Consumers’ focus on wellness and functionality will remain at the forefront in 2025, as predicted by US market research company Spins. Dairy brands are expected to capitalize on this trend by expanding into personalized diets, products that support weight management, and healthy aging, while also exploring opportunities in functional and high-protein segments.
The high-protein category continues to show significant growth, with nearly $5 billion in sales and a projected 9.3% growth rate in the snacks and beverage sector in the US. This presents a promising opportunity for companies involved in dairy protein ingredients. Spins reports that dollar sales of whey and milk proteins, the leading protein ingredient category with almost $705 billion in US sales, grew by 8.6% year on year. Additionally, the combination of whey and casein saw a 120% growth, surpassing whey in dollar sales by nearly $26 million. Despite a decline of 8.2% in dollars, proteins that combine animal and plant components remain the second-largest segment in functional protein ingredients, generating close to $532 billion.
Functional foods are also gaining traction, particularly in beverage products, as indicated by Spins’ new item dollar share index. Yogurt leads the way in dairy and plant-based categories, with an innovation rate of 12.4%, placing it among the top 10 busiest food and beverage categories for new product development. However, yogurt lags behind the industry average in dollar share, suggesting room for improvement to enhance its value proposition and drive sales. Within functional beverage products, wellness shots, including dairy-based gut shots, have shown growth across digestive health, mood support, and detox trends. Probiotics stand out as top functional ingredients driving sales in various health solutions.
Three emerging subcategories are also worth watching in the dairy industry. Cottage cheese is expected to continue its resurgence as a natural, low-calorie, and high-protein food, with opportunities for innovation in flavors, formats, and protein claims. Colostrum, a dairy-derived ingredient used in supplements, is experiencing growth and has crossover potential for gut and immune health applications. A2 dairy brands may benefit from diversifying into formats like butter and cheese, as US butter consumption continues to rise. While A2 dairy’s dominant player, A2 Incorporated, has seen some challenges, tapping into Americans’ interest in butter and cheese could drive growth in this segment.
As 2025 progresses, we can expect to see more product innovations in the dairy industry. Stay tuned for the latest developments and trends shaping the dairy market.
