Is Dairy Entering a Golden Age? Executives Say Yes

Despite ongoing challenges, the dairy industry may be entering a “Golden Age,” according to a new survey by Circana’s Market Trends report. Categories like refrigerated butter blends, cottage cheese, and yogurt have shown double-digit growth, with refrigerated butter’s dollar sales rising over 10%. Additionally, a halt in the decline of milk sales and potential legislative support from the “Whole Milk for Healthy Kids Act” could further boost liquid milk markets.

A McKinsey & Co. survey reveals that nearly two-thirds of dairy executives plan to increase investments in product innovation over five years, with 79% focusing on manufacturing innovations such as extended shelf-life packaging. Executives are optimistic about the industry’s trajectory, fueled by a resurgence in demand for consumer dairy and expectations of more than 3% volume growth in three years.

Nonetheless, executives remain cautious about rising costs, as 69% of respondents see this as their top concern for 2024. Challenges in talent acquisition persist, identified by 67% of respondents, an aftermath of the COVID-19 pandemic. Nevertheless, the industry enjoys robust sales growth and a forward-thinking executive class poised to leverage dairy’s appeal as a less-processed food with functional benefits.