Buttermilk Powder Market Size, Share & Industry Analysis, By Nature (Conventional and Organic), By Application (Beverages, Bakery & Confectionery, Dairy products, Processed foods, and Others), By Distribution Channel (B2B and B2C), and Regional Forecast, 2025-2032

The global buttermilk powder market size was valued at USD 1,822.72 million in 2024. The market is projected to grow from USD 1,891.80 million in 2025 to USD 2,580.27 million by 2032, exhibiting a CAGR of 4.53% during the forecast period. The North America dominated global market with a share of 34.75% in 2024.

Buttermilk powder is a dehydrated form of liquid buttermilk obtained after churning cream into butter and subsequently spray-drying it into powder. It is widely used as a functional dairy ingredient in bakery, confectionery, beverages, and savory applications owing to its emulsifying, foaming, and flavor-enhancing properties. The global market benefits significantly from the food products' extended shelf stability. It is rich in protein, calcium, phospholipids, and minerals, and offers a characteristic tangy flavor profile.

The market growth is primarily attributed to the increasing demand for shelf-stable, nutritious, and clean-label dairy ingredients, as well as the global expansion of the processed food industry. Additionally, Food manufacturers are increasingly incorporating the product into a variety of products, such as bakery items, confectionery, and ready-to-eat meals, driving steady global market growth due to its nutritional benefits and functional applications.

The industry is dominated by key players in the global market, including Fonterra Co-operative Group Limited, Arla Foods amba, Lactalis Ingredients, Dairy Farmers of America, Inc., Interfood AG, and others.

MARKET DYNAMICS

Market Drivers

Rising Consumption of Processed and Bakery Foods to Drive Market Growth

The increasing consumption of bakery, confectionery, and ready-to-eat products is indeed a key driver of the buttermilk powder market growth. This powder is valued for its creamy flavor, emulsification properties, and nutritional benefits, which enhance texture, flavor, and health appeal in these food categories. Its use is growing in bakery goods such as breads, cakes, pastries, and cookies, where it improves moisture retention and crumb structure. The rise in demand for convenient, shelf-stable, and health-oriented products, such as ready-to-eat meals, is further boosting buttermilk powder product consumption.

• According to the Agriculture and Agri-Food Canada organization, the retail sales of baked goods in the U.S. increased from USD 82,933.7 in 2022 to USD 86,641.3 in 2023.

Market Restraints

Rise in Plant-Based Dairy Alternatives to Impede Market Growth

There is a growing number of consumers adopting vegan, vegetarian, or flexitarian diets (reducing animal-derived foods), which naturally increases interest in plant-based dairy alternatives. Environmental, ethical, and health concerns are accelerating this shift. Moreover, plant-based dairy is often promoted as lactose-free, lower in saturated fat, and more environmentally sustainable than traditional dairy, which further hinders the growth of the traditional market.

• According to the National Institutes of Health, plant-based milks account for 15% of retail milk sales, and an estimated 40% of households purchased plant-based milks in 2020, and plant-based milk sales volume increased 20% with annual revenue growth twice the rate of dairy milk.

Market Opportunities

Growth in Functional and High-Protein Food Applications to Unlock New Growth Opportunities

The growing consumer preference for functional, protein-rich, and nutrient-dense foods presents a significant opportunity for the buttermilk powder industry. Buttermilk powder, being a natural source of bioavailable protein, calcium, and phospholipids, is increasingly being used in sports nutrition, meal replacements, and fortified bakery products. According to the 2024 Food and Agriculture Organization report, protein consumption per capita is projected to increase by 79.8g per day by 2033. The inclusion of high-protein dairy ingredients in snacks and beverages is expected to drive demand for these products. Furthermore, buttermilk’s emulsifying and stabilizing properties make it ideal for low-fat and high-protein food innovations.

Buttermilk Powder Market Trends

Expansion of Clean-Label and Organic Dairy Ingredient Segment to Shape Industry

The expansion of the clean-label products and organic dairy ingredient segment, including buttermilk powder, is a significant trend in the market. According to the Organic Trade Association, in 2024, U.S. sales of certified organic products grew by 5.2%, a rate more than double that of the overall marketplace, which grew at 2.5%. This acceleration brought the total sales of organic products to an estimated USD 71.6 billion in 2024. This trend directly supports the adoption of organic buttermilk powder, as consumers increasingly demand chemical-free, traceable, and minimally processed dairy products. Manufacturers are also responding by obtaining organic and non-GMO certifications, offering products made from grass-fed or hormone-free milk sources. Europe and North America lead this segment due to their robust regulatory frameworks, which favor formulations using natural ingredients.

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SEGMENTATION ANALYSIS

By Nature

Conventional Segment Led Market Due to Cost-Effectiveness and Strong Application Base

By nature, the global market is bifurcated into conventional and organic.

The conventional segment dominated the market in 2024 with a value of USD 1,573.00 million, and it is expected to grow from USD 1,628.76 million in 2025 to USD 2,184.53 million by 2032, registering a CAGR of 4.28% during the forecast period. The dominance of this segment is mainly attributed to its wide availability, cost-effectiveness, and strong application base across the bakery, confectionery, and dairy industries. The conventional segment offers ease of processing and is affordable for bulk commercial buyers, making it the preferred choice among food manufacturers and ingredient processors.

The organic segment is expected to grow significantly in the forecast period with a CAGR of 6.01% in 2025.

By Application

Bakery & Confectionery Segment Dominated Market Due to High Usage of Buttermilk Powder for Improved Texture and Increased Moisture

Based on application, the market is segmented into beverages, bakery & confectionery, dairy products, processed foods, and others.

The bakery & confectionery segment held the largest share in 2024, with a market size of USD 752.37 million. It is forecasted to grow from USD 782.76 million in 2025 to USD 1,085.38 million by 2032, expanding at a CAGR of 4.78%. The segment’s strong performance is attributed to the extensive use of the product in baked goods and desserts, which enhances texture, flavor, and shelf life. It acts as an emulsifier and flavoring agent, providing a creamy, tangy taste ideal for pancakes, biscuits, chocolates, and cookies.

The processed foods segment is expected to grow significantly at a CAGR of 5.46% during the forecast period.

By Distribution Channel

Bulk Procurement and Cost Efficiency Fuels B2B Segment Leadership

By distribution channel, the global market is segmented into B2B and B2C.

The B2B segment accounted for the majority of the global buttermilk powder market share in 2024, with a value of USD 1,447.46 million, and it is projected to expand from USD 1,499.59 million in 2025 to USD 2,019.26 million by 2032, recording a CAGR of 4.34%. The dominance of this segment stems from the strong supply relationships between ingredient manufacturers and industrial buyers in the bakery, dairy, and beverage sectors. B2B distribution networks benefit from large-scale procurement and stable contracts with food producers.

The B2C segment is anticipated to grow at a CAGR of 5.25% during the forecast period.

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Buttermilk Powder Market Regional Outlook

Regionally, the report covers the global market analysis across North America, Europe, Asia Pacific, South America, the Middle East & Africa.

North America

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North America holds a significant share in the global market, projected to grow from USD 655.40 million in 2025 to USD 874.46 million by 2032, at a CAGR of 4.21%. The U.S. dominates regional demand, driven by large-scale food manufacturing, an established dairy industry, and innovations in ready-to-use bakery and beverage mixes.

The increasing consumption of protein-fortified and low-fat dairy formulations also drives the usage of buttermilk powder across various categories.

Asia Pacific

Asia Pacific ranked second with a size of USD 553.17 million in 2025, and it is projected to reach USD 786.31 million by 2032, exhibiting the highest CAGR of 5.15%. The growth is driven by strong dairy production in India, New Zealand, and Australia, as well as rising demand for nutritious dairy-based powders in China, Japan, and Southeast Asia. Health-conscious consumers are driving significant growth in the market due to increasing awareness of its health benefits. These benefits include probiotics for gut health, high nutrient content such as calcium and protein, low fat, and its natural, clean-label qualities that appeal to consumers seeking additive-free, organic, and transparent ingredient products.

The increasing adoption of Western-style bakery and confectionery products, along with the expansion of the foodservice industry, further enhances market performance.

Europe

Europe reaches a valuation of USD 453.74 million in 2025 and USD 623.05 million by 2032, growing at a 4.63% CAGR. The region’s growth is supported by the presence of key dairy ingredient manufacturers in France, Germany, and the Netherlands, and consumer preference for high-protein and clean-label food ingredients. Rising awareness of sustainability in dairy processing also complements the market.

South America

South America is expected to rise from USD 148.26 million in 2025 to USD 193.73 million by 2032, growing at a 3.90% CAGR. The region’s growth is led by Brazil and Argentina, where dairy exports and domestic bakery industries are expanding. Government efforts to promote dairy product diversification also stimulate demand for these products.

Middle East & Africa

The Middle East & Africa region is expected to grow moderately from USD 79.09 million in 2025 to USD 102.72 million by 2032, registering a CAGR of 3.41%. Growth is primarily supported by the rising adoption of dairy-based nutritional foods in the UAE, South Africa, and Saudi Arabia. However, limited local dairy production and high import dependency constrain regional market expansion.

COMPETITIVE LANDSCAPE

Key Industry Players

Strong Focus on Innovation and Technological Advancements to Support Market Growth of Key Players

The global market is moderately consolidated, with a few multinational dairy ingredient manufacturers holding a significant share of the market. Leading players are focusing on expanding their production capacity, implementing technological advancements, and adopting sustainable dairy sourcing practices to strengthen their global presence. Innovation in functional dairy ingredients, spray-drying technologies, and clean-label formulations remains a central competitive strategy.

Companies such as Fonterra Co-operative Group Limited, Arla Foods amba, Lactalis Ingredients, Dairy Farmers of America, Inc., and Interfood AG dominate the global landscape through robust manufacturing capabilities, diversified product portfolios, and established export networks.

Market Ranking of Key Players in the Buttermilk Powder Market

 List of Key Buttermilk Powder Companies Profiled

• Fonterra Co-operative Group Limited (New Zealand)
• Arla Foods amba (Denmark)
• Lactalis Ingredients (Lactalis Group) (France)
• Interfood AG (Switzerland)
• All American Foods, Inc. (U.S.)
• Glanbia plc (Ireland)
• Bluegrass Ingredients (U.S.)
• Ingredia SA (Ingredia Group) (France)
• Tipperary Co‑Operative Creamery Ltd. (U.S.)
• Dairy Farmers of America, Inc. (DFA) (U.S.)

KEY INDUSTRY DEVELOPMENTS

• March 2025: King Arthur Baking Company launched the buttermilk biscuit flour blend to expand its flour line, aiming to make baking flaky, tender, restaurant-quality biscuits at home easier. The blend is made with real buttermilk powder, unbleached soft wheat flour, baking powder, and a touch of salt.
• October 2024: Epi Ingredients, a French dairy ingredient supplier, created an additive-free butter powder formulated from 100% natural milk fat. This butter powder provides a clean-label option for manufacturers, offering the authentic flavor and creamy texture of traditional butter without any additives.
• September 2024: Three East Coast dairy cooperatives, including Agri-Mark, Maryland & Virginia Milk Producers Cooperative Association, and Upstate Niagara Cooperative, jointly launched a new company called Integrated Dairy Ingredients (IDI). The product lineup initially features nonfat dry milk, skim milk powder, and buttermilk powder. All products are rbST-free, OU Kosher, and Halal certified to meet the diverse requirements of customers.
• July 2023: Darigold Inc., the Seattle-based farmer-owned dairy cooperative, joined the Global Dairy Trade (GDT) platform and completed its first product offering through GDT Events. In this debut, Darigold offered two skim milk powder products and one buttermilk powder product.

REPORT COVERAGE

The global buttermilk powder market industry report analyzes the market in depth and highlights crucial aspects such as global market trends, supply chain, secondary research market dynamics, prominent companies, investment in research and development, and end-use. Besides this, the report also provides insights into the global market analysis and highlights significant industry developments.

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Report Scope & Segmentation