Global Functional Milk Market - Outlook and Forecast 2023-2028

Market Overview

The global functional milk market had a value of USD 25.22 billion in 2022 and is projected to reach USD 36.63 billion by 2028. The market is expected to grow at a CAGR of 6.42% during the forecast period, driven by factors such as rising disposable income, improved living standards, and the inclusion of fortified food products in diets. Additionally, the market is influenced by the growing geriatric population, increased incidence of malnutrition among hospitalized patients, and the prevalence of communicable and non-communicable chronic diseases.

Milk is a widely consumed dairy product globally due to its high nutritional value. Functional milk plays a crucial role in addressing various deficiencies and related diseases such as osteoporosis, night blindness, exophthalmia, and anemia. It is fortified with added nutrients, with vitamin A and D-fortified milk being particularly popular in the U.S. The demand for clinical nutrition and health-consciousness, coupled with the rise in macro and micronutrient deficiencies and obesity, contribute to the growth of the functional milk market in the U.S.

Product Type

Market Report

No. of Pages


Release Date

March 2023

Base Year


Forecast Period


Market Size

USD 25.2 billion in 2021

Market Segments

Form, Age Group, Application, Distribution Channel, and Geography



No. of Companies Mentioned


Functional milk helps bridge nutrient gaps in the diet, alleviate nutrition deficiency diseases like night blindness, and support the maintenance of the nervous system in both children and adults. Milk fortification is a cost-effective preventive measure to address micronutrient inadequacies. Key developments in the global functional milk market include:

Health-conscious consumers view functional milk as a healthier alternative to regular milk due to its inclusion of vitamins A and D, calcium, protein, and other nutrients. Increased awareness of the benefits of functional milk drives sales growth globally. China and India have witnessed an upsurge in the consumption of functional milk, leading to market expansion. Other market segments are also expected to perform well and exhibit promising growth prospects. However, the shift in consumer preferences towards alternative functional milk products, trade barriers, and socio-economic challenges may impact market growth.

Milk powder, produced through the evaporation of milk, has an extended shelf life compared to liquid milk and does not require refrigeration due to its low moisture content. Functional milk powder or dried milk is fortified with vitamins and minerals that are not naturally present in significant amounts. The increasing consumer awareness of the health and nutritional benefits of functional milk powder presents lucrative opportunities for leading manufacturers in this segment. Fortified milk powder, containing additional macro and micronutrients, can help consumers prevent and combat various lifestyle disorders.

The global functional milk market also includes lactose-free milk products. Lactose intolerance is most prevalent in adults of East Asian heritage, affecting 70% to 100% of the population, according to the National Institutes of Health (NIH). The rising prevalence of lactose intolerance and the demand for low-added sugar or sugar-free products are expected to drive the sales of lactose-free milk worldwide.

Market Segmentation

The market is segmented based on various factors, including form, age group, application, distribution channel, and geography.

Segmentation by Form

Segmentation by Age Group
65 & Above

Segmentation by Application
Immunity & Disease Management
Weight Management
Clinical Nutrition

Segmentation by Distribution Channel
Convenience Stores
Grocery Stores
Specialty Stores
Institutional Sales

Segmentation by Geography
North America – US, Canada
Europe – Germany, France, UK, Italy, Spain, Russia
APAC – China, Japan, India, South Korea, Australia, Thailand, Indonesia, Philippines, Malaysia, Vietnam
Latin America – Brazil, Mexico, Argentina
Middle East & Africa – South Africa, Saudi Arabia, Turkey

In 2022, the powder form of milk dominated the global functional milk market, accounting for a 69.73% revenue share. This form is highly preferred due to its ease of consumption, long shelf life, superior stability during processing, and convenience in handling, transport, and storage. These factors play a crucial role in the supply chain and distribution, making the powder form popular in physical stores and e-commerce platforms, especially for children and older adults who may have difficulty swallowing.

Among different age groups, the 14-19 segment held the highest revenue share in 2022. Developed countries show a high demand for functional milk in this age group, while Low- and Middle-Income Countries (LMICs) face nutrient deficiency challenges without adequate health and nutrition programs. This creates significant growth opportunities, and the 14-19 age group is expected to experience a Compound Annual Growth Rate (CAGR) of close to 7% during the forecast period. Increased awareness of functional milk benefits and government initiatives in LMICs can further boost market growth.

The applications of functional milk are classified into immunity & disease management, weight management, clinical nutrition, and others. The immunity & disease management segment accounted for the highest revenue share (39.34%) in 2022. Vendors focus on developing functional milk products that aid in disease management, with low-cholesterol options being highly demanded for cardiovascular disease management. Additionally, functional milk promoting bone health for low bone mass and osteoporosis is also prevalent. The increase in lactose intolerance and immunodeficiency disorders contributes to the overall industry growth.

Online sales are predicted to grow rapidly compared to other distribution channels, with a CAGR of over 7% during the forecast period. Grocery and specialty stores worldwide are transitioning to e-commerce, bringing advantages for customers and producers. It reduces rental costs and dependency on intermediaries. However, online trading poses risks such as identity theft and vendor fraud.

The Asia-Pacific (APAC) region dominated the functional milk market, contributing 31% of the revenue in 2022. Factors driving this dominance include a large geriatric population, high prevalence of chronic diseases and metabolic disorders, and premature births. The region is also expected to experience the fastest growth during the forecast period. China, Japan, South Korea, Australia, and India are key players in the APAC functional milk industry.

In North America, the functional milk market reached a value of USD 7.03 billion in 2022. Steady growth is attributable to the increasing geriatric population and the rising prevalence of various diseases. Moreover, malnutrition among chronic disease patients and children is another significant driver. The United States leads the functional milk market in the region.

Europe accounted for 25% of the functional milk market revenue in 2022, with functional and fortified foods and beverages gaining popularity. Latin America and the Middle East & Africa have lower market penetration rates, providing significant growth opportunities for vendors due to high malnutrition rates. In 2019, the Turkish Clinical Enteral and Parental Nutrition Society (KEPAN) conducted an educational program involving 499 clinicians, highlighting the awareness of malnutrition and its potential for growth in the Middle East & Africa.

Competitive Landscape

The global functional milk market is characterized by a high level of fragmentation and intense competition, with prominent participation from both international and regional vendors. Nestle, Danone, Lactalis International, and Abbott are the top four dominant vendors in the functional milk market, holding substantial market shares. Additionally, other significant players include Dairy Farmers of America, Arla Foods amba, GCMMF, Glanbia, Ehrmann, and SADAFCO. These companies prioritize organic growth strategies by investing in research and development activities to introduce new and innovative products. An example of such innovation is Synlait’s announcement on April 28, 2021, regarding the launch of their skim milk powder called Made with Better Milk.

Key companies in the functional milk market are also focused on expanding their businesses. For instance, Crediton Dairy invested approximately USD 13.46 million in 2019 to enhance its flavored and functional milk processing facility in the United Kingdom. The industry has witnessed the introduction of various innovative products, including breakfast milk drinks and formulated milk powders for adults available in a variety of flavors. Lactose-free milk, milk fortified with vitamins A and D, and low-fat or fat-free milk are popular choices due to their applications in disease management and weight control. Furthermore, recent industry advancements include functional milk products targeting improved sleep, beauty, and skin health, as well as high-protein functional milk products for muscle building. Leading companies such as Lycotec and Parag Milk Foods offer functional milk for beauty and skin health, along with flavored milk options enriched with additional proteins to promote muscle mass. Many functional milk market vendors are operating in emerging countries like India and South Africa. As an example, Nestle launched its NESTLE EVERYDAY functional milk powder fortified with iron and vitamin C (120 G) in South Africa in May 2022.

Key companies profiled in this report include Nestlé, Danone, Lactalis International, Abbott, Aroma Milk Products, Arla Foods amba, Best Way Ingredients, Best Health Foods, Bright Life Care, CAPSA, Crediton Dairy, Dairy Farmers of America, Ehrmann, F&N Dairies, FrieslandCampina, Fonterra, Glanbia, GCMMF, Heritage Foods, INGREDIA, Land O’ Lakes, Lycotec, MEGMILK SNOW BRAND, Milligans Food Group, Mother Dairy Fruit & Vegetable, Parag Milk Foods, SADAFCO, SLEEPWELL, Stolle Milk Biologics, Synlait, Tirlán, Tesco, Vindija d.d., Valfoo, Vinamilk.

Key Questions Answered

What is the current size of the global functional milk market?

The global functional milk market is worth approximately USD 25.22 billion as of 2022 and is projected to reach USD 36.63 billion by 2028.

What is the expected growth rate of the global functional milk market?

The global functional milk market is anticipated to grow at a compound annual growth rate (CAGR) of 6.42% from 2022 to 2028.

Who are the major players in the global functional milk market?

The major players in the global functional milk market include Nestlé, Danone, Lactalis International, and Abbott.

What are some notable trends observed in the functional milk market?

Some notable trends in the functional milk market include the increasing demand for personalized nutrition, the availability of fortified milk powders for adults, and the introduction of fortified milk products targeting beauty and skin health.

Which region dominates the global functional milk market in terms of market share?

The Asia-Pacific (APAC) region holds the largest market share in the global functional milk market, accounting for approximately 31% of the market share in 2022.

Original price was: USD 4,200.Current price is: USD 2,520.

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Global Functional Milk Market - Outlook and Forecast 2023-2028

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Global Functional Milk Market - Outlook and Forecast 2023-2028

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