Dairy has long been prized for its ability to deliver both nutrition and indulgence, but even with its bonafides and status as a household staple, it faces increased competition as consumers explore new sources for protein, functional beverages and plant-based alternatives.
To maintain and gain shelf space, dairy brands must find new ways to translate their inherent strengths into products that meet changing expectations for taste, nutrition, convenience and value.
One way they do this is by leaning into protein claims. According to Circana retail data dairy products that carry protein claims represented a $10.4 billion segment within the $104 billion US dairy market as of July. A closer look reveals that dairy products with protein call-outs grew $13.7% in value and 7.5% in volume, compared with just 2% and 0.3%, respectively, in the broader dairy segment in the past year.
At the same time, dairy is becoming a victim of its own success with supply of some key ingredients, including whey, struggling to keep up with demand – leading to rising costs and shortages that are prompting manufacturers to explore alternative solutions, including plant-based options.
To that end, plant-based innovation and improvement is creeping on dairy’s traditional territory and stealing market share. For example, plant-based cream and creamers are giving dairy products a run for their money. According to Circana, plant-based cream and creamers both grew 4.8% in dollar and 6.4% in units from mid-2024 to mid-2025. This was driven in part by innovation focused on simple ingredients, organic options and consumers seeking less processed alternatives.
The dairy industry is hitting back, as reported by Deputy Editor Deniz Ataman, who explores how dairy creamers are winning consumers with new flavors, functions and formats.
Fluid dairy milk is also gaining ground after years of decline, thanks in part to innovative packaging and varieties, including ultra-processed and lactose free. To help processors and retailers build on this momentum, Senior Editor Elizabeth Crawford explores how the category’s Checkoff, MilkPEP, recently debuted a new data analytics platform dubbed Milkscape that it says can help drive product development, placement and marketing.
A shift in how consumers, nutritionists and policymakers think about the health impact of dairy fat also is helping to boost whole milk sales as well as full fat dairy products more generally.
Other players in the dairy segment, including Danone, are turning to AI to help meet their commerce goals by improving internal alignment, digital consistency and consumer trends, as Correspondent Tim Inklebarger explains.
In this month’s special edition – Dairy innovation: Meeting consumer demand for taste, nutrition and convenience – the FoodNavigator-USA team explores how these issues and more are reshaping the next generation of dairy innovation and marketing. Learn more by clicking on the headlines below, or if you are a FoodNavigator subscriber, by checking your inbox for the special edition on Dairy Innovation.
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Dairy innovation: Meeting consumer demand for taste, nutrition and convenience
New data platform reveals growth opportunities for dairy milk to win back shelf space – MilkPEP’s free, AI-powered market intelligence platform Milkscape gives milk processors and retailers access to consumer trends, sales data and insights to identify growth opportunities, drive innovation and boost milk sales
Can plant proteins help ease the whey squeeze? – Surging protein demand and tight whey supplies are driving interest in hybrid formulations, with ADM and other suppliers developing plant-based ingredients to help manufacturers balance nutrition, functionality and texture
Better Dairy self-affirms GRAS status for lactopontin - The precision fermentation company is targeting US nutrition and supplement launches while pursuing a separate regulatory pathway for infant formula
Creamers move beyond coffee with flavors, cold foams and café-inspired experiences – The rise of coffeehouse culture, viral beverage trend and cold coffee is fueling demand for creamers that offer more than just a splash of dairy
Danone’s AI commerce goal: ‘Trusted by machines and desired by humans’ – At Groceryshop, Arthur Sylvestre outlined why internal alignment, digital consistency and consumer needs – not the latest technology – are guiding Danone’s strategy
As consumers rethink fat, whole milk gets a second look – A growing focus on protein, satiety and whole-food nutrition is fueling renewed consumer interest in full-fat dairy, particularly whole milk.
