The Great Dairy Turnaround of 2024
The numbers tell an incredible story of dairy’s renaissance. According to Circana, a research firm, there was a 2% increase in sales, taking the market to $17.1 billion in 2024. This growth comes after decades of steady decline in fluid milk consumption.
What makes this turnaround even more fascinating is its breadth. Domestic consumption of natural cheese and butter grew 1.5 percent and 5.8 percent, respectively, from 2023 to 2024. The dairy industry is witnessing growth across multiple categories simultaneously, not just in one specific product area.
In addition to growth in butter and cheese, domestic demand for yogurt and cottage cheese grew over the course of 2024, increasing by 6 percent and 12 percent, respectively, from 2023. This widespread growth indicates that consumers are actively choosing dairy products across their shopping decisions rather than making isolated purchases.
A significant 17.6% increase in raw milk sales also contributed to this trend, though health organizations continue to advise caution regarding unpasteurized milk. Still, the raw milk trend reflects consumers’ desire for minimally processed dairy products.
Cheese Market Exploding Worldwide
The global cheese market is experiencing unprecedented growth that defies expectations. The cheese market is assessed to grow at a CAGR of 7.80% between 2025 and 2034. The market is estimated to witness healthy growth in the forecast period of 2025-2034 to reach a value of around USD 216.36 Billion by 2034.
This growth isn’t limited to traditional cheese varieties either. The growing demand for natural, organic, and artisanal cheeses, driven by health-conscious consumers, is propelling the cheese market. Consumers are increasingly seeking high-quality cheese options that offer both taste and nutritional benefits.
The cheese market has been steadily increasing throughout the past five years, growing by 3% in sales and 2% in volume. Innova’s cheese trend research indicates growth to continue at a similar rate in the years to come. This sustained growth pattern suggests the cheese revival has strong foundations rather than being a temporary trend.
Additionally, more consumers increased than decreased their cheese consumption in the past year. Perceived healthiness, lifestyle changes, and more variety are helping to drive increased cheese consumption. The variety aspect is particularly important as consumers discover new cheese types and applications beyond traditional uses.
Americans Rediscovering Their Love for Cheese
American cheese consumption tells a particularly compelling story of dairy’s return to prominence. The average American eats 23 pounds of cheese in a year. From subs to burgers to the rising popularity of charcuterie boards, Americans are increasing their cheese intake by about half a pound per year, according to IDFA.
This increase isn’t happening by accident. Based on the current dairy industry trends, Americans are consuming 5 more pounds of milk each year just through cheese alone. Think about that: even as people drink less milk directly, they’re consuming more milk than ever through cheese products.
The variety available to consumers has expanded dramatically. There are currently over 300 varieties of cheese being sold in the United States. The most popular is still cheddar. However, specialty and artisanal cheeses are gaining significant ground as consumers become more adventurous in their cheese choices.
Restaurant trends are also driving cheese consumption higher. The popularity of cheese-centric concepts like charcuterie boards, grilled cheese restaurants, and artisan pizza places has introduced consumers to new cheese varieties and applications they then seek out for home use.
Health Benefits Driving the Dairy Renaissance
The resurgence of dairy milk can be attributed to changing American dietary priorities, with more emphasis on hydration, protein, and healthy fats. This represents a significant shift from the low-fat, diet-focused mindset that dominated nutrition thinking for decades.
This could be because health-conscious consumers are increasingly looking for simple labels and nutritional benefits. As consumers move away from ultraprocessed foods, I think they will look for less-processed foods with functional benefits. Dairy is perfectly positioned at the center of this movement.
In the US, healthiness is the leading driver of cheese consumption after taste. Among consumers who have increased their cheese consumption, healthiness is the #1 reason. This health focus is driving innovation in dairy products, with companies developing new formulations that enhance nutritional profiles.
Protein is set to remain one of the leading trends in food and beverage in 2025, with products such as high-protein spoonable and drinking yogurts and snack bars now mainstream. High-protein claims were already among the fastest-growing in US food retail in 2023 according to Circana. Dairy products naturally excel in providing high-quality protein, giving them a significant advantage over many plant-based alternatives.
Production Innovation Meets Consumer Demand
The dairy industry isn’t just riding consumer trends; it’s actively innovating to meet evolving needs. As of November 2024, the average U.S. butterfat test reached 4.218%, up 0.088 percentage points from the previous year, while the average protein test rose to 3.309%, an increase of 0.029 percentage points. For context, in 2020, the average butterfat test was 3.95%, and the protein test was 3.181%.
This improvement in milk quality isn’t accidental. Despite a 0.262% year-to-date decline in total milk production in 2024, calculated milk solids production increased by 1.345%, even as the national herd shrank by 557,000 cows. These efficiency gains mean the industry can meet new demand for milk solids more quickly than in the past.
Technology is playing a crucial role in this transformation. Modern dairy farms are using advanced breeding techniques, nutrition programs, and management systems to produce higher-quality milk with better nutritional profiles. This focus on quality over quantity aligns perfectly with consumer preferences for premium dairy products.
Sustainability initiatives are also becoming increasingly important. Dairy producers are investing in renewable energy, improved waste management systems, and carbon reduction programs that appeal to environmentally conscious consumers without sacrificing product quality.
Cottage Cheese: The Unexpected Comeback Star
Yet, Talbot says the true “Cinderella story” of 2024 was cottage cheese, boasting a volume growth of 12.6%. Daley agrees, adding that this 1970s staple is making a substantial comeback thanks to its nutritional profile. This growth is nothing short of remarkable for a product many considered outdated.
But gone are the days where dieters were told to enjoy a quarter cup of cottage cheese with a single peach slice. Today, influencers on Instagram and TikTok are demonstrating the versatility of this protein-rich ingredient for healthier cookie dough and bagel recipes. Social media has completely transformed how people think about and use cottage cheese.
Forty-five percent of households currently purchase cottage cheese over the course of a year. While boomers and seniors still have the highest likelihood of purchasing it, younger households are showing the highest rates of growth. Over the past 52 weeks ending on December 1, 2024, combined Gen Z/millennials and Gen X saw volume growth per household over 18% above a year ago.
The cottage cheese revival demonstrates how traditional dairy products can find new life through creative marketing and consumer education. Its high protein content, versatility in recipes, and clean ingredient profile make it perfectly suited to current health and wellness trends.
Butter’s Surprising Surge in Popularity
Butter consumption is experiencing its own renaissance, driven by changing attitudes toward dietary fats. Social conversations about Butter have increased by 23.57% over the past year and according to Statista, the revenue from the global butter market is projected to reach $49.91 billion in 2024, with an anticipated annual growth rate of 6.15% (CAGR 2024-2028).
With the foodservice industry diving into trends such as butter boards and even butter coffee, the consumption of butter is on the rise, as is its presence in restaurants, beyond just being served with bread. These trends have introduced consumers to butter as a featured ingredient rather than just a cooking fat.
The butter renaissance reflects broader changes in nutritional understanding. As research has challenged previous assumptions about saturated fats, consumers are becoming more comfortable with traditional fats like butter. This shift away from highly processed butter substitutes aligns with the broader movement toward whole, minimally processed foods.
Restaurant innovation has also played a role in butter’s comeback. High-end establishments featuring compound butters, butter-based sauces, and artisanal butter pairings have elevated butter from a basic ingredient to a culinary focal point that consumers want to replicate at home.
Global Cheese Markets Show Unprecedented Growth
Europe Dominated the Cheese Market in 2024. In 2024, cheese production in the EU was projected to increase by almost 1%, hitting around 10.5 million tons, as stated in a recent USDA World Markets and Trade report. This growth is fueled by strong internal consumption and steady demand for exports. The main producers are Germany, France, Italy, the Netherlands, and Poland, account for almost 75% of the EU’s overall cheese production.
The cheese industry in the U.S. is projected to grow significantly, reaching an estimated value of USD 62.66 billion in 2032, driven by the large utilization of cheese as an ingredient in most popularly consumed fast food items such as pizza, sandwiches, and other similar products. Furthermore, acceptance of ethnic cuisines such as Italian and Mexican that substantially use more cheese further propels the cheese market growth.
International trade in cheese is also expanding. United States cheese exports increased by 13.2% in 2021, mainly fueled by the increasing demand around the world. This export growth demonstrates that American cheese producers are successfully competing in global markets.
The global expansion reflects cheese’s versatility across different culinary traditions. As international cuisines become more popular worldwide, cheese consumption grows naturally as consumers embrace foods from cheese-centric cultures.
Plant-Based Alternatives Face Serious Headwinds
Once a booming category, plant-based milk is seeing slowed growth amid rising consumer concerns over health, processing, and nutrition. While still valued at $19.42bn globally, brands like Mighty Drinks and Jörd are exiting the market. This represents a significant shift from the explosive growth plant-based alternatives experienced just a few years ago.
Meanwhile, dairy milk is regaining ground, driven by familiarity and renewed interest in whole milk’s health benefits. As confusion around both categories grows, transparency and innovation will be key to keeping alt milks relevant. Consumers are becoming more discerning about the ingredients and processing involved in plant-based alternatives.
The plant-based slowdown isn’t necessarily permanent, but it reveals important consumer preferences. Many people who tried plant-based alternatives found they didn’t provide the same satisfaction, nutritional profile, or versatility as traditional dairy products. This has led to a “flexitarian” approach where consumers use both dairy and plant-based products for different purposes.
Price sensitivity is also playing a role. Plant-based alternatives typically cost significantly more than dairy equivalents, and in an inflationary environment, many consumers are choosing the more affordable option that also happens to be the one they prefer nutritionally and taste-wise.
Functional Dairy Products Leading Innovation
Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2024, reveals that 54% of global consumers look for healthy ingredients in the foods they buy. The top 10 claims in dairy products and alternatives globally are illustrative of the main health benefits that the industry offers; for example, probiotic content in yoghurt and sour milk products linked to digestive and immune health.
Items like Greek yogurt fortified with probiotics and omega-3-enriched milk target consumers who view dairy as a health supplement. Companies also experiment with high-protein, lactose-free, and vitamin-rich options to attract wellness-focused shoppers. These functional dairy products represent the industry’s successful adaptation to health-conscious consumer demands.
With countries such as China, Japan and South Korea all facing a growing share of their population being aged 65 or older, dairy products that promote muscle health, nutrition and immune function can be positioned as healthy aging products. These may vary from gut health-boosting yogurt and milk beverages to whey-fortified protein drinks and more premium offerings that contain ingredients such as lactoferrin.
Innovation in functional dairy is accelerating rapidly. Companies are developing products that combine traditional dairy benefits with added nutrients like vitamins, minerals, probiotics, and specialized proteins. This approach allows dairy to compete effectively with supplements and functional foods while maintaining its core appeal as a familiar, trusted food category.
Sustainability Meets Consumer Demand
Euromonitor’s Voice of the Consumer: Sustainability Survey, fielded January to February 2024, shows that nearly two thirds of consumers globally are trying to have a positive environmental impact through their everyday actions, due to concerns about climate change, and almost 60% believe they can make a difference. When buying food, consumers increasingly seek natural and locally-sourced products, which are seen as more sustainable due to reduced farm-to-fork miles, fresher taste, and their support for local economies. In addition, growing concerns about climate change and animal welfare are driving demand for more sustainable production practices.
The dairy industry is responding with significant sustainability investments. Modern dairy farms are implementing renewable energy systems, methane capture technology, and regenerative agriculture practices. These improvements are reducing the environmental footprint of dairy production while maintaining or improving product quality.
Local and regional dairy products are gaining popularity as consumers seek to reduce transportation emissions and support local economies. This trend benefits smaller dairy producers and creates opportunities for premium pricing based on locality and sustainability credentials.
Transparency in production methods is becoming increasingly important. Consumers want to know how their dairy products are made, how animals are treated, and what environmental practices farms use. Dairy producers who embrace this transparency are building stronger consumer relationships and brand loyalty.
Premium and Artisanal Dairy Markets Flourish
Premiumization is a key trend, with consumers increasingly seeking high-quality, artisanal cheeses with unique flavors and origins. The demand for organic, sustainably produced fresh cheeses is also on the rise, reflecting growing consumer awareness of health and environmental concerns. This premiumization trend is creating new opportunities for specialty dairy producers.
Artisanal cheese makers are experiencing unprecedented demand as consumers become more sophisticated in their cheese preferences. Small-batch producers who focus on unique flavors, traditional methods, and local ingredients are finding eager markets for their products. This trend is supported by the growth of farmers markets, specialty food stores, and online direct-to-consumer sales.
The premiumization trend extends beyond cheese to other dairy categories. Small-batch butter, heritage milk varieties, and craft yogurt are all finding consumer audiences willing to pay higher prices for superior quality and unique characteristics. This allows dairy producers to improve profitability while meeting consumer demand for exceptional products.
Education plays a crucial role in premium dairy success. Consumers are learning about different cheese types, milk sources, and production methods. This knowledge leads to greater appreciation for quality differences and willingness to pay premium prices for superior products.
