Buttermilk Powder Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Buttermilk Powder Market is projected to expand from USD 3.53 Billion in 2025 to USD 4.77 Billion by 2031, reflecting a CAGR of 5.15%. Buttermilk powder, a dehydrated dairy ingredient obtained from the liquid byproduct of butter production, is fundamentally sustained by its functional capacity to enhance texture and emulsification in confectionery and bakery products while providing a much longer shelf life than liquid buttermilk. These characteristics allow industrial food manufacturers to leverage the ingredient for more cost-efficient formulations and simplified logistics compared to fresh dairy options.

A major obstacle restricting market growth is the intrinsic volatility of supply, as production volumes are directly tied to butter manufacturing schedules rather than immediate demand for the powder. This dependency frequently results in inconsistent availability and unstable pricing for large-scale purchasers. As reported by the United States Department of Agriculture, total production of dry buttermilk in the United States reached roughly 152 million pounds in 2024. Such fluctuations in output highlight the procurement challenges that can impede steady development within the global sector.

Market Drivers

The growing application of buttermilk powder in bakery and confectionery sectors acts as a primary catalyst for market expansion, utilizing the ingredient's natural phospholipid content to improve emulsification and texture in high-quality baked goods. Industrial manufacturers are actively integrating this dairy solid into recipes for cakes, biscuits, and pastries to optimize crumb structure while managing formulation costs. This sustained industrial demand is evident in recent trade valuations; according to The Bullvine's January 2025 article 'Global Dairy Trade Auction Kicks Off 2025,' buttermilk powder prices rose by 0.9%, specifically driven by strengthened demand from the baking and processed food industries, highlighting the ingredient's shift from a byproduct to a strategic functional component.

Concurrently, the increasing adoption of buttermilk powder as a cost-effective alternative to skim milk powder is altering procurement strategies throughout the food processing industry. Amid volatile commodity costs, the functional similarity of buttermilk powder allows for seamless integration into dairy blends and prepared mixes, offering a reliable option when traditional milk powder supplies are tight. This substitution trend is reinforced by production deficits in key regions; the United States Department of Agriculture's 'Dairy Products 2024 Summary' from April 2025 noted a 13.3% decline in domestic skim milk powder production to 599 million pounds in 2024, creating a gap that incentivizes the use of buttermilk derivatives. Broader supply chains remain robust to support this shift, with Dairy Australia reporting a 3% increase in national milk production to 8.37 billion litres during the 2023/24 season.

Market Challenges

The central impediment facing the Global Buttermilk Powder Market is the inelasticity of supply resulting from its status as a secondary by-product of butter production. Because output volumes are dictated by butter manufacturing schedules rather than direct market demand for the powder itself, buyers encounter significant availability risks. This disconnect generates a volatile procurement environment where industrial users, such as bakeries and confectionery manufacturers, cannot count on consistent supply levels for large-scale product rollouts, thereby deterring long-term formulation commitments and hindering overall market expansion.

This volatility is clearly demonstrated by inventory fluctuations that disrupt market stability. According to the United States Department of Agriculture, manufacturers' ending stocks of dry buttermilk in 2024 fell sharply from a peak of 35.6 million pounds in March to approximately 22.1 million pounds by October. Such a rapid contraction in available inventory within a single year forces buyers to contend with erratic pricing and supply shortages, directly limiting the sector's ability to maintain steady growth.

Market Trends

The rising incorporation of buttermilk powder into functional foods and nutraceuticals is redefining the ingredient’s market value beyond traditional culinary uses. Manufacturers are aggressively leveraging the high concentration of milk fat globule membrane (MFGM) found in buttermilk to create premium formulations aimed at adult cognitive development and gut health. This transition enables producers to market buttermilk derivatives as high-value bioactive components rather than simple commodities. As noted in the April 2025 article 'Arla Foods Ingredients expands MFGM applications beyond infant nutrition' by Arla Foods Ingredients, 53% of adults globally have expressed interest in functional foods, prompting dairy processors to direct buttermilk supplies toward specialized MFGM-enriched ingredients for the wellness sector.

Simultaneously, innovation in fortified and high-protein product formulations is stimulating new demand for buttermilk powder within the active nutrition market. As consumers prioritize physical performance, buttermilk is being utilized in protein blends and recovery beverages to improve solubility and provide a creamy flavor profile often lacking in pure whey or casein products. This trend is fueled by the evolving needs of health-conscious demographics seeking functional benefits alongside palatability; according to Glanbia Nutritionals' '2025 Nutrition Trends for Active Adults' report from October 2025, 30% of consumers cited energy and stamina as their top motivation for increased protein intake, incentivizing brands to develop buttermilk-enhanced products that deliver both nutritional efficacy and superior taste.

Key Players Profiled in the Buttermilk Powder Market

• Agropur Cooperative
• Fonterra Co-operative Group Limited
• Dairy Farmers of America, Inc.
• Arla Foods amba
• North Cork Creameries Ltd.
• NOW Health Group, Inc.
• Numidia BV
• Lactalis Group
• Valio Ltd.
• UELZENA eG

Report Scope

In this report, the Global Buttermilk Powder Market has been segmented into the following categories:

Buttermilk Powder Market, by Product Type:

• Organic
• Conventional

Buttermilk Powder Market, by Application:

• Foodservice
• Household
• Dairy Products
• Bakery & Confectionery
• Food & Beverages
• Others

Buttermilk Powder Market, by Distribution Channel:

• B2B
• B2C

Buttermilk Powder Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Buttermilk Powder Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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