The dairy blends market is projected to reach USD 3.56 Billion by 2022, at a CAGR of 8.1% from 2016. The market is driven by factors such as increase in demand for dairy blends in infant formula, high prices of traditional dairy products, and various health benefits associated with dairy blends. High growth potential in the emerging markets and untapped regions provides new growth opportunities for the market players.

Dairy/non-dairy ingredients form the primary type of dairy blends used across various industries. This type is used either for making the blends economical or for improving the functional properties of the final product. These types of dairy blends are used in applications such as bakery, ice cream, infant formulas, and confectioneries. This segment accounted for the largest share in 2015, owing to the technological development in the dairy industry, change in lifestyles, and high level of consumer awareness regarding the benefits of these ingredients.

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The use of dairy blends in infant formula gives flexibility with respect to the usage of dairy ingredients, increases protein, and reduces fat contents. The market is dominated by Europe, while North America and the Asia-Pacific show high-growth opportunities, owing to increase in demand for infant formula in the regions. Increasing women workforce reduced the time for cooking baby food, the growing trend in nutritional baby food providing different variants in the market have increased the demand for infant formula, which is directly affecting the demand for dairy blends.

The growing middle-class population in the region, with increase in disposable incomes, and the demand for non-conventional food that offers on-the-go consumption are propelling the growth of the dairy blends market. The per capita consumption of dairy blends in the Asia-Pacific region is driven by growing economies such as Australia & New Zealand, China, Japan, and South Korea. A large number of dairy companies have expanded their reach in these countries, which has also driven the market for dairy blends.

Key players are Fonterra Co-operative Group Ltd. (New Zealand), Doehler Group (Germany), Agropur ingredients (Canada), Royal FrieslandCampina N.V. (Netherlands), and Kerry Group (Ireland).