Dairy Culture Market - Forecast(2025 - 2031)

Dairy Culture Market Overview

Dairy Culture market size is forecast to reach US $2.9 billion by 2030, after growing at a CAGR of 5.7% during 2024-2023. The market for dairy culture is increasing rapidly, with the growth in demand for dairy products, an increased focus on health and wellness, and a growing consumer preference for functional foods. Other key growth contributors include technological advancements in culturing techniques, popularity of clean label and organic trends and the expansion of the global dairy industry. Increased convenience food consumption such as ready-to-eat yogurt and drinkable dairy products require high-quality dairy cultures which can improve the taste, texture and shelf stability.
A major trend in dairy culture is the demand for probiotics. Probiotic-rich dairy supports gut health and immune system. The N3 milk range, launched in China, by Nestle in November 2023, is high-protein and skimmed with full cream to boost balanced diets for any age group; some of them come with fortified vitamins, minerals and probiotics for healthy aging. Another trend in the market is the introduction of low fat and lactose free alternatives. Consumers are increasingly seeking nutritious options that address health concerns like obesity, cardiovascular diseases and lactose intolerance. Low-fat dairy products require specialized starter cultures to maintain flavor, texture, and fermentation efficiency despite the reduced fat content. Similarly, lactose-free alternatives leverage dairy cultures with enzymatic activity to break down lactose into digestible sugars, catering to lactose-intolerant individuals.

Market Snapshot:

Dairy Culture Market – Report Coverage:

The “Dairy Culture Market Report - Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the Dairy Culture Market.
 

COVID-19 / Ukraine Crisis - Impact Analysis:

COVID-19 seriously disrupted the market of dairy culture by stopping the supply chain, particularly delays in raw material and product distribution due to lockdowns and factory shutdowns. However, this high cost of production from the pandemic scenario helped change consumer behavior toward a healthier choice with an increased demand for probiotic-rich dairy products such as yogurt and kefir. Along with this, other problems that were present were labour shortages, lower consumer expenditure, and a shift towards ecommerce.

The protracted Ukraine-Russia conflict has increased the latest impacts, primarily through raw material shortages and high costs of energy, which makes diary production expensive. The imposition of trade sanctions also brought about modifications in access to markets within international supply chains within the diary sector, most particularly concerning Russia and its immediate geographic market. Premium product consumer spending is slowing even amid rising economic instability, but there are silver linings in emerging market opportunities in more stable regions of North America and Asia. Both crises have encouraged innovation in dairy culture products, especially within the rising demand for healthy-focused dairy products.

Key Takeaways:

Yogurt is the Largest Segment

Yogurt is gaining popularity with more health-conscious consumers looking for products with greater health benefits. Yogurt promotes healthy digestion, based on its live bacteria cultures. Yogurt production relies heavily on starter cultures like Lactobacillus bulgaricus and Streptococcus thermophilus for fermentation, ensuring the development of its distinctive flavor, texture and nutritional benefits. The increasing demand for functional foods that improve gut health and immunity has further propelled yogurt’s growth. As per Glanbia Nutritionals, immunity and gut health are the most important functions in a food or beverage for consumers globally with 34% responded stating that they purchased foods or beverages to boost immunity while 27% have chosen products to improve their gut health, as per survey results published in May 2023. Additionally, innovations like Greek yogurt, flavored yogurt and yogurt drinks expande its appeal across demographics. With growing awareness about digestive health and the rise in protein consumption, yogurt continues to dominate as a staple in daily diets

Thermophilic is the Largest Segment

Thermophilic cultures dominate the dairy cultures market due to their key role in producing fermented dairy products like yogurt, cheese and other cultured milk products. These cultures, which thrive at higher temperatures (40–45°C), are essential for fast and efficient fermentation processes. Key thermophilic strains such as Lactobacillus delbrueckii and Streptococcus thermophilus are widely used to enhance flavor, texture and shelf life while ensuring consistent product quality. The rising demand for yogurt and cheese, particularly Greek yogurt and hard cheeses accelerates the adoption of thermophilic cultures. Italian hard cheese specialist and sector giant DalterFood has revealed its biggest European export markets in its 2023 full year financial results, with sales up $13 million in two markets. The biggest importers of DalterFoods' Italian hard cheeses were France, Germany, UK and Spain. Moreover, the ability of thermophilic culture to produce probiotics aligns with growing consumer preferences for functional foods that offer health benefits like improved digestion and immunity.

Europe Leads Market

Europe accounts for the largest share of the dairy culture market solely because of its rich heritage in the consumptions of dairy products. France, Italy, UK and Scandinavia are some of the top dairy consumers. As per Euostat, about 70% of all whole milk available to dairies in the EU is used to make cheese and butter In 2023, 149.3 million tons of the whole milk available to the EU's dairy sector was processed. The growing health consciousness among the consumers particularly about probiotics and gut health benefits further fuel demands for cultured dairy products like yogurt and kefir. Additionally, the regulations in Europe contributes to the development and marketing of functional foods for which dairy products enriched with beneficial cultures are safe and of high quality. The region also leads in innovation by having companies concentrating on research and development to produce new culture types that augment flavor, texture and shelf life. European manufacturers are also getting increasingly sustainable, sourcing dairy cultures from regions that are locally and organically produced. These trends mirror the region's growing consumer demand for more environment-friendly products.

Growing Demand for Probiotic Rich Products Drives the Market

Consumers are increasingly aware of the health benefits associated with probiotics, which help maintain a balanced gut microbiome, supporting digestive health and immune function. Probiotic-rich dairy products like yogurt, kefir, and cultured milk are popular for these benefits. Probiotics are seen as functional ingredients that offer additional health benefits beyond basic nutrition. The functional food trend is expanding as consumers seek foods that contribute to overall well-being, driving demand for dairy cultures that provide health benefits. In July 2023, Danone has used its expertise in breastmilk research and breastfeeding to develop Almimama, a probiotic supplement that can help reduce the incidence of mastitis. Affecting approximately one in four mothers, according to the NIH, mastitis (inflammation in the breast) causes flu-like symptoms and breast pain, as well as skin rashes, fever and breast engorgement.

Growing Prevalence of Lactose Intolerance and Dairy Allergies Restrain the Market
A significant portion of the global population, particularly in Asia, Africa, and Latin America, has lactose intolerance, which limits their ability to consume traditional dairy products. This intolerance can deter consumers from purchasing dairy-based cultured products, even though some products (like yogurt) may be easier to digest due to the breakdown of lactose during fermentation. Dairy allergies also present a barrier, as they can lead to serious health reactions. To address this, manufacturers are increasingly investing in lactose-free dairy products and developing dairy-free cultured alternatives using plant-based sources like almonds, oats, and coconut. However, achieving the same texture, flavor, and nutritional profile with plant-based alternatives remains a technical challenge. This shift also requires significant investment in new production processes, equipment, and product formulation, which can strain resources and affect profit margins in the short term.
 

Key Market Players:

Global Dairy Culture top 10 companies include:
1.    Lactalis
2.    Amul
3.    Nestle
4.    Yili Group
5.    Danone
6.    Fonterra
7.    Arla Foods
8.    ADM
9.    Mengniu Dairy
10.    Saputo

Scope of the Report:
 

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