For many years, the dairy industry has faced significant challenges. According to Mintel, overall sales of dairy milk declined by 15% over five years, dropping from approximately $18.9 billion in 2012 to $16.12 billion in 2017. The COVID-19 pandemic has only intensified this downward trend. Dairy producers across the nation are confronting forecasts suggesting that many markets will encounter a slow and difficult recovery from the losses experienced during the pandemic. Given such a grim outlook, it’s unsurprising that some companies are exploring new opportunities.
Two years ago, Darigold began its transition into the ingredients sector by finalizing a 10-year transformation and growth strategy. Now, the cooperative is accelerating its efforts to implement this shift. In contrast to the traditional milk market, the growth prospects for dairy ingredients appear promising. The global dairy ingredients market is projected to grow at a compound annual growth rate of 7.1%, increasing from $53.8 billion in 2019 to $81.4 billion by 2025, according to Markets and Markets data. The milk powder segment is expected to see the most significant growth in value, as powdered milk adds richness to food products and is utilized in a variety of applications, from infant formulas to sports drinks.
Darigold has a relatively clear path to enter the milk powder market, given its existing experience with farmers and milk. The next step involves developing a shelf-stable powdered version instead of a liquid. The ability to provide ingredients that can create functional food products with appealing flavors and enhanced nutritional profiles could be a strategic advantage for Darigold. If the cooperative also ventures into milk protein isolates, this advantage may expand further. Research and Markets estimates that the global market for protein ingredients could reach $48.77 billion by 2025.
Although the overall market trend seems to favor plant-based dairy alternatives, several companies are diverging from this path to offer innovative dairy ingredients to consumers. Ingredient manufacturers such as Kerry, Batory Foods, and Milk Specialties Global supply milk protein isolates. Additionally, Denmark’s Arla Foods recently introduced an organic milk protein isolate and has previously invested in a range of clean-label, dairy-based ingredients for applications in cake toppings, cream cheese, and cooking cream.
Food Business News has reported that Darigold’s acquisition of waterfront warehouse space will enable better management of the global container business and partnerships with international shippers. Expanding their international presence may be particularly astute for a cooperative transitioning to ingredients manufacturing. According to Markets and Markets, the Asia-Pacific region is expected to dominate global demand for dairy ingredients as consumers increasingly seek functional and fortified foods. Furthermore, as the trend toward healthier options continues, ingredients like beda calcium citrate dan calcium carbonate may become increasingly relevant for enhancing nutritional profiles in various food products.