthier and portable food options. The dynamics of these Product Types and their applications not only support the industry's growth but also reflect the changing consumer behaviors and preferences in the US. Factors like health consciousness, dietary trends, and an inclination toward protein-rich diets consistently drive the market, showcasing the important role these products play in both daily nutrition and the overall dairy industry landscape. The diversification of applications across various food sectors also presents numerous opportunities for innovation and expansion within the Dairy By-Products Market.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Dairy By-Products Market Application Insights
The Application segment of the US Dairy By-Products Market plays a pivotal role in driving overall demand and growth, reflecting diverse industry uses of dairy derivatives. This segment encompasses various applications, including Food and Beverages, Animal Feed, Nutritional Supplements, and Pharmaceuticals. The Food and Beverages category demonstrates significant importance as it utilizes dairy by-products for flavor enhancement, texture, and nutritional fortification, serving both the consumer market and the food processing industry. Meanwhile, Animal Feed represents a substantial component, as dairy by-products contribute essential nutrients that improve livestock health and productivity.Nutritional Supplements are gaining traction, driven by consumer trends towards health and wellness, where dairy-derived components are integral in providing protein and functional benefits. Additionally, Pharmaceuticals leverage dairy by-products in manufacturing processes, highlighting their versatile applications. Together, these areas drive innovation within the US Dairy By-Products Market, responding to evolving consumer preferences and providing critical opportunities for growth. Market trends show increasing incorporation of dairy by-products in sustainable production practices, underscoring their significance in a rapidly changing market landscape.
Dairy By-Products Market Source Insights
The US Dairy By-Products Market, segmented by Source, comprises Cow Milk, Buffalo Milk, and Goat Milk, each contributing uniquely to the overall dynamics of the industry. Cow Milk is the dominant source, accounting for the majority of dairy by-products, owing to its widespread availability and versatility in various dairy products. Buffalo Milk, while less prevalent, serves niche market needs and is valued for its creaminess and richness, often leading to specialty products in the gourmet sector. Goat Milk, known for its digestibility and nutritional benefits, has gained traction among health-conscious consumers, further diversifying the Dairy By-Products Market.The demand for organic and sustainably sourced milk is another growing trend influencing these segments. With an increasing focus on quality and nutritional value, the US Dairy By-Products Market is expected to see shifts in consumer preferences, driving innovation across all sources. Efficient production practices and advancements in processing technology are also crucial components that support growth in this sector, reflecting the ongoing changes in consumer lifestyles and dietary patterns.
Dairy By-Products Market Form Insights
The US Dairy By-Products Market focuses significantly on the Form segment, which includes Liquid, Powder, and Granules. This market segment plays a vital role in the overall industry, reflecting a preference in consumer demand for different forms of dairy by-products based on usability and versatility. Liquid dairy by-products are essential due to their widespread applications in beverages and as ingredients in many food products. The Powder form, which is often used for longer shelf life and easier transportation, is increasingly popular in the food processing sector, catering to both industrial and consumer needs.Granules, on the other hand, offer unique advantages for specific applications, such as in baking and as nutritional supplements, thus making their presence significant in niche markets. Each form contributes uniquely to the diversity of the market and is shaped by evolving dietary trends and consumer preferences in the US, including a growing inclination towards protein-enriched products. This segmentation showcases market growth opportunities driven by innovation and adaptability in product offerings, allowing manufacturers to meet varied consumer needs and leverage emerging trends effectively.The dynamic nature of the US Dairy By-Products Market also presents challenges, such as ensuring consistent quality and addressing sustainability concerns, which further influence the market landscape.
US Dairy By-Products Market Key Players and Competitive Insights:
The US Dairy By-Products Market presents a dynamic and evolving landscape characterized by increasing consumer demand for dairy-based ingredients and products. Key players in this market are continuously adapting to trends in health, sustainability, and innovative applications in the food and beverage sector. As the demand for natural and organic dairy ingredients surges, companies must leverage their strengths in production, distribution, and product innovation to remain competitive. The presence of a diverse range of players, from large multinational corporations to regional producers, contributes to an intense competitive environment, making it essential for businesses to understand their position relative to their peers while also identifying opportunities for differentiation within the market.
Saputo Inc. holds a prominent position in the US Dairy By-Products Market, showcasing significant strengths in its extensive product portfolio, unmatched distribution capabilities, and commitment to quality. With robust operational facilities across the United States, the company is well-equipped to meet the increasing demand for cheese, dairy blends, and other by-products derived from milk processing. Saputo Inc.'s strategic focus on innovation has enabled it to maintain a competitive edge, as it continually invests in research and development to create new, value-added products that cater to evolving consumer preferences. Their strong financial health and established relationships with retailers further bolster their presence in the dairy by-products sector, allowing them to capitalize on emerging market trends and consumer demand.Milk Specialties Global specializes in the production of high-quality dairy-based ingredients, such as whey protein concentrates and isolates, essential for various applications in the food, beverage, and nutritional industries within the US market.
The company has consolidated its presence through a series of strategic acquisitions, enhancing its capabilities and expanding its product offerings. Milk Specialties Global is recognized for its commitment to sustainability and innovation, positioning itself as a leader in delivering tailored solutions designed to meet the specific needs of its customers. By fostering strong partnerships with suppliers and customers, the company effectively navigates market challenges while maintaining a strong competitive presence. Their focus on high-quality manufacturing and dedication to customer service further solidify their standing in the US Dairy By-Products Market, empowering them to adapt swiftly to changes in demand and seize growth opportunities.
Key Companies in the US Dairy By-Products Market Include:
Milk Specialties Global
Crystal Farms
Agropur Cooperative
Nestle USA
Darigold
California Dairies
Sargento Foods
Dairy Farmers of America
Land O'Lakes
Lactalis Group
Pinnacle Foods
Schreiber Foods
Hilmar Cheese Company
US Dairy By-Products Market Industry Developments
Recent developments in the US Dairy By-Products Market have shown significant growth and shifts among key players. In March 2023, Saputo Inc. announced plans to enhance its production capabilities to meet rising consumer demand for cheese alternatives, reflecting a trend towards plant-based products. Additionally, Milk Specialties Global has expanded its portfolio with new whey protein products aimed at the sports nutrition segment, capitalizing on the growing health-conscious consumer base. In May 2023, Lactalis Group invested in new technology to streamline its cheese-making process, indicating a focus on innovation and efficiency.On the merger and acquisition front, Agropur Cooperative finalized its acquisition of a key dairy facility, aimed at strengthening its production capacity in the Midwest region, which was publicly confirmed in April 2023. Notably, California Dairies announced a joint venture with Sargento Foods to enhance the distribution of dairy by-products through innovative packaging solutions in June 2023. Overall, the US Dairy By-Products Market is experiencing a dynamic evolution, driven by consumer preferences for health and sustainability, as well as strategic corporate expansions, reflecting a robust market landscape.
US Dairy By-Products Market Segmentation Insights
Dairy By-Products Market Product Type Outlook
Whey Protein
Lactose
Casein
Butter Milk
Skimmed Milk Powder
Dairy By-Products Market Application Outlook
Food and Beverages
Animal Feed
Nutritional Supplements
Pharmaceuticals
Dairy By-Products Market Source Outlook
Cow Milk
Buffalo Milk
Goat Milk
Dairy By-Products Market Form Outlook
Liquid
Powder
Granules
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2018 | 6.0(USD Billion) |
| MARKET SIZE 2024 | 6.5(USD Billion) |
| MARKET SIZE 2035 | 9.1(USD Billion) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 3.106% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Billion |
| KEY COMPANIES PROFILED | Saputo Inc., Milk Specialties Global, Crystal Farms, Agropur Cooperative, Nestle USA, Darigold, California Dairies, Sargento Foods, Dairy Farmers of America, Land O'Lakes, Lactalis Group, Pinnacle Foods, Schreiber Foods, Hilmar Cheese Company |
| SEGMENTS COVERED | Product Type, Application, Source, Form |
| KEY MARKET OPPORTUNITIES | Sustainable packaging solutions, Nutraceuticals development potential, Protein-rich animal feed, Value-added dairy ingredient innovation, Waste-to-energy conversion technologies |
| KEY MARKET DYNAMICS | increasing health consciousness, sustainable sourcing trends, rising demand for plant-based alternatives, regulatory compliance and standards, technological advancements in processing |
| COUNTRIES COVERED | US |
Frequently Asked Questions (FAQ) :
The US Dairy By-Products Market is expected to be valued at 6.5 billion USD in 2024.
By 2035, the market is anticipated to reach a valuation of 9.1 billion USD.
The market is expected to grow at a CAGR of 3.106% during the forecast period of 2025 to 2035.
Major players in the market include Saputo Inc., Milk Specialties Global, Crystal Farms, and Nestle USA.
Whey Protein is valued at approximately 1.95 billion USD in the US Dairy By-Products Market for 2024.
The Lactose segment is projected to reach 1.58 billion USD by 2035.
The Casein segment is valued at around 1.05 billion USD in the year 2024.
Growth opportunities are driven by increasing health consciousness and demand for dairy-based nutritional supplements.
The anticipated market value for Skimmed Milk Powder is expected to be around 2.08 billion USD in 2035.
Challenges include fluctuating raw material prices and stringent regulatory standards affecting production.
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