The Future of Protein Includes Dairy

 

U.S. consumers are drinking less milk with each passing year, but overall dairy sales are on a multi-year winning streak. Cheese, butter and yogurt are fueling category growth, along with new dairy-based products designed to capitalize on convenience, health and snacking trends. These products are starting to combine dairy and plant ingredients in order to pack in the protein in order to appeal to the 20% of Americans who are following a high-protein diet, as reported by the International Food Information Council in its 2024 Food & Health Survey. 

Data from market research firm Circana shows the refrigerated dairy aisle has been the largest category in retail grocery over the last year with $76 billion in sales. Over the past three years, dairy retail sales have notched a growth rate of 15.4% or $10.1 billion.

According to a new report from CoBank’s Knowledge Exchange, the outlook for retail dairy sales remains strong with additional room for growth as consumer preferences and purchasing behaviors evolve. Products tailored to meet consumers’ growing desires for healthy, protein-rich snack products have emerged as a new growth opportunity.

The report says that over the next three years, approximately 90% of people have no plans to reduce their dairy product purchasing behavior. Dairy’s growth has not all been driven by recent price inflation either. Dairy product consumption has grown by 7.7% on a per capita basis for a compound annual growth rate (CAGR) of 0.8% over the past decade, moving from 606 to 653 pounds per person on a milk-fat equivalent basis based on USDA data.

“Dairy products have a diversity of applications and innovative dairy processors are leveraging that to their advantage,” said Corey Geiger, lead dairy economist with CoBank. “The healthy snacking category is a growing megatrend that dairy products can capitalize on with a host of conveniently packaged solutions from low-fat cheeses and specialty yogurts to functional dairy drinks.”

Yogurt, for example, has moved from being a morning meal to becoming an anytime snack or healthy dessert choice. Per capita consumption in the U.S. has grown 142% over 25 years, with Greek yogurt pacing category growth. Yogurt brands are also capturing new sales as consumers step-up use of weight-loss drugs. Danone attributes a jump in demand for its high-protein, low-calorie yogurts, at least in part, to consumers under treatment with those drugs or just trying to manage their weight or wellbeing.

CoBank food and beverage economist Billy Roberts said consumer concerns around highly processed foods and preference for clean labels are areas where traditional dairy products can resonate, particularly with younger demographic groups.

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“One of the things we’ve learned from following the plant-based food sector is that long ingredient legends are an obstacle for many younger, health-conscious consumers,” said Roberts. “Dairy products are generally perceived as having clean labels with few ingredients. Dairy brands can capitalize on that with the right product mix and marketing.”

Take note, according to the IFIC survey, only 5% of Americans follow a flexitarian diet and 3% follow a vegetarian diet, which grew from 2% last year. Both of these diets include dairy. Only 2% follow a vegan diet, and 3% follow a plant-based diet, which is down from last year. 

The future of dairy is to have all types of foods be made with dairy, even plant-based foods. Lenny & Larry’s, a primarily plant-based sports nutrition company, does it with its new Dip’d Wafer Bar and The Boss Cookie. 

The American Dairy Products Institute (ADPI) is making it easier for food and beverage formulators to “Make It With Dairy,” the association’s new scientific-based information hub. Check it out HERE. 

“ADPI is expanding its ingredient portfolios to be at the forefront of providing powerful tools and resources through ‘Make It With Dairy,’ as an ongoing effort to promote the world-wide use of dairy ingredients,” said KJ Burrington, vice president of technical development at ADPI. “Having in-depth knowledge of dairy ingredient applications and functionality can be a valuable asset to product developers. This knowledge will help product developers select the right dairy ingredient to fit the food application and accelerate their product development process.”

These latest resources outline dried dairy ingredient selection by food application and functional properties along with a composition guide that summarizes key details from the ADPI library of ingredient standards. And as new dairy ingredients become available, they will be added to the online tool. 

In case you missed it, today’s blog sponsor, Idaho Milk Products, received the 2024 Breakthrough Award for Dairy Innovation for its IdaPlus 1090, a protein used in ready-to-drink (RTD) beverages with an impressive 24-month shelf life. The award was presented at the 2024 ADPI/ABI Annual Conference on Tuesday, April 30.

Founded in 2009, Idaho Milk Products was the realization of the vision of a small number of progressive dairy farmers in southern Idaho. The vision extended to a state-of-the-art milk processing plant in Jerome, Idaho, targeted at high-specification dairy ingredients. Notably, the first bag of milk protein concentrate (MPC) was created in February 2009. Since then, the business has grown operationally and commercially with its milk protein isolates (MPI) and customized ingredients being utilized by food industry customers domestically and internationally.

IdaPlus 1090 possesses significantly greater solubility than standard milk protein concentrates, MPCs and MPIs, leading to faster dispersion and hydration, even at colder processing temperatures, the company states. This results in smoother, less grainy mouthfeel and less chalkiness, according to Dr. Venkat Sunkesula, vice president of product research and development. Beverages experience improved viscosity, including maintaining low viscosity over shelf life and higher heat stability, reducing the occurrence of gelling. In addition to improved texture, consistency and flavor, manufacturers have encountered shorter make times and the potential to remove stabilizers, resulting in lower costs and cleaner labels. The future growth potential of these types of items is bright.