Northbrook, IL -- (SBWIRE) -- 01/04/2022 -- The global dairy processing equipment market size is estimated at USD 9.6 billion in 2021 and is projected to grow at a CAGR of 6.0% to reach USD 12.8 billion by 2026. The market has a promising growth potential due to several factors which includes the rising production and consumption of milk and other dairy products along with increased automation in dairy product manufacturing.

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Driver: Growing demand for dairy-based products

The dairy processing equipment market is witnessing growth due to the growing demand for dairy products because of the health and nutritional benefits they provide. Dairy processing companies are now targeting on low-fat, organic, and nutrient-fortified dairy products, which require highly advanced dairy processing machinery. According to the dairy index from Tetra Pak Global, consumption of products such as milk, cheese, and butter is expected to rise by 36% from 2014 to 2024, reaching in excess of 710.0 million tons of liquid milk equivalent by 2024. The rising demand for dairy products is majorly seen in emerging economies such as India, China, and South American countries. This demand is fueled by population growth, rapid urbanization, increased disposable income, and the emergence & modernization of cold chain facilities such as refrigerated transport & storage. In China, growth in dairy consumption is expected to remain strong. The International Farm Comparison Network (IFCN) projected that Chinese dairy demand would increase from 43 million tons of liquid milk in 2015 to 61 million tons by 2024—reporting a 42% increase. The growing demand for dairy products is thus driving the dairy processing equipment market.

The increasing demand for dairy products in the global market has resulted an increase in international trade of dairy products, thereby fueling the market for processing equipment. Due to the fact of rising health awareness among consumers about the benefits of dairy products, processed dairy products are gaining attention in international markets.

Restraint: Increasing energy cost

The continuous rising cost of power and energy required for the operation of processing equipment is a key restraint for the dairy processing equipment market. The dairy industry is growing at a considerable rate and has bright prospects. The dairy processing industry requires a large amount of energy for running the plants and also for refrigeration, lighting, and other mechanical processes. Thermal energy is required for processes such as pasteurization and evaporation in dairy processing. Pasteurization consumes a large amount of energy, in the form of electricity and other fuels, as compared to other processing equipment.

Dairy processing plants can become more energy-efficient by upgrading their older equipment and installing new technologies, and by changing management practices. An energy audit can be a valuable tool for a dairy processor who is trying to understand how energy is currently being used in farms and to identify cost-saving opportunities.

The high cost of running processing equipment and the scarcity of non-renewable energy sources are dissuading small dairy processors from installing these processing systems. Hence, this stands as a major restraint for the market growth of dairy processing equipment.

Opportunity: Dairy processors demand after-sales services to enhance operational efficiencies

Dairy processing equipment requires a high degree of maintenance and services, which may arise during installation and/or after sales. Dairy processing equipment manufacturers can extend their services beyond installation and provide after-sales services such as annual maintenance contracts.

After-sales services enhance the relationship of dairy equipment manufacturers with dairy processors through better services. The leading services that dairy processors need from dairy processing equipment manufacturers to contribute to their operational efficiencies include operator training, preventive maintenance by knowledgeable technicians, factory acceptance testing (FAT), and timely service

Dairy equipment manufacturers can take this as an opportunity to develop services such as scheduling preventive maintenance, notifying machine operators about when the maintenance will be performed, pinpoint a machine failure occurrence, and complete repairs faster for smoother operations. In the past, there have been food safety recalls in dairy processing factories, which have resulted in defamation of brands. The basics of good manufacturing practices, especially cleaning and sanitizing, and employee training guidance should be made available for dairy processors.

Challenge: High capital investment

Dairy processing equipment manufacturers require high capital investments to install various types of processing equipment. This installation incurs not only high costs but also requires timely maintenance, which acts as a cost addition that affects the operating margins of dairy processors.

In addition to this, membrane filtration, which is a widely used technology in dairy processing for the isolation of proteins and other ingredients from the milk, usually incurs a high setup cost. The setup cost for membrane filtration equipment is substantially high, which is expected to be a major obstacle for the market. In developing countries where membrane filtration technology does not have full penetration yet, the high cost of membrane filtration technology acts as a prominent obstacle for market growth.

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Many domestic and global players provide dairy processing equipment to improve animal health and performance. Major manufacturers have their presence in the European and Asian countries. The key companies in the dairy processing equipment market are GEA Group (Germany), SPX FLOW, Inc (US), Tetra Laval International S.A. (Switzerland), Alfa Laval Corporate AB (Sweden), John Bean Technologies Corporation (JBT) Corporation (US). Various strategies, such as expansions, mergers & acquisitions, and new product launches, were adopted by the key companies to remain competitive in the dairy processing equipment market.

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