For the first time in decades, sales of dairy milk are growing – reversing a steady and significant drop that began in the mid-1970s with a only brief reprieve in 2009 when year-over-year sales increased before losing ground again in part to sales of plant-based alternatives.
According to market research firm Circana, dairy milk sales climbed 2% to $17.1 billion in the year ending Dec. 1 – an increase that was partly, but not entirely, boosted by inflation as units also increased 0.2% to 4.8 billion in the same period. Whole milk sales are climbing even faster – up 3.2% – as are sales of raw milk, which are up 17.6% even though FDA, the Centers for Disease Control and Prevention and other health organizations advise against drinking it. The category’s U-turn comes at a time when plant-based milk sales fell 5.9%.
Milk is not the only dairy category on the rise – yogurt consumption is up 20% year-to-date in 2025, and cottage cheese sales increased 18% in the year ending Feb. 23 to reach $1.75 billion.
Dairy’s sale surge reflects a shift in consumer priorities, including a desire for foods and beverages that better support their wellness, and which are competitively priced with a strong value proposition amid ongoing inflation, Chris Urban, vice president health & wellness partnerships at Dairy Management Inc., explains in this episode of FoodNavigator-USA’s Soup-To-Nuts podcast. He also shares how innovation and decommodification are spurring category growth.
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Dairy’s ‘remarkable’ turnaround
According to Urban, dairy’s “remarkable” turnaround is due in large part to its high protein content, which appeals to increasingly health-oriented shoppers and serves as a beard for more indulgent dairy consumption experiences.
“It is remarkable to see the dairy category’s growth. If you look at just year-to-day in 2025 for most every major category that we track,” and what is “even more amazing and remarkable is several of those categories are up double digits,” including yogurt, cottage cheese, dairy creamers and whipped cream, he said.
He explained much of the positive momentum is connected to dairy’s high protein, which 60% of consumers are looking to add to their diet, according to research by The Hartman Group.
Dairy innovations
This article is part of a collection of stories on dairy innovation. You can read the rest of the collection here.
4 ways dairy meets evolving consumer health needs
While dairy may be most strongly associated with protein, Urban notes there are other health benefits it delivers and which dovetail with Americans’ rising interest in food-as-medicine.
“The first space is what we call ‘grow and perform,’” which is “all about physical and athletic performance” and leans heavily on dairy’s protein for recovery but also calcium for bone health, he said.
The second space is around weight management and dairy’s satiating attributes, he said.
“The third space that we see is what we call ‘system supercharged.’ This is all about gut-health. So, 70% of your immune cells actually live in your gut,” and dairy products can deliver probiotics to support a healthy gut, which in turn affects the overall function of the body, he said.
The last space focuses on mental and emotional wellness and draw on bioactives in dairy that can support calmness as well as the emotional associations many people have with dairy as a treat, he said.
Dairy also has a strong foundation as a go-to source of healthy nutrition for children, on which Urban says many caregivers continue to rely.
Dairy offers strong value-added proposition
Dairy’s high nutritional value also gives it a competitive advantage in the current economy, according to Urban who explains that shoppers today want the most value for their dollar.
“In an inflationary environment, in the time that we live in, if you look at the cost per ounce for the bundle of protein and the nutrient density, it is very cost effective. And so consumers can turn to something that delivers on their wellness needs, but also do it in a way that is cost advantageous for them,” Urban said.
Innovation drives consumer engagement
Urban also attributes rising consumer interest in dairy to innovation that is expanding the category beyond the traditional confines of cheese, milk, yogurt and butter to include new ingredients, usage occasions and experiences.
For example, new technology is unlocking additional bioactives in milk, such as lactoferrin and tryptophan, and also new applications, such as applications for dairy proteins in clear beverages.
Side streams also are being redirected in innovative ways to create value-added, upcycled products, such as sodas made with whey for a punch of probiotics.
Additional investment needed to maximize dairy’s potential
As players across the value chain continue to innovate, Urban says they also will need to invest in consumer education, technology and at the farm level to seize the full market potential of dairy.
For example, at the dairy and ingredient level he sees the potential for new technology to more efficiently unlock bioactives and other high-value components of dairy. At the consumer level, he recommends brands fine tune their storytelling so shoppers can quickly and easily understand all the science-backed benefits of dairy.
