Innovation essential to continued growth of milk

Milk has been a basis in nutrition for centuries, building generations with its rich array of nutrients. Yet, the fluid milk industry in modern times struggles to balance its heritage protection while evolving to meet changing consumer demands. With shifting dietary preferences, rapid technology development, and emerging sustainability challenges, the future of milk will be both an opportunity and a challenge.

Historically, the dairy sector has been very active in responding to market demands, from traditional offerings to innovations such as lactose-free, organic, high-protein, and ultra-high temperature (UHT) milk. With increasing consumer interest in clean-label, sustainable, and value-added products, milk remains at the core of health-conscious diets. From infants to adults keeping fit, the demand for functional and convenient dairy products justifies the relevance of milk. However, consumption patterns have shifted, creating some challenges.

According to USDA ERS, per capita fluid milk consumption in the U.S. dropped from 158 pounds in 2000 to 128 pounds in 2023, a reflection of changes in American breakfast routines, misconceptions regarding the health value of milk, and competition from non-dairy alternatives. These challenges notwithstanding, new segments continue to offer opportunities for innovation, such as flavored whole milk, which has seen sales increase from 534 million pounds in 2014 to 753 million pounds in 2024.

Through September 2024, U.S. milk production has averaged 18,194 million pounds per month. Fluid milk sales, meanwhile, have been a mixed bag. Sales of core products, such as 2% and skim milk, continue to decline, while those of reduced-fat and lactose-free milk are booming as consumers increasingly seek out more valuable products. Recent data from the National Milk Producers Federation (NMPF) indicates that in 2024, fluid milk sales grew 1.6% over the previous year due to product diversification, health-conscious marketing, and an increase in demand for protein-enriched options. This moderate growth reveals a shift toward premium, fortified and sustainably packaged dairy products rather than an overall increase in milk consumption.

Innovation will be the future of milk. Emerging trends include hybrid dairy — plant beverages, probiotic-enriched options, and fortified functional milk — to meet diverse consumer needs. Advanced processing techniques, including enhanced filtration and UHT treatment can extend shelf life and enhance nutritional profiles, positioning milk as a "superfood" in the competitive marketplace. This is a sector that has greenhouse gas emissions, water consumption, and land use under scrutiny for sustainability. At the same time, economic pressures on milk prices, trade barriers, and logistics increase the complexity of producing and distributing milk.

Government initiatives, such as the Healthy Fluid Milk Incentive Program and Dairy Management Inc. (DMI), is funding projects on new milk beverages and providing pathways to increase consumption. These would integrate milk into school nutrition programs, promote its health benefits, and help fight declining sales while aligning with public health goals.

Millennials and Gen Z want variety, sustainability, and transparency. Stronger labeling to focus on claims such as "no added sugar," "complete protein source," and "naturally fortified," “grass fed,” “high protein low lactose,” “premium organic milk,” “probiotic infused milk," and "added bioactive peptides” may better resonate with these demographics. Secondly, innovative packaging that pushes milk's eco-friendly credentials and health benefits can strengthen its market appeal.

In today’s competitive market, consumers are more likely to look for value add and how consuming milk will be unique. When asked about whether or not they would continue to buy premium dairy, more than half of the population in 2023, and with food security on the peak, said they would. They notated the resilience of the dairy market and the fact that milk also appeals to budget-conscious consumers looking for value plus nutrition. Artificial intelligence continues to grow and will enable dairy brands to adapt and innovate more quickly.

For example, high protein skim milk from Gym Kitchen in the UK offers 60 grams of protein and is lactose and fat free. SuperNutrio is a new innovation with higher nutrients than the standard milk in the UK; Chobani launched Super Milk and packaging for providing relief to individuals affected by disasters; while Kerry offers a new dairy and plant-based blended line called smug. Amul Gold, a high fat milk from Amul, is another new dairy product. Farm fresh launches include a new Choco mint-flavored milk with added ashwagandha as a value ingredient.

Additionally, Japanese dairy company Seki Milk introduced milk bottles featuring manga design to trend with the kids’ age group. Brands also are incorporating their local market languages as customers are looking to resonate more with the values they uphold, for example, TINE brand is including both Norwegian and Sami languages.

As non-dairy alternatives expand, the fluid milk industry must embrace innovation to stay competitive. Hybrid products, functional formulations, and sustainable practices can redefine milk's place in modern diets. Educational campaigns emphasizing milk's immune-boosting properties, nutritional value, and versatility will be pivotal in re-engaging consumers.

While the road ahead is complex, the fluid milk industry is in a good position to evolve. By aligning with consumer priorities on quality, sustainability, and mainly health benefits, and providing value to milk will be able to retain relevance and secure a bright future in the global marketplace. Far from a story of decline, milk's journey is one of reinvention, adapting to meet the tastes and values of new generations. DF

Sonali Raghunath, Ph.D., is a food engineer cum scientist from the University of Minnesota. Her Ph.D. research explored innovative processing technologies to enhance dairy protein functionality. Currently, within the dairy world she works as a Technical Manager for protein and specialty ingredients, where she bridges food science innovation and business strategies to provide solutions and address technical challenges. She also serves as the Chair for IFT Dairy Foods Division. With degrees in B.Tech in Food Technology and an M.S. in Food Science, Raghunath has been recognized with various research, leadership, and scholarship awards, including an Excellence in Leadership award from IFT and Feeding Tomorrow scholarships, and MNDrive. Her expertise is centered around working with dairy and plant proteins, new product development, process improvement, ingredient application, non-thermal processing, and business management.