Consumer, Diet Trends Propel Today's Dairy Foods Innovation
Published: Friday, May 30, 2025
Americans love dairy foods.
In 2023, Americans consumed on average 661 pounds of dairy products on a milk-equivalent, milkfat basis, up seven pounds from 2022.
Fluid milk's contribution to total dairy pounds consumed declined steadily for the past decade or more, but increases in demand for cheese, butter and yogurt more than offset the fewer glasses of milk being drunk in the United States.
But for the first time in many years, year over year fluid milk consumption finished higher in 2024 than it did in the previous year, according to Ann Marie Splitstone, Dairy Management Inc. a division of the Dairy Checkoff.
Health and flavor rise to the top of 2025 dairy product trends as dairy processors and manufacturers work
to tweak traditional dairy beverages and create a pipeline of new products to attract new customers and retain a faithful base. Customer preferences are changing, and it's not just taste buds that the dairy industry is seeking to please. According to Darin Copeland, public relations manager for Prairie Farms Inc., dairy consumers are focused on products that appeal to their health and wellness along with sustainability.
"Lactose-free and high protein/low sugar products are driving our gains in fluid milk consumption and that momentum is likely to continue," Splitstone said. Since 2015, DMI has been listening to consumers, watching dietary trends and encouraging innovation in dairy processing. "It has been a long time in coming, but a lot of things are converging right now."
Growing numbers of consumers want more out of a beverage than simple hydration. They want more health benefits but fewer unhealthy additions like sugar, coloring, additives and artificial ingredients. Functional dairy products are the dairy industry's response to an emerging demand in this area.
New technologies in food fortification allow manufacturers to add even more protein, vitamins, minerals and probiotics to an already nutrient-dense food, adding more value and function to food that is consumed. A complete protein with all nine essential amino acids, dairy foods are rich in calcium and phosphorous---a benefit for young and aging bones alike. But research is finding that lactoferrin, immuno-globulins and glycomacropeptides are important for immune functions and are showing up in products, including whey protein supplements, to promote gut and brain health.
Research and development have refined ultra-filtration and encapsulation technologies, leading to more products that are lactose free or contain more vitamins, probiotics or other benefits. These innovations are among the drivers for successful breakout products in the dairy beverage industry.
Fa!rlife is one example that showcases the possibilities for a dairy drink in a highly competitive beverage industry according to Scott Wallin, DMI's vice president for media and farmer communications.
"FaIrlife really took off in 2022 and became Coca Cola's fastest growing product in 2024. They are working toward a more complete beverage line and not strictly focused on soft drinks."
Silvia Robles, DMI's vice president for growth platforms and partnerships, said that Dairy Checkoff dollars have been working closely with Dairy Farmers of America to help launch their Milk 50 product. Two years in the making, Milk 50 was recently released into the West Coast and a few other select markets. Its appeal includes nine grams of protein, 75% less sugar and 50 calories per serving along with a cultured probiotic. It is a shelf standout due to its 48-ounce container, a size preferred in extensive pre-launch consumer research.
Nine additional new fluid dairy products are in the DFA pipeline, thanks to the research and development partnership with DMI. Roble said that at least two of them could be superstars.
"While I can't reveal proprietary information and name new products right now, at least one idea should be coming to market soon."
Market research firm Circana recently published that cultured dairy product sales reached $1.75 billion for the 52-week period ending Feb. 23, representing an 18% year-over-year increase in sales, according to Copeland.
"Cottage cheese is huge right now," Copeland said. A quick internet search for recipes using cottage cheese will yield concoctions for anything from smoothies, dips and even cottage cheese based flourless bread.
Prairie Farms responded to the cottage cheese trend with 4-ounce snack-sized containers that deliver 12 grams of protein in 100 calorie serving, packaged in a convenient, disposable container.
High protein dairy foods are popular with individuals using GLP-1 medications targeted for weight loss. Copeland said.
"The additional protein it provides helps preserve muscle mass while stabilizing blood sugar levels and promoting satiety," he said.
"Ultra-high temperature pasteurized milk is another high demand product which offers all of the benefits of traditional milk products with many flavor and fat content options, with the bonus of achieving a longer shelf life."
Consumers will never say goodbye to classic flavors like vanilla, chocolate, coffee or strawberry in milk, yogurt or ice cream. But curiosity is sparking experimentation with bold and decadent flavors and combinations. Spicy-sweet combinations, floral and botanical flavors along with fruit blends are tempting customers with more choices in the dairy aisle. Flavors like pistachio, matcha and lemon-blueberry are surging in popularity.
For the lactose sensitive, lactose free dairy products including milk, cottage cheese and sour cream are growing exponentially in market share annually.
Options are no longer limited to small or single serving sizes but are now available in more economical family sized packages.
Mozzarella may be America's favorite cheese, but Cheddar is a close second. While Mozzarella is preferred for the perfect pizza, the 2025 Wisconsin Cheese Report declares that consumers have a growing taste for international, artisanal and flavor fusions in cheese. Retail sales for Paneer, Burrata and Queso Quesadilla grew by 34%, 32.1% and 22.8%, respectively, last year.
Tradition and innovation are marrying as new aging techniques and flavor infusions are created in the cheese industry. For example, tradition shakes hands with modern innovation in Roelli's Red Rock, a Cheddar and Blue Cheese hybrid.
A growing number of choices in the dairy aisle prove that the dairy industry is delivering to the demands of a diverse and complex consumer. Price point matters, but consumers also want health benefits mixed with bold new flavors, and a connection to value with every bite, lick or gulp of dairy foods they consume.
Market innovation requires not only research and development, but it also requires infrastructure investment. Roble says those investments are beginning to happen in part because of solid data behind consumer demands and diet discoveries.
"We have a roadmap ahead of us to make big gains for dairy beverages in the total beverage industry," Roble said. "It is a wonderful time for dairy innovation."
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