The global protein ingredients market was valued at USD 65 billion in 2022 and is expected to reach USD 94.81 billion by 2028, growing at a CAGR of 6.49% during the forecast period. The market is ever-evolving, dynamic, and highly lucrative. It covers many protein-rich foods, including meat, fish, eggs, dairy, nuts, legumes, and grains, and offers ample health benefits. It grows with a growth in the global population and an increased demand for high-protein diets. The current market trends and drivers in the global protein ingredients market are largely attributed to the global demand for protein-rich foods, growing disposable incomes, and the advent of new product categories. In addition, increased awareness of the health benefits of high-protein diets is a major driver of this market. The global market has become increasingly crowded as the demand for protein-rich foods grows. There are several sources of animal-derived, plant-derived, and microbial proteins.
Consumers engaging in physical activity are the core audience for the protein ingredients market. Its mainstream development is led by consumers seeking convenient health improvement. Consumers look for a proactive rather than a reactive approach to stay fit and active. Increased consumer awareness and education make protein consumption popular among mainstream consumers.
MARKET TRENDS & DRIVERS
Demand for Plant-based Products in Sports Nutrition
Consumers globally adopt a healthy lifestyle, especially in developed countries. As a result, the consumer base for sports nutrition and supplements is expanding. Sports nutrition is one of the fastest-growing categories within consumer health. It is expected to grow during the forecast period, driven by expanding core users from bodybuilders and performance athletes to a broad basket of consumers focused on fitness and healthy lifestyles. One of the key trends in the sports nutrition and supplement market is the increased demand for plant-based products.
The demand for protein is rising globally, driven by increased population, health awareness, rising income, urbanization, and aging. However, some concerns reduced the demand for animal-based protein in developed countries. The concerns include the increased awareness of the impact of food production on the environment. Health concerns associated with the overconsumption of animal protein, mainly when linked with saturated fatty acids and overconsumption of processed meat, are also the reason for the reduced demand for animal-based proteins.
Large Health-conscious Population
The trend of health consciousness among people has been witnessed only among certain segments of society, and it is expected to increase significantly during the forecast period. The modern generation is more interested in pursuing a healthy lifestyle. Moreover, there is a gradual shift among consumers toward healthy eating habits.
Consumers increasingly adopt natural products that fulfill taste, flavor, and nutritional content demands. Plant-based alternatives are generally healthier than animal-based products, accelerating the protein ingredients market's growth. The health-conscious population demands more transparency from manufacturers. Millennials, one of the major consumers of healthy products, are also potential customers for protein products.
Fluctuations in Raw Material Prices
The rise and fall in the price of raw materials, such as soy, pea, almond, coconut, rice, and other ingredients required to produce plant-based protein supplements, directly impact the cost of production. Thus, changing the price of these raw materials is one of the most significant challenges to the protein ingredients market.
Increased casein prices put manufacturers of food and beverages under pressure. Manufacturers of RTD tea and coffee, non-dairy creamer, and cheese analogs compete to uphold margins and prevent passing on all the added costs to consumers with high dairy prices in APAC.
INSIGHTS BY SOURCE
The global protein ingredients market by source can be segmented as animal, plant, insect, and microbial. The animal source segment is expected to be the largest revenue segment. Animal-based food includes meat, dairy, eggs, aquaculture, and fisheries. Animal-based raw materials are primarily derived from dairy milk, which is very popular among consumers as it helps muscle build and quick recovery. Some animal products such as fish, eggs, dairy products including cheese, milk, whey, red meat, and poultry from sources such as chickens, turkeys, and quails are a complete source of protein. Certain animal protein sources contain high levels of heme iron and vitamin B12.
The animal-based protein ingredients market is experiencing an increase in demand led by several factors, including growing consumer preferences and the rising awareness of the nutritional benefits of animal-derived proteins. Moreover, the increasing popularity of fitness and sports nutrition supplements and advancements in food processing technologies led to the development of protein-rich products. Due to the continuous shift towards healthier dietary patterns and lifestyles, there is a growing demand for animal-based protein ingredients. Furthermore, the demand for plant-based meat is rising due to the increased consumer adoption of a flexitarian lifestyle, posing a challenge to the animal-based protein ingredients market. As more people opt for plant-based diets for environmental, health, or ethical reasons, there is a shift away from conventional animal-based protein sources.
INSIGHTS BY FORM
The dry-form segment is expected to be the largest revenue segment of the global protein ingredients market in 2022. Dry or powdered protein ingredients are sourced from plants, such as peas, soybeans, potatoes, rice, or hemp, and animals, such as eggs and milk (whey protein or casein). The dry protein powder ingredients include artificial flavoring, added sugars, vitamins, thickeners, and minerals. Protein powders are concentrated protein sources from plant or animal food such as eggs, dairy, peas, or rice. Protein isolates, protein concentrates, and protein hydrolysates are common forms of protein powder.
In recent years, the demand for dry or powdered protein ingredients has experienced a significant rise, led by the increasing popularity of health and fitness trends. Moreover, there is a growing demand for plant-based protein powders, led by the rising adoption of plant-derived alternatives among consumers following vegan, vegetarian, or flexitarian lifestyles. Also, these products provide various advantages, such as longer shelf life, ease of storage, and the ability to be easily incorporated into various food and beverage applications, including smoothies, shakes, and baked goods. At the same time, liquid-based protein ingredients are expected to grow at a higher CAGR due to various advantages such as convenience and portability, taste and texture, absorption rate, and innovation in product formats.
INSIGHTS BY APPLICATION
The food & beverages application segment is expected to be the largest revenue segment of the global protein ingredients market. The food & beverages segment includes meat and meat alternatives, dairy and dairy alternatives, bakery products, performance nutrition, convenience foods, and other foods. Brands are tasked with advancing using new, more innovative technologies to keep up with consumer demand due to the continuous rise in popularity of protein-enriched food and beverage products. The developed markets witness a protein fortification shift from niche areas, such as sports nutrition, into the mainstream. This transformation provides opportunities for the development of new products.
Functional foods include meal replacers, nutrition bars, and supplements, where protein content is the major requirement. This segment witnesses growth in several countries and regions. It is a swiftly growing segment in China, especially regarding nutritional beverages, sports drinks, and meal replacers. Several new applications, such as baked goods, water, and coffee, hold outstanding potential. Also, in the last few years, consumers have consumed more fortified food and beverages.
The global protein ingredients market is well-developed in North America and Europe. The increased economic development and consumer awareness contribute to the growth of the global market. Moreover, APAC, Latin America, and Middle East & Africa are potential markets that help manufacturers expand their product segments, increasing sales. The global protein ingredients market is set to continue evolving to meet the needs of an ever-growing and increasingly diverse population. The health-conscious population and increased technological developments drive the demand for protein products. Furthermore, protein sources can be easily digestible, providing greater strength and stamina for athletes and fitness enthusiasts. Such factors redefine the protein ingredients market and drive the demand for protein products.
The current market trends and drivers are primarily attributed to the rise in global demand for protein-rich foods, increased disposable incomes, and the advent of new product categories. In addition, increased awareness of the health benefits of high-protein diets has been a significant driver of this market. Other key drivers of the global protein ingredients market include environmental sustainability initiatives, including sustainable animal and aquaculture production, free-range eggs, organic products, and increased demand for convenience and organic products.
The global protein ingredients market is projected to grow rapidly in the coming years. An increase in consumer demand for high-quality, nutrient-dense foods drives this growth. The key global protein ingredients market players are ADM, Cargill, FrieslandCampina, International Flavors & Fragrances (IFF), and Fonterra Co-operative Group.
Competition in the global protein ingredients market is increasingly globalized as new players enter, mainly in emerging markets such as China, India, and Brazil. In addition, multinational companies seize the opportunity to gain a competitive edge by investing in new protein sources and in research and development (R&D) initiatives to create new and innovative products. As a result, the competition is global and highly structured, with a clear delineation between market leaders and up-and-coming rivals. The competition in the global protein ingredients market impacts the competitive dynamics, with large players investing heavily in R&D initiatives while small companies look to capitalize on new opportunities. Food manufacturers leverage various strategies to differentiate their protein products in the highly competitive global market. The main strategies include product innovation, brand differentiation, pricing, and distribution channels.
Recent Developments in the Protein Ingredients Market
- In 2022, International Flavors & Fragrances (IFF) launched its next-generation plant-based protein - SUPRO® TEX - to enhance growth in the meat alternative segment beyond ground meat burgers.
- In 2023, FrieslandCampina, a prominent player in the global proteins and prebiotics industry, announced its plan to increase its production of whey protein isolate and milk fat globule membrane (MFGM) twofold.
ABOUT THE REPORT
The global protein ingredients market is provided for the forecast years 2023 to 2028 and the base year 2022. The market is segmented by source, application, form, and geography. The report provides a holistic approach to the global protein ingredients market to enable customers to analyze the market thoroughly.