Emerging Trends in the US Milk Industry

Historically, the dairy industry in the United States has been one of the strongest in the world. With 91% of American consumers regularly drinking some form of milk. There have been considerable innovation and consumption alterations in the past few years – most notably due to the advent of plant-based milk options. With more options available and generational divides appearing more prevalent than ever, Mintel is exploring the current trends in the US milk industry and how we expect it to develop in the future.

In Mintel’s 2024 Global Food & Drink Trends report, we reported that the ageing US population may look to groceries as a source of healthy nutrients and health benefits that can help support them as they age. The dairy milk industry could have great potential in this area, but brands will need to work hard to boost the reputation of milk as offering health benefits Considering that 2 in 5 people aged 55+ consider non-dairy milk to be more nutritious, and only around 1 in 5 consider dairy milk to be more nutritious. However, two-thirds of older consumers say that they drink dairy milk as it is what they are used to.  Dairy brands have the opportunity to capitalize on extreme Gen X loyalty and reaffirm it by boosting how their products market the health benefits of dairy milk.

With vegan diets and plant-based eating becoming ever more popular within the last decade, it should come as no surprise that plant-based milk are serious disruptors in the US milk industry. To view this change on a micro level, Mintel has reported that between 2022 and 2023 consumption of dairy milk has decreased by 4%, while consumption of non-dairy milk has increased by 5%. These two shifts combined have put dairy and non-dairy milk consumption within around 10% of each other; a rate that could hardly have been predicted just a few years ago.

However, the rise of plant-based milk does not necessarily mean the fall of dairy milk. Although consumption rates have dropped, the majority of US consumers said that they purchase a mixture of dairy and non-dairy milk products. Indeed, less than 1 in 5 consumers said that non-dairy milk is their primary milk type, while more than half of consumers purchase non-dairy milk. So, this shift in the milk industry may be towards a more varied shopping basket rather than a like-for-like switch.

Plant milk has grown in popularity in recent years, but some options are more favorable  among US consumers than others. Almond milk is by far the most frequently consumed, with 2 in 5 consumers purchasing it in 2023. Oat, coconut, and soya milk are all relatively equal, with 15-20% of consumers purchasing these plant-based milk products in 2023.

Why are consumers shifting towards plant-based milk with such strength? While a third of consumers say that lactose intolerance within their household is the motivating factor for purchasing non-dairy milk, the biggest reason is because it is better tasting than dairy milk. However, interestingly, this is also the most commonly cited reason for dairy consumers – so perhaps it comes down largely to personal taste and preference!

On a more conscious level, plant-based milk consumers have stated their preference for non-dairy milk as it is perceived to be more nutritious, more natural, higher in protein, better for animals, and better for the environment. We can see that there is a significant ethical factor in plant-based milk consumption, along with dietary preferences.

In terms of new product launches, within the plant-based milk space, it is ‘barista style’ milk with a focus on flavors that are most prominent. More consumers noted that they add their non-dairy milk to coffee than dairy milk, so with coffee being a major usage of plant-based milk, it is clear why barista-style milk is a popular choice from brands.

In the Mintel 2023 Future of Baby Food & Milk report, our analysts reported that immunity-boosting and plant-based options for baby milk are becoming prominent. European parents are focusing primarily on baby milk and foods that can support their children’s immunity – in fact, new launches of baby milk and foods with immunity claims have grown from 9% to 15% between 2018 and 2023. Similarly, an increasing amount of baby milk and foods with organic claims have been launched in recent years.

Meanwhile, in the US, plant-based baby milk is the most significant growing space. New launches of plant-based baby milk have tripled since 2018. The age group which most commonly reported purchasing only non-dairy milk was 35-44. With the average age of American first-time parents rising in recent years, it could be that more parents of babies and toddlers do not drink animal milk, and wish for their children to do the same. 

Mintel’s research suggests very strongly that plant-based milk consumption has increased over the past few years, and will continue to grow. With more options available than ever before, an increasing number of consumers are incorporating non-dairy milk into their diet. Though consumers are not generally cutting dairy milk out of their diets entirely, we expect to see more consumers opting for a mixed diet of dairy and non-dairy milk.

In terms of where the dairy milk industry can grow, Gen X is a sensible area for growth and loyalty. Although low numbers of Gen X consumers perceive dairy milk to be better for their health, they tend to be more loyal to dairy milk and their loyalty can be cemented by alternative marketing that focuses on milk’s health benefits.

For the baby milk industry, plant-based remains a key area of growth. In the US, growing numbers of parents are choosing plant-based milk for their children, and this may be a key area for new product launches and innovation.