Protein Hydrolysates Market Size - By Source, Application, Production Method, End Use, Distribution Channel, Growth Forecast, 2025-2034

Protein Hydrolysates Market

The global protein hydrolysates market size was valued at USD 3.5 billion in 2024. The market is expected to grow from USD 3.7 billion in 2025 to USD 5.7 billion in 2034, at a CAGR of 4.9%.
 

• The global market for protein hydrolysates is expected to grow considerably due to the demand for functional and nutritional ingredients arising from a range of industries. Protein hydrolysates are created from dairy, plant, animal, and marine materials, and exhibit unique functional properties and improved digestibility and bioavailability.
   
• Dairy-based hydrolysates consist of 40.1% of market share because of their use in infant and clinical nutrition and have been approved for use in this area already. Plant-based protein hydrolysates are growing at a CAGR of 6.2% due to the increase in demand for allergen-free and vegan products; while animal and marine sources of protein hydrolysates are rarer and typically target niche applications.
   
• The sports nutrition application of protein hydrolysates is the most well-known because of the rapid absorption and muscle recovery benefits. The infant nutrition application is also growing and responding to hypoallergenic needs due to severe allergenic responses from infant milk proteins and other sources. Clinical or medical nutrition, animal feed and pet food, cosmetics or personal care, and pharmaceutical or nutraceutical categories are also important.
   
• Enzymatic hydrolysis continues to be the preferred method for producing protein hydrolysates because of the specificity of enzymatic processes and limited by-products produced during reactions. Chemical and microbial methods also produce protein hydrolysates with different properties or enhanced as per quality specifications for specific applications physical methods like heating are less popular but some newer technologies from microbiology and processing may add new types of protein hydrolysate to the marketplace.
   
• Hydrolysates are used primarily by B2B food and beverage manufacturers, who incorporate them into functional foods and beverages. Companies from the nutraceutical, supplement, and pharmaceutical industries use hydrolysates, as do feed manufacturers and pet food, cosmetics, and personal care producers. Direct-to-consumer brands and research organizations increase the landscape further.
   
• North America and Europe are the leading markets due to established food processing industries and health-conscious consumers. The Asia-pacific market is the fastest-growing with 7% CAGR, owing to rising disposable income and changes to prevailing diets.

Protein Hydrolysates Market Trends

• The market continues to experience a surge of new product launches of new protein hydrolysates from new sources, such as algae, insects, and pulses. The innovation is focused on having differentiated product portfolios for adventurous consumers and addressing sustainability, with companies promoting benefits of the unique nutritional profiles and functional benefits of the hydrolysates to differentiate themselves in competitive spaces.
   
• Protein hydrolysates are also seen use in ready-to-drink (RTD) beverages and functional beverages. Brands are designing clear, stable, and palatable products for athletes, busy professionals, and health-conscious consumers, in line with a larger continuing trend of convenience, with on-the-go nutrition solutions that deliver protein and offer additional health benefits within a single product.
   
• There is a significant increase in strategic partnerships, mergers, and acquisitions involving ingredient suppliers, food manufacturers and biotech companies. These partnerships are intended to expedite research and market expansion in order to take advantage of manufacturing capacities to meet and serve fast changing consumer taste and preferences and regulatory trends within the protein hydrolysates market.
   
• Manufacturers are increasingly adopting sustainability by upcycling raw materials, like by-products of dairy, fish, and plant processing for the production of protein hydrolysates.
   

Protein Hydrolysates Market Analysis

Based on source, the protein hydrolysates market is segmented into dairy, plant, animal, and marine. Dairy holds a significant share at a valuation of USD 1.4 billion in 2024.
 

• Dairy-based protein hydrolysates account for approximate 40% of revenue in 2024, based on their use in infant formulas, sports nutrition, and clinical nutrition applications. As dairy-based protein hydrolysates, whey and casein hydrolysates have excellent bioavailability and functional properties.
   
• Plant-based protein hydrolysates are the fastest-growing segment at a CAGR of 6.2% from 2024 to 2034 due continuous consumer demand for vegan, allergen-free, and sustainable protein sources. The plant segment is being led primarily by soy, pea and rice hydrolysates, which are being used more frequently in functional foods, beverages, and dietary supplements.
   
• Animal-based hydrolysates compose approximately 20.3% of the market and provide unique amino acid profiles in human and veterinary products used in clinical nutrition, pet food, and animal feed. The growth is stable, but moderated by allergenicity, and ethical concerns of animal-based products.
   

Based on applications, the protein hydrolysates market is segmented into food & beverages, sports, infants, clinical and medical, animal feed and pet food, cosmetics and personal care, pharmaceuticals and nutraceuticals.
 

• Food and Beverage is the largest application area with 29.7% of the protein hydrolysates market share in 2024.
   
• Sports Nutrition was the second largest application. This segment is fueled by the needs of athletes and fitness enthusiasts looking for faster muscle recovery, improved performance, and better protein absorption.
   
• Infant nutrition is approximately 19.9% of the market, with protein hydrolysates used extensively in hypo-allergenic infant formulations, specifically for infants allergic to cow’s milk protein or with a cow’s milk protein digestive sensitivities. Protein hydrolysates are used due to their digestibility as well as allergenicity. This segment is benefitting from stringent guidelines to keep infants safe and also parents’ awareness and concerns about infant health.
   
• Clinical and medical nutrition has a 8.9% of the protein hydrolysates market share, with protein hydrolysates present in medical foods, and enteral/enteral nutrition targeted for patients with digestive or absorption limitations. Protein hydrolysates are being used more in hospitals and elderly care settings to enhance recovery and support nutritional management for those who need it the most.
   
• Animal feed and pet food application is predicted to grow at CAGR 6.1%. The protein hydrolysates are valued for their digestibility and palatability quotient. They support growth and health for livestock, aquaculture and companion animals. The segment is an area of inflexion point as evidenced by steady growth in premium pet food formulations.
   
• Cosmetics & personal care is an emerging application area. Protein hydrolysates are utilized in skin care and hair care products mainly due to their moisturizing, anti-aging, and reparative properties. Marine and plant protein hydrolysates are gaining traction.
   

Based on production methods, the protein hydrolysates market is segmented into enzymatic, chemical, microbial, and others.
 

• Enzymatic hydrolysis is the dominant method to produce protein hydrolysates. The reason for this is that it is specific, has mild processing conditions, has the ability to provide high-quality protein hydrolysate products, and has few or no undesirable by-products. This method uses enzymes that have proteolytic activity to cleave proteins to peptides, and amino acids.
   
• Chemical hydrolysis involves cleaving protein bonds using either acid or alkali with typically lower-cost purified acids, or bases. Chemical hydrolysis is often a less controllable process with commonly negative results such as the formation of unwanted, and sometimes even toxic by-products, and the loss of some amino acids.
   
• Microbial hydrolysis is a hydrolysis that uses microorganisms or their enzymes to degrade proteins. This process seems to be gaining traction as it has been in operation for many years and there are eco-friendly benefits while also with the same advantages of producing bioactive or novel peptides. Microbial hydrolysis is still in its beginning stages, and the market share represents a small portion of the total hydrolysate market but will likely increase.
   

Based on end user, the protein hydrolysates market is segmented into B2B food and beverage manufacturers, nutraceutical and supplement companies, pharmaceutical companies, animal feed and pet food manufacturers, cosmetics and personal care companies, research and academic institutions, and direct-to-consumer brands. B2B food and beverage manufacturers estimated to grasp a value of USD 1.2 billion in 2025 and is expected to grow at an 3.9% of CAGR during the forecast period.
 

• B2B food and beverage manufacturers are the largest end-users of hydrolysate protein as functional ingredients that can add nutritional value, texture and hypoallergenic properties, within products such as sports drinks, infant formulas, dairy alternatives and protein bars. This segment is expected to grow due to increasing preferences for clean-label foods with a high-protein focus.
   
• The nutraceutical and supplement segment is a relatively significant market and is growing rapidly. Protein hydrolysates are ideal for dietary supplements, protein powders, and functional foods due to their high digestibility, rapid absorption, high bioactive peptides, etc.
   
• Pharmaceutical companies are looking at delivery systems using protein hydrolysates or considering their value as excipients; however, this segment is more niche to food and nutraceuticals. Animal feed and pet food manufacturers are incorporating protein hydrolysates into feed products for livestock, aquaculture, and companion animals to positively enhance the palatability, digestibility and nutritional composition.
   
• Cosmetics and personal care brands are using protein hydrolysates in many skin care and hair care products, due to their moisturizing, anti-aging, and repair activity. Due to these benefits and new ingredient innovations, protein hydrolysates are being used in increasing numbers of shampoos, conditioners, creams, and serums with accelerated premium and natural or clean product lines.
   

Based on distribution channels, the protein hydrolysates market is segmented into direct sales, distributors and wholesalers, online B2B platforms, and others. Distributors and wholesalers estimated to grasp a value of USD 1.6 billion in 2025 and is expected to grow at 3.8% of CAGR during the forecast period.
 

• Distributors and wholesalers are a key avenue to reach a far broader client base, especially small to medium-sized businesses and regional manufacturers.  Distributors facilitate market penetration and manage logistics, warehousing, and local distribution all while ensuring the protein hydrolysate is made available to many different industries.
   
• Direct sales are a sizable part of the protein hydrolysates market, particularly for high-volume buyers such as food and beverage manufacturers, nutraceutical firms, and pharmaceutical companies. Direct sales provide for a strong relationship with important customers, to potentially offering clients solutions specific to their needs, providing consistent quality and supply with your products. This would be an outlet for any buyers looking for larger orders or longer-term supply contracts.
   
• Online b2b platforms are rapidly growing, driven by the digital wave and the growing need for efficient procurement methods. These platforms help buyers compare items, gain access to technical information, and place orders all in just a few clicks away.
   
• The e-commerce model is growing in the b2b space which, combined with the growth of online platforms, increasingly broadens suppliers’ customer base of protein hydrolysate sales, especially to emerging markets and new market entrants.
   

U.S. dominated the protein hydrolysates market in North America with around 80.1% share and generated USD 1 billion in revenue in 2024.
 

• The U.S. market for protein hydrolysates is very mature, with growth driven by a combination of strong food science, highly regulated formulation standards, and responsible health-conscious consumers.
   
• The U.S. protein hydrolysate market is very innovative, and manufacturers are spending money to develop hydrolysates offering specific benefits related to sports recovery, gut health, and immune support. Additionally, the trend toward plant-based and clean-label is encouraging protein hydrolysate manufacturers to explore alternative proteins to dairy-based hydrolysate and other sustainable protein hydrolysates with some relevance to health benefits.
   
• Federally regulated for safety and quality by the FDA and USDA ensures that protein hydrolysates daily will be exempt from additional food risk on shelves with long market shelf lives. The presence of many leading players in protein hydrolysates and other domestic players helps foster some competition so consumer choice and continued product development and differentiation from all product players is genuine.
   
• Manufacturers often collaborate with industry and academic institutions to help discover new bioactive peptides or functional ingredients. There is also a trend towards rising lifestyle diseases, aging populations with more need for nutritional support, and increasingly accepting for personalized nutrition for as much as possible.
   

The protein hydrolysates market in India is projected to experience robust and sustained growth from 2025 to 2034.
 

• The market in India is vigorous active as consumers in India are looking for protein-rich food items and manufacturers have been responding by offering protein hydrolysates that are inexpensive and locally sourced from soy, casein, and plant protein.
   
• Consumption is expected to trend healthier as the growing middle class adopts healthier dietary habits, but the larger factor driving demand for functional foods and nutraceuticals is more choice on the supermarket shelf.
   
• While the protein hydrolysates market development is still behind that of Western countries, innovation is being welcomed in India with grants and government funding, and academic research on production processes (enzyme and microbial) urged on by many universities.
   
• Agencies like the Food Safety and Standards Authority of India (FSSAI),  committed to consumer safety and quality. These are working on regulatory standards to address the demand for safe products as consumer trust and acceptance is slowly growing, but health claims connected to protein hydrolysates and diet still lacks awareness. Addressing the limited education about the consumption of protein hydrolysates will also be critical to increasing consumption.
   
• However, the animal feed industry is also a big user of protein hydrolysates as they have been shown to improve efficiency of feed and animal health. With a food processing industry that has seen strong growth, investment in biotechnology, and growing support for graduates per year, India’s protein hydrolysates market still has good potential for growth, especially if consumer education and product availability improve.
   

The protein hydrolysates market in Germany is forecasted to optimistic growth between 2025 and 2034. Due to increased consumer awareness towards health and wellness, an increasing sports nutrition industry, and growth in the number of applications for infant formulas, the protein hydrolysates market is experiencing a considerable amount of innovative activity.
 

•  German manufacturers are focusing on clean-label, allergen-free and plant-based protein hydrolysates that target the vegan and vegetarian populations. The market is also benefiting from government support and regulations with respect to the development of functional foods.
   
• The presence of many major global food and beverage manufacturers also supports the development of protein hydrolysates markets. The emergence of personalized nutrition and sustainable sourcing is driving product development.
   

The protein hydrolysates market in Brazil is forecasted to undergo remarkable and steady growth from 2025 to 2034 due to increased health awareness, increased disposable income and growing sports nutrition industry.
 

• Brazilian consumers are increasingly adopting protein diets, and this presents opportunities for both animal source and plant source protein hydrolysates. The food and beverage industry are showing increasing adoption of protein hydrolysates into a wider population of functional foods, beverages and supplements.
   
•  Local manufacturers are investing in sophisticated processing technologies and producing from sustainable sources. There are numerous federal programs supporting nutrition and wellness initiatives and Brazil is developing an export market for protein hydrolysates, all placing Brazil in the position as an emerging dynamic player in the market.
   

Saudi Arabia’s protein hydrolysates market is set to experience dynamic and substantial expansion during the period from 2025 to 2034.
 

• The Saudi Arabian market size is expanding because of growing health awareness, government motivation in pursuing healthy lifestyles, and an increasing demand for sports and infant nutrition products.
   
• Saudi consumers are becoming more health-conscious and are seeking more functional and premium ingredients, which contribute to the growing acceptance of protein hydrolysates for use in foods, beverages, as well as dietary and sports nutrition intended for daily and one-time consumption.
   
• The market is also affected by a demographic shift in that the expensive expatriate population is growing, as are the percentage of overall populations consuming lean proteins as part of common Western diets. Local investment forms, and partnerships with international organizations are supporting growth in new and innovative protein hydrolysates in Saudi Arabia.
   

Protein Hydrolysates Market Share

• The top 5 companies in the protein hydrolysates industry are Archer Daniels Midland company, Arla foods ingredients, Cargill, incorporated, Davisco foods international, and Fonterra co-operative group limited contributing around 40% of the market in 2024.
   
• These companies have strong product portfolios, broad distribution capabilities, and large investments in research and development. Competition is also driven by ongoing innovation, as manufacturers identify new protein hydrolysate formulations including those that provide distinct health claims such as improved digestibility, allergen-free and higher nutritional content.
   
• Partnerships, mergers and acquisitions are commonplace for companies who want to expand their market presence and product lines. Some companies partner with food and beverage manufacturers so that the ingredient supplier can develop customized solutions directly with their end-user customer.
   
• The quality certifications, compliance with regulatory conditions, and sustainability goals are all more important as manufacturers find ways to differentiate their offerings. Manufacturers are also investing in technology to enhance the functional and sensory qualities of their protein hydrolysates as well as provide case studies and ensure clean-label claims.
   

Protein Hydrolysates Market Companies

Archer Daniels Midland (ADM): ADM manufactures plant and animal protein hydrolysates to many markets, including food and beverage and nutrition. The company has a competitive advantage relative to other companies in this space, because of its programs for product and process innovation, clean-label solutions, and commitment to sustainability.
 

Arla Foods Ingredients: Arla Foods Ingredients offers high-quality whey and milk protein hydrolysates which have many applications including infant formula and sports and medical nutrition. Arla Foods Ingredients is well known for its best-in-class dairy processing, functional ingredient solutions and emphasis on safety and quality, having customers in over 100 countries.
 

Cargill, Incorporated: Cargill produces both plant-based and animal-based protein hydrolysates. Customers are located in food, beverage, and pet food industries. Cargill's core focus is sustainable sourcing, innovation, and global supply chain capabilities. Cargill's protein hydrolysates are valued for their nutritional benefits, functional properties, and ability to meet the diverse needs of its customers.
 

Davisco Foods International: Davisco Foods International is a leading provider of dairy protein hydrolysates, especially whey protein hydrolysates, for use in sports nutrition, infant formula, and medical foods. Davisco is known for manufacturing high purity, advanced processing and manufacturing consistent quality for nutrition and food manufactures on a global scale.
 

Fonterra Co-operative Group: Fonterra is a key manufacturer of dairy-based protein hydrolysates to many markets with a significant investment in infant nutrition, medical nutrition, and sports nutrition. The company uses advanced dairy technologies, polysaccharides, protein, quality controls used to advance dairy technologies, and global distribution networks to deliver innovative, functional protein ingredient solutions to customers in over 140 countries.
 

Protein Hydrolysates Industry News

• In May 2023, ADM and Air Protein established a Strategic Development Agreement to jointly conduct research and development on innovative, land-independent proteins. The goal of this collaboration is to expand the production of affordable, air-derived protein ingredients suitable for meat alternatives. Plans include constructing the first large-scale Air Protein production facility globally.
   
• In December 2022, Kerry introduced KerryNutri Guide, an innovative instrument designed to analyze a wide variety of food and drink products based on different front-of-pack nutritional labeling schemes. The tool assists users in improving the nutritional profile of their products to achieve better labeling scores.
   

The protein hydrolysates market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Bn) and volume (Units) from 2021 to 2034, for the following segments:

Market, By Source

• Dairy
  • Whey 
  • Casein 
  • Milk 
• Plant
  • Soy 
  • Pea 
  • Rice 
  • Wheat 
  • Other plant sources
• Animal
  • Meat 
  • Collagen
  • Egg 
• Marine
  • Fish 
  • Seafood 
  • Marine

Market, By Application

• Food and beverages
  • Functional foods
  • Beverages
  • Bakery and confectionery
  • Dairy products and alternatives
  • Meat and meat alternatives
• Sports nutrition
  • Powders and supplements
  • Pre- and post-workout products
  • Recovery and endurance products
  • Weight management products
• Infant nutrition
• Clinical and medical nutrition
• Animal feed and pet food
• Cosmetics and personal care
• Pharmaceuticals and nutraceuticals

Market, By Production Method

• Enzymatic
• Chemical
• Microbial
• Novel and emerging methods

Market, By End Use

• B2B food and beverage manufacturers
• Nutraceutical and supplement companies
• Pharmaceutical companies
• Animal feed and pet food manufacturers
• Cosmetics and personal care companies
• Research and academic institutions
• Direct-to-consumer brands

Market, By Distribution Channel 

• Direct sales
• Distributors and wholesalers
• Online B2B platforms
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Indonesia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • South Africa
  • Saudi Arabia
  • UAE
  • Egypt