Global Anhydrous Milk Fat Market Size, Share, and Trends Analysis Report – Industry Overview and Forecast to 2032

Anhydrous Milk Fat Market Size

• The global anhydrous milk fat market was valued at USD 1.67 billion in 2024 and is expected to reach USD 2.57 billion by 2032
• During the forecast period of 2025 to 2032 the market is likely to grow at a CAGR of 5.5%, primarily driven by rising demand in the bakery, confectionery, and dairy processing sectors
• This growth is fueled by factors such as increasing consumption of high-quality dairy-based products, rising awareness of the functional benefits of AMF, and expanding usage in food service and industrial applications across emerging markets

Anhydrous Milk Fat Market Analysis

• Anhydrous milk fat (AMF) is a premium dairy ingredient widely used in applications such as bakery, confectionery, dairy processing, and foodservice due to its rich flavor, extended shelf life, and superior texture-enhancing properties. It contains more than 99.8% milk fat and is valued for its purity and versatility
• The demand for AMF is strongly influenced by the growing popularity of premium dairy-based products and increased consumption of butterfat-enriched foods across both developed and emerging markets. The global rise in bakery and dessert consumption, particularly in urban populations, significantly contributes to this upward trend
• Asia-Pacific is emerging as a high-growth region in the AMF market, driven by rising incomes, Westernization of diets, and increased demand for functional and value-added dairy products. Europe, meanwhile, remains a key exporter due to its established dairy processing infrastructure and regulatory standard 
• For instance, India’s growing bakery sector and China’s expanding demand for western-style desserts have led to increased imports of AMF for industrial food manufacturing. Additionally, countries like New Zealand and Ireland continue to dominate global production and export due to their strong dairy industries 
• Globally, AMF is considered a strategic dairy ingredient for manufacturers seeking longer shelf life, ease of transport, and improved consistency in large-scale food production—making it indispensable in both B2B and B2C segments

Report Scope and Anhydrous Milk Fat Market Segmentation

Anhydrous Milk Fat Market Trends

“Rising Demand for Clean-Label and Functional Dairy Ingredients”

• One of the key emerging trends in the global anhydrous milk fat market is the increasing consumer preference for clean-label and functional food products, which is significantly influencing demand for natural dairy ingredients like AMF
• AMF, being a pure dairy fat with no added preservatives or additives, aligns well with the clean-label movement. It is widely recognized for its natural origin, high-quality nutritional profile, and absence of artificial components—attributes highly valued by health-conscious consumers 
• For instance, food manufacturers in Europe and North America are reformulating products to replace synthetic fats and oils with natural alternatives like AMF to cater to growing clean-label demands. This trend is especially evident in premium bakery, confectionery, and ready-to-eat meal segments 
• In addition, AMF is being increasingly adopted in fortified and functional foods due to its high energy density, fat-soluble vitamin content (A, D, E, K), and its ability to enhance flavor and texture in processed foods
• This shift is not only promoting greater use of AMF in traditional sectors but also opening new opportunities in health and wellness food categories, positioning it as a multifunctional ingredient in the evolving global food landscape

Anhydrous Milk Fat Market Dynamics

Driver

“Growing Demand for High-Quality Dairy Ingredients in Processed Foods”

• The increasing demand for premium dairy-based ingredients in the food and beverage industry is significantly contributing to the growth of the anhydrous milk fat (AMF) market
• AMF is widely used in bakery, confectionery, dairy-based desserts, and convenience foods due to its rich flavor, long shelf life, and superior functional properties compared to regular butter or cream
• The growing preference for natural and clean-label ingredients among consumers is driving food manufacturers to adopt AMF, which is free from moisture and additives, making it suitable for high-quality food production
• As urbanization and changing dietary habits continue to shape consumer preferences, particularly in developing regions, the demand for processed and ready-to-eat foods that use AMF as a key ingredient continues to rise
• Additionally, the expansion of food service sectors like QSRs (quick-service restaurants) and bakery chains is further supporting the need for stable, high-performing fats like AMF for consistent texture, flavor, and shelf stability

For instance,

• In March 2023, a report published by the Food and Agriculture Organization (FAO) highlighted a steady rise in global butter and fat consumption, especially in Asia-Pacific countries, driven by increased disposable incomes and a shift toward Western-style diets
•   In July 2022, data from Dairy Australia showed that export volumes of AMF increased by over 10% compared to the previous year, reflecting growing international demand for this versatile dairy ingredient in processed food manufacturing 
• As a result of the growing need for high-quality, shelf-stable dairy ingredients in both domestic and global food sectors, the demand for anhydrous milk fat is expected to rise steadily, positioning it as a crucial component in the evolving processed food landscape

Opportunity

“Rising Demand for AMF in Infant Nutrition and Specialized Dairy Formulations”

• The increasing focus on infant nutrition and specialized dairy products presents a significant opportunity for the growth of the anhydrous milk fat (AMF) market
• AMF is a key ingredient in infant formula, offering high energy density and essential fat-soluble vitamins critical for early childhood development
• As parents and healthcare providers prioritize premium, high-quality ingredients in baby food products, manufacturers are incorporating AMF due to its digestibility, purity, and functional similarity to human milk fat
• AMF’s role in medical nutrition and elderly care products is growing, driven by a rising global aging population and increasing demand for easily absorbable, nutrient-rich dietary solutions

For instance,

• In August 2023, FrieslandCampina Ingredients launched a new range of nutritional lipid ingredients for early life nutrition, highlighting AMF as a key component to mimic the fat structure of human breast milk in infant formula, supporting cognitive and physical development
• In May 2023, Fonterra announced expanded production capabilities at its Edendale site in New Zealand to meet rising demand for AMF in infant formula and high-value nutrition segments, particularly across Asia-Pacific and the Middle East

• As consumer awareness grows regarding the nutritional benefits of dairy-derived fats, the use of AMF in infant and medical nutrition products is set to expand, creating a strong opportunity for manufacturers to capitalize on health-driven market segments

Restraint/Challenge

“Price Volatility and Supply Chain Dependency on Raw Milk”

• One of the key challenges facing the anhydrous milk fat (AMF) market is its strong dependency on raw milk supply, making it vulnerable to price volatility and supply chain disruptions
• The production of AMF is directly influenced by the availability and quality of raw milk, which is susceptible to fluctuations due to seasonal changes, feed costs, animal health issues, and climate-related events
• This substantial financial barrier can deter smaller clinics and hospitals with limited budgets from upgrading their equipment or investing in new technologies, leading to a reliance on outdated tools
• Moreover, international trade barriers, including tariffs and export restrictions on dairy products, can further constrain the global AMF supply chain, causing regional shortages and affecting market stability

For instance,

• In December 2023, according to a report by Global Dairy Trade (GDT), global dairy prices—including AMF—experienced a sharp rise of over 9%, attributed to lower milk output in major producing regions like the EU and New Zealand due to adverse weather and higher input costs.

• As a result, price instability and raw material dependency present a serious restraint for the AMF market, particularly for manufacturers operating in cost-sensitive regions or those reliant on consistent ingredient pricing for large-scale production

Anhydrous Milk Fat Market Scope

The market is segmented on the basis of nature, application, distribution product type, foam, and end user.

Anhydrous Milk Fat Market Regional Analysis

“North America is the Dominant Region in the Anhydrous Milk Fat Market”

• North America leads the global anhydrous milk fat market, supported by a robust dairy processing industry, strong demand for premium dairy products, and the presence of established food and beverage manufacturers
• The U.S. holds a dominant share due to its well-developed foodservice sector, high consumer preference for high-fat dairy items, and the widespread use of AMF in bakery, confectionery, and ready-to-eat products
• Growing awareness of clean-label and natural ingredients among North American consumers is encouraging food producers to adopt AMF as a high-quality, functional fat in product formulations
• In addition, the region benefits from advanced dairy farming practices, favorable trade agreements, and continued R&D investments by key dairy cooperatives and food companies to expand the use of AMF in innovative applications
• As a result, North America not only contributes significantly to global consumption but also drives innovations and exports in the anhydrous milk fat industry

“Asia-Pacific is Projected to Register the Highest Growth Rate”

• The Asia-Pacific region is expected to witness the fastest growth in the global anhydrous milk fat market, driven by rising disposable incomes, urbanization, and increasing demand for Western-style and premium dairy products
• Countries like China, India, and Southeast Asian nations are rapidly expanding their bakery, confectionery, and foodservice sectors, significantly boosting the consumption of high-quality dairy ingredients such as AMF
• India’s growing bakery industry and China’s increasing preference for butterfat-rich foods are fueling demand for AMF both from local production and through imports from major dairy exporters like New Zealand and the EU
• With a growing middle-class population seeking better-tasting, natural, and functional foods, the use of AMF in high-end food formulations is becoming more widespread across the region
• In addition, government initiatives to strengthen dairy infrastructure and foreign direct investments in the food processing sector are contributing to the rapid expansion of the AMF market in Asia-Pacific

Anhydrous Milk Fat Market Share

The market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to market.

The Major Market Leaders Operating in the Market Are:

• Agropur Cooperative (Canada)
• Arla Foods (Denmark)
• Aurivo Co-operative Society Ltd. (Ireland)
• DMK Deutsches Milchkontor GmbH (Germany)
• First Choice Ingredients (U.S.)
• Fonterra Co-operative Group (New Zealand)
• Glanbia plc (Ireland)
• Groupe Lactalis (France)
• Hochwald Foods GmbH (Germany)
• Ingredia SA (France)
• Meggle AG (Germany)
• Murray Goulburn Co-operative Co. Limited (Australia)
• Ornua Co-operative Limited (Ireland)
• Royal FrieslandCampina (Netherlands)
• Saputo Inc. (Canada)
• Synlait Milk Limited (New Zealand)
• Uelzena Group (Germany)
• Valio Ltd (Finland)
• Westland Milk Products (New Zealand)

Latest Developments in Global Anhydrous Milk Fat Market

• In December 2023, Fonterra announced the expansion of its anhydrous milk fat production capacity to accommodate the rising global demand for high-quality dairy fats. This strategic move aims to cater to increasing consumer demand for premium dairy ingredients, particularly in the food processing and confectionery sectors
• In November 2023, Glanbia Ingredients launched a new range of anhydrous milk fat products specifically designed for the bread and confectionery industries. The initiative focuses on enhancing the flavor, texture, and shelf life of baked goods and chocolate products
• In October 2023, Arla Foods introduced an organic version of anhydrous milk fat to address the rising demand for organic and clean-label dairy products. This launch aligns with consumer preferences for natural and sustainably sourced ingredients
• In September 2023, Lactalis Ingredients partnered with a leading confectionery manufacturer to supply anhydrous milk fat for premium chocolate products. The collaboration aims to enhance the mouthfeel and flavor profile of chocolates using high-quality dairy fat

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