The beauty of Innova’s annual Top 10 Trends of the food and beverage industry is that the trends apply across all market categories—including dairy products and dairy alternatives. Dairy and dairy alternatives overlap in many ways, differ in others, and our Top 10 Trends can be interpreted across both.
Let’s set the stage with an overview of consumer patterns. Innova Market Insights’ research shows that more than one in four global consumers drink milk at least once a day while another 45% report having milk one to six times per week. Breakfast is the primary meal occasion for milk and milk is the top morning meal beverages in 35 countries surveyed by Innova. Nearly half of those consumers we surveyed choose dairy milk, compared to about one in 10 consumers using only plant-based alternatives. In recent years, we’ve seen growth in a flexitarian eating patterns, including the more than one-third of consumers surveyed who say that they are flexible in choosing both dairy and non-dairy products.
We see differences in the types of claims on dairy and non-dairy packaging. Nutrients claims such as “high in protein” and “low in fat” are most widely used for dairy milk. Claims on non-dairy milk alternatives tend to highlight their non-animal features with statements such as “vegan” and “plant-based,” as well as claims focusing on allergens and intolerances, namely “gluten-free” or “lactose-free.” Not surprisingly, sugar reduction-related claims are becoming more prevalent across both categories. So too are ethical claims pertaining to the environment, animal welfare, and worker health.
Top 10 Trends and Dairy: Prioritizing Prevention
Consumers cite health reasons as the top drivers to consume more dairy alternatives and less dairy. They believe they are taking positive actions toward protecting their personal wellbeing and preventing various health concerns.
When we looked at active health claims on dairy product launches during a recent 12-month period, we noticed a marked rise in joint health claims. This is not surprising since dairy products are the hallmark source of calcium, needed for healthy bones and joints. Other claims on the rise pertain to skin health and brain health. These claims typically are not linked to dairy. However, we see untapped opportunities for dairy in holistic health, and nearly two-thirds of consumers surveyed globally say they consider mental wellbeing when thinking about holistic health.
We drilled down to learn more about major concerns around mental health. Stress and anxiety is the top concern, followed by tiredness and fatigue and then depression. Mental health claims are more common in countries that do not have the same claims regulation as in the US. An Italian dairy product launched in early 2024 contains valerian for sleep and relaxation and vitamin B6 to reduce tiredness and fatigue. A Japanese dairy drink launched in late 2023 includes GABA for improved sleep quality.
Digestive health, a major concern of consumers worldwide, enjoys a long and established association with fermented dairy and dairy alternatives. Consumers prefer dairy and dairy alternatives with added health benefits and are curious about the fermentation process to produce dairy. Growth in health benefits centers around postbiotics and prebiotics. Postbiotics are defined as “a preparation of inanimate microorganisms and/or their components that confers a health benefit on the host.” Launches touting postbiotics show a solid compound annual growth of +145% CAGR between 2021 and 2023. Launches with prebiotic claims are up 20% during the same period.
Top 10 Trends and Dairy: Nurturing Nature
The connection between dairy and nature is quite strong. When we asked consumers what they associate with nature protection, more than one-third said “ensuring animal welfare.”
Carbon footprint also is associated with both nature protection and dairy production, and interested consumers could use carbon emissions data to determine how sustainable a product is. This includes both animal dairy and dairy alternatives. In fact, two in five consumers say that dairy alternatives are more sustainable than regular dairy. Innova sees 35% average annual growth in dairy categories where products were making carbon footprint claims between 2019 and 2023.
Consumers also look for regenerative farming claims. The dairy industry is delivering, with +60% average annual growth in dairy categories with a regenerative agriculture-related claim between 2021 and 2023. Forest protection claims are on the rise in dairy alternatives.
Top 10 Trends and Dairy: Ingredients Take the Spotlight
Innova’s top trend for 2024 focuses on ingredients, as consumers look for specific ingredients and manufacturers showcase ingredients through labeling and claims.
One-third of consumers globally say they always look at ingredients of interest on the product package. Natural ingredients are a key driver of dairy consumption, following taste and health. Protein is the most important ingredient and nearly half of consumers surveyed name milk and cheese as preferred protein sources. Dairy protein ingredients are being incorporated into other product categories too. A cookie launched in the US has a protein blend of hydrolyzed milk protein isolate and milk protein isolate, while a waffle mix touts its dry yogurt ingredient.
Plant-based launches showcase innovation in ingredient bases for dairy alternatives. For example, lupin is up 111%, peanut milk is up 69%, and cashew nuts are up 52% during a recent 12-month period.
Top 10 Trends and Dairy: Indulging in Health
We see growing overlap between health and indulgence. Consumers say that the best way to make indulgent food and beverage categories healthier is a combination of limiting/reducing non-healthy and artificial ingredients and using more natural ingredients.
Dairy and dairy alternatives are ideal for combining health with indulgence. Consumers report choosing healthier alternatives for desserts and ice cream and looking for a healthier alternative in dairy snacks. This includes seeking products that limit sugar, where claims are growing rapidly.
Top 10 Trends and Dairy: The Rise in Applied Plant-Based Offerings
Innovation in dairy alternatives is attracting consumers who interested in plant-based products. Consumers name health, variety, and the environment as top reasons to consider 100% plant-based alternatives. When we asked consumers why they increased their consumption of dairy alternative products, the top reasons were variety and novelty in non-dairy milk, yogurt, and cheese offerings. Consumers surveyed are most familiar with and willing to buy products made from almond, rice, coconut, or oat. Soy is less popular in the US than in Asia, where soy products are regularly incorporated into Asian cuisines.
Consumers are somewhat split on how closely plant-based dairy alternatives should replicate animal-based dairy. More than one-third of those surveyed want their milk alternatives to mimic the taste and texture of cow’s milk, while one-quarter say they would prefer the drink to reflect the taste and texture of its key plant-based ingredients.
Manufacturers are supporting a major shift in the dairy category. Global value sales of plant-based milks are growing at more than twice the rate of dairy milks. The fastest growing dairy alternative subcategories include plant-based butter alternatives, margarines and spreads, and spoonable non-dairy yogurt. In the US, we also see the emergence of fungi-based yogurt and unique dairy alternatives such as plant-based kefir and oat milk drinks with boba. Product subcategories are evolving to better replicate the sensory features, taste, and performance of dairy, including barista products with creamier textures and comparable frothing.
Health and sustainability represent areas of continued improvement. Clear on-pack messaging is increasingly important as consumers demand greater transparency and understandable claims. A growing number of plant-based alternatives contain added vitamins and minerals to better replicate the nutrient profile of dairy. Dairy alternatives with long or complex ingredients lists could deter consumers who seek products with recognizable ingredients, fewer ingredients, and no “ultra processing.”
When we asked consumers how milk alternatives could be improved, their top responses were improved taste, reduced cost, more protein, less fat and fewer artificial ingredients. The desire for nutrient parity has to be balanced with shorter and simpler ingredient lists.
Key Yogurt Considerations in the US
In addition to our global observations that have relevance in the US, our consumer research and monitoring of yogurt launches in the US reveal a few nuances. Health and taste are the primary reasons for consuming yogurt in the US. In fact, flavor ranks ahead of cost as a purchase influencer. Fruit flavors in general are the most popular but some previously popular flavors are declining. We see upticks in more “adult” flavors such as passion fruit, lemon and lime.
Similar proportions of consumers consider dairy yogurt or dairy alternative yogurt as a staple. This demonstrates the mainstreaming of non-dairy yogurt.
Protein is highly influential as a health claim for US yogurt consumers. Other claims that resonate with consumers pertain to sugar reduction, fat reduction, and clean features. As with global dairy trends, health features resonate with US non-dairy yogurt consumers. This suggests that manufacturers should innovate toward better nutrition parity between dairy and plant-based yogurts. Also, manufacturers will need to find the balance among clean labels, shorter ingredient lists, no artificial ingredients, and palatability, especially in plant-based yogurts. Sustainability also matters.
Last but not least, new technologies are advancing innovation in lab-grown dairy. We found that 44% of consumers are willing to try lab-cultured and lab-grown dairy and one in three are curious about cell-based milk. It’s also becoming clear that new technologies such as precision fermentation have the potential to reshape the dairy and plant-based dairy marketplace across all subcategories, moving toward more sustainable, clean, and less animal-dependent products.
Lu Ann Williams is Global Insights Director at Innova Market Insights, provider of market research services including the Innova Database. With more than 25 years’ experience in the food industry, Lu Ann is a trend expert and frequent public speaker at events worldwide. She leads a team of analysts and works with global clients. Contact her at [email protected].