Dairy Derived Flavors Market

Dairy-derived Flavors Market: About the Report

The global dairy-derived flavors market is benefitting from increasing demand for premium flavors beyond conventional chocolate and vanilla flavors. Increasing consumer preference for better taste and nutrition is another contributing factor for rising demand. Consumers are adopting a flexitarian lifestyle and consuming both, animal- and plant-based dairy products. PMR’s report details such factors and others that will be responsible for the global dairy-derived flavors market experiencing a decent 1.5X volume growth over the forecast period of 2020 to 2030. There are also details included as to why the regions of East Asia and South Asia hold more than 40% of the global market share. PMR also dives deep into the impact that the ongoing COVID-19 pandemic will have on the dairy-derived flavors market across the world.

Dairy-derived Flavors Market Trends

Consumer Preference for Natural Ingredients Setting New Standards for Flavors Derived from Dairy: Consumers are demanding more products made using only natural ingredients, attributed to rise in health consciousness. The market for natural dairy-derived flavors is propelled by consumers' changed buying behavior, which has pushed manufacturers to use more natural ingredients in their products.

• Consumers still prioritize taste over nutrition, and lean toward creamy textures, although their primary concern is a healthy diet. This pattern is identified by producers of functional milk products, and the popularity of dairy-derived flavors continues to increase. This rising popularity of natural ingredients is expected to drive the expansion of the global dairy-derived flavors market size over the coming years.
• Distrust, discomfort, and uncertainty have increased concerns over foods that are genetically modified, and those that have added preservatives & sweeteners, which is increasing demand for natural ingredient-based products. Consumers have started to perceive such products as potentially harmful and unhealthy.
• Increasing consumer awareness regarding the ill-effects of consuming products with added synthetic colors, flavors, and chemicals are forcing manufacturers to provide products that are free-from GMO, gluten, chemicals, and different allergen products.
  • Manufacturers in the dairy-derived flavors market, such International Flavors & Fragrances Inc, Givaudan SA, FONA International Inc., Jeneil Biotech Inc. Dairy Chem Inc., Gamay Food Ingredients, Advanced Biotech. Inc., and Blends Limited are focusing on manufacturing cost-effective natural dairy flavors, which is likely to help customers in reducing the cost of their products without compromising on quality.

Rising Demand for Butter & Cheese Flavors in Bakery Products: Dairy-derived flavors are gaining traction, owing to increased use in bakery goods such as cookies and cakes. Consumers’ purchasing patterns are continuously evolving over time; nowadays, more consumers demand organic and natural food products. The positive impact of natural ingredients on consumers’ well-being is a major factor contributing to rising demand for natural clean label ingredients, which, in turn, boosts the dairy-derived flavors market.

• Demand for specialty dairy products such as feta cheese has increased the need for dairy-derived flavors, as they can reduce the manufacturing costs of dairy products.

As such, the global natural dairy-derived flavors market is expected to experience a healthy value CAGR of 7% during the forecast period.

Regional Outlook of Global Dairy-derived Flavors Market

North America holds the largest dairy-derived flavors market share, and is expected to progress at a decent growth rate of more than 4%. Europe and North America together account for more than 50% of the market share. Rising awareness regarding the use of health-beneficial ingredients by food & beverage manufacturers in these regions contributes toward their high market share in the global dairy-derived flavors market. 

Major players operating in the business of dairy-derived flavors manufacturing are focusing on increasing production capacity to expand their reach in North American and European countries. These players are also targeting the advanced food & beverage industry and sports nutrition industry in these regions for increased revenue.

COVID-19 Impact on Dairy-derived Flavors Market

The world is facing the aftermath of the outbreak of coronavirus. Damage has been inflicted on the world economy, which has also had a significant impact on the food & beverage market.

North America, being a major market for dairy-derived flavors, has faced a severe impact of the pandemic, which has affected the overall market. Lockdowns across different countries have aggravated the poor performance of imports and exports. Restricted trade flows have hampered the supply of dairy-derived flavors in North America and Europe. Overall, the global dairy-derived flavors market is expected to witness a moderate to high impact of loss due to the spread of COVID-19 in the near future.

Analysts’ Viewpoint

The global dairy-derived flavors market is expected to witness substantial value growth over the coming years, attributed to increased application in the bakery industry. Efforts by manufacturers to include high-quality dairy flavors with improved health benefits are expected to lead to significant market growth. With ongoing and pipeline research & development in end-use segments, the dairy-derived flavors market is expected to reach a total volume of 240,526 tons by the end of 2030.