Market Outlook

Class II milk is defined as the milk that is used for manufacturing soft dairy products such as ice cream, sour cream, whipped cream, cheese dips, cream cheese and yogurt. Increasing consumption of yogurt and sour cream among consumers has fuelled the demand for class II milk over the past few years. The Federal Milk Marketing Orders (FMMO) has defined the various classes of milk to enhance the quality of milk in various end-use industries and to provide a standardised pricing for milk based on its end use.

Class II milk finds applications in various dairy processing as well as packaged food processing industries. Class II milk also plays a vital role in confectionaries as a key ingredient in producing milk-based chocolates and candies, which has escalated the demand for class II milk in the recent years. As the end products of class II milk are used in various food and beverage processing industries, class II milk is increasingly manufactured and traded by the leading producers of dairy products. Due to its increasing demand, there the overall supply chain of class II milk has increased significantly during the recent years, which is estimated to drive the global class II milk market in the near future.

Nourishing Class II Milk

The dairy products derived from class II milk, such as yogurt, cream cheese and sour cream, are often combined with staples for regular consumption, which is contributing to the growth of the global class II milk market. Increase in the number of food chains, such as packaged dairy products, dairy co-operatives, dairy formulators, confectionaries, quick service restaurants and others, are among the major factors driving the class II milk market. An increasing number of consumers are showing interest in dairy products, such as yogurt and sour cream, not only as a delicacy, but also for their health benefits. Processed class II milk serves as an excellent source of proteins, promotes essential probiotics and supplements calcium & potassium to improve the metabolism. Owing to all these factors, the global class II milk market is expected to witness value as well as volume growth during the forecast period.   

Global Class II Milk Market: Segmentation

On the basis of nature, the global class II milk market has been segmented as:

  • Conventional
  • Organic

On the basis of end use, the global class II milk market has been segmented as:

  • Yogurt
  • Ice Cream
  • Whipping Cream
  • Sour Cream
  • Cream Cheese
  • Cream Dips
  • Others

Class II Milk Market: Key Players

Some of the key players in the global class II milk market include Nestlé S.A, Fonterra Co-operative Group Limited, Lactalis S.A., Dairy Farmers of America, Inc., Danone SA, Saputo Inc., Meiji Co., Ltd., Arla Foods amba, Koninklijke FrieslandCampina N.V. and Inner Mongolia Yili Industrial Group Co., Ltd. An increasing number of food processing companies are showing keen interest in class II milk, due to which the demand for class II milk is increasing every year.

Opportunities for Market Participants

As a nutritive source for various processed foods, class II milk is expected to witness remunerative demand among consumers as well as food processing companies, which is estimated to generate stronger revenue for the players operating in the global class II milk market. In addition, class II milk is being used in dairy aerosols, which is expected to fuel its demand in the food servicing industries. Increase in the number of health-conscious consumers is estimated to accelerate the global demand for class II milk. Owing to these factors, industrialists and other participants in the class II milk market are estimated to witness high returns over the next few years.

Global Class II Milk Market: Regional Outlook

Class II milk is increasingly produced and consumed in North America due to the increasing consumption of yogurt, sour cream and whipped cream. In North America, class II milk is consumed along with the regular diet. In the Latin American region, class II milk is increasingly utilised in the confectionaries, however, the demand is growing gradually. Class II milk is commonly used in packed foods and food services in the Asia Pacific region due to the increasing consumption of processed dairy products. In Europe, growing consumer awareness about clean-label products is fuelling the growth of the class II milk market over the past few years. Owing to these factors, the class II milk market is expected to witness significant growth during the forecast period.

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