Like the winds of fall, the overall milk category is experiencing “swirling” results. Market research firm Circana reports that in U.S. multi-outlets and convenience stores for the 52 weeks ending Aug. 11, the overall milk category, comprising refrigerated milk, refrigerated alternative milk, “all other” refrigerated milk, and non-dairy refrigerated milk, notched $19.6 billion in dollar sales at a slight 1.2% decrease over the prior year. In the “all other” refrigerated milk segment, however, it was near-perfect fall sunshine with 21.2% growth and $252 million in sales.

Yet, reflecting the temperatures of fall, it was a torrential downpour for the $4.4 billion refrigerated non-dairy segment, with declining year-over-year (YoY) sales of 53%, while units plummeted 65% to 1.3 billion. Refrigerated alternative milks, with sales of $2.5 billion and units of 636 million, slumped 5.2% and 5.5%, respectively.

John Crawford, Cirana’s senior vice president for Client Insights-Dairy, notes that both dairy and plant-based milks are still struggling. “Dairy is down -0.8% in dollars and -0.3% in volume, while Plant is down -5.2% and -6.2%, respectively,” Crawford says. “Plant has been struggling with increasing prices, while Dairy has been widening the price gap between Plant and Dairy.”

Chicago-based Euromonitor International’s Miri Eliyahu, a consultant researcher, concurs that unit price increases in dairy products and alternatives have impacted grocery aisles and foodservice.

“The result for most categories was a struggle to maintain volumes as consumers withdrew from routine high-volume buying to a more frugal consumption even of dairy products, a category that isn’t considered to be discretionary usually,” Eliyahu explains. “The second major trend is the return of minimally processed dairy products to the favor of consumers. Full-fat milk, high-fat butter, creams and other high-in-fats type of dairy products gained steam from consumers despite the nutritional label clearly stating this is a product that contains high values of fat per serving. The reason for this is a return to ‘natural’ products, and a move away from processed and ultra-processed foods, even in the dairy and alternatives space.

“Even though some forms of processing is acceptable to consumers, such as fortification of milk, they still prefer to leave out other modifications of dairy products and keep natural traits such as a high-fat content, which is now growing more popular in milk and is in its path to premiumization in butters and spreads, as well as creams,” she continues.

A September 2023 report from Los Angeles-based IBISWorld titled “Dairy Product Production in the US” also provided information on not only fluid milk and milk-based products, but data on dairy processors who manufacture cheese, dry, condensed, and evaporated milk products, and butter.

“As with many commoditized industries, revenue performance most greatly depends on trends within per-capita data consumption and national dairy prices. But since per-capita dairy consumption has stagnated going into 2023, revenue trends have primarily been derivative to price movements,” the report stated. “The price of milk’s stability is expected to uplift revenue at a [compound annual growth rate] (CAGR) of 4.5% to reach $163.5 billion in 2023. But by the same token, costs have also risen and have pressured industry profitability during the period [from 2018-2023].”  

New products

Value-added functional milks containing protein, no lactose, and essential vitamins and minerals like those contained in dairy products continue to thrive.

New lifestyle brand Nurri launched Protein Milk Shakes exclusively at Costco stores nationwide just in time for National Chocolate Milkshake Day (Sept. 12). The ultra-filtered, 150-calorie milk beverage “brings more flavor and fun,” while containing 30g of protein, 2.5g of fat and only 1g of sugar in an 11-ounce recyclable can, the Little Chute, Wis., company says. The lactose-free shake also is shelf-stable and portable.

“Nurri’s mission is to make ‘nourishment’ better, making ‘better-for-you’ products even more flavorful and fun,” said Adam Tollefson, director of marketing. “We’re excited to kick off the brand with our chocolate shakes — essentially a creamy, indulgent milkshake in a can. These shakes launched exclusively at Costco, and we plan to expand into other categories such as iced coffees and creamers, available through various retail partners.”

Also offering lactose-free milk along with organic creamers, yogurt, cheese, and butter is Broomfield, Colo.-based Horizon Organic, which in April, as part of Danone's Renew Danone Strategy announced in 2022, was sold to Los Angeles private equity firm Platinum Equity.

Horizon Organic released a new easy-to-digest lactose-free milk enriched with DHA to support brain and eye health, which is now available in an easy-to-digest lactose-free form. Its new campaign, “This Milk Means Business,” which includes digital, social, and banner ads, aims to challenge the prevailing assumption that all dairy products are created equal.

"A day in the life of a kid would test any adult’s endurance,” says advertising agency Duncan Channon’s Creative Director Jessea Hankins. “From freeze tag to playing pretend, kids go hard. And they approach it all with enviable amounts of unfiltered energy and imagination. Fueling them up on Horizon Organic is a nutrient-rich no-brainer. Our goal was to speak to parents without ever addressing them directly, and to portray kids in a way that they’d instantly recognize as authentic. In the end, parents don’t need to overthink it: Horizon Organic is a much-needed easy win.”

Embracing authenticity and health benefits

In Chicago-based Mintel’s August report, “Milk and Non-Dairy Milk, US, 2024,” the market research firm explains that consumers are seeking the best of both worlds, which includes dairy and non-dairy milks. Brands that foster trust and engagement by embracing authenticity and inherent health benefits will capitalize, the report states.

In 2024, $18.1 billion is the estimated value sales of dairy milk, a slump of 1.2% over the prior year. Yet, Mintel data forecasts long-term growth of 5.5% for dairy milk, with retail value sales predicted to reach $19.1 billion by 2029. However, while the excitement and demand for non-dairy milks may have reached a peak, the category, which notched sales of $3.4 billion in 2024, at a decline of 1.8%, is still expected to grow as “consumers persist in seeking alternative options for variety,” according to Mintel. With a CAGR of 9.4%, non-dairy milk retail value sales is forecasted to reach $4.1 billion by 2029.

With the changing seasons, several brands are debuting new pumpkin forward flavors to add excitement.

Plant-based milk brand MALK Organics released a new limited-edition Almond Pumpkin Spice. The 100% organic, ready-to-drink (RTD) beverage is free of gums, oils, and fillers and features a blend of cozy fall spices. The new Austin, Texas-based SKU also is vegan and made with clean ingredients, including Filtered Water, Organic Pumpkin Puree, Organic Almonds, Organic Coconut Sugar, Pure Organic Vanilla Extract from Vanilla Beans, Himalayan Pink Salt, and Organic Cinnamon, Nutmeg, Ginger, and Clove Extracts.

The company also will be reintroducing its popular limited-edition Holiday Nog.

Crazy for coconut

All-natural coconut milk continues to surge forward. Wilmington, Del.-based Allied Market Research’s report states that coconut milk beverages market was valued at $6.3 billion in 2023, and is estimated to reach $21.7 billion by 2033, growing at a CAGR of 13.2% from 2024 to 2033.

There’s also good news for the dairy-based and non-dairy coffee creamer market, according to Allied Market Research. In 2023, the coffee creamer market was valued at $4.8 billion, and is estimated to reach $9.9 billion by 2033, growing at a CAGR of 7.6% from 2024 to 2033.

“Growing health consciousness and dietary preferences are reflected in the growing demand for plant-based and low-sugar creamers,” Allied Market Research states. “Enhancing the appeal of the product and satisfying a wide range of consumer tastes are two other important functions of innovations in flavor variants and formulations. Factors that lead to more coffee consumption and, in turn, a higher need for creamers are the globalization of coffee culture, rise in disposable incomes, and urbanization. Growing customer preference for environmentally friendly and sustainable packaging methods is having a major impact on market expansion.”

Coffee mate, a brand of Nestlé, thought outside of the box when it unveiled a new limited-edition Bagel and Cream Cheese creamer. The brand described the offering as having "notes reflecting cream cheese, sweetened condensed milk and a slightly savory hint of bagel in every sip."

Circana’s Crawford continues to monitor the ups and downs of the dairy industry. Within total food and beverage, prebiotics and probiotics are in demand, with a top growing claim of 9.5%, he states.

Moving forward, Crawford remains optimistic about the state of the dairy industry, particularly because “volume is starting to rebound as inflation has eased. Dairy pricing has eased more than Total Food & Beverage, with Dairy up +1.2% while total food and beverage saw a 2.4% increase.”