Opinion: Dairy’s next wave of innovation

Disclaimer: The following article is an opinion piece. This article represents the personal views and perspectives of the author and does not necessarily reflect the opinions or positions of Fonterra. Readers are encouraged to verify any claim or statement made below for themselves and Fonterra is not responsible for any decisions taken in reliance on the same.

Consumer behaviour continues to evolve in response to changing circumstances. Economic challenges push consumers to be more cautious with their spending, yet the desire for experimentation and enjoyment remains. This constant shift underscores the need for brands to stay attuned to consumers’ needs and expectations to remain relevant.

In exploring “What Mintel's 2025 Food & Drink Trends Mean for Dairy”*, it highlights how consumers’ health priorities and supply chain disruptions are not only reshaping purchasing decisions but also driving the next wave of product innovation and strategic adaptation.

Fundamentally nutritious: Meeting consumer demand for simplicity and less processed dairy

Post-COVID, consumers have become more critical of food processing, associating long ingredient lists and additives with ultra-processed foods. In the UK, consumers look more closely at the ingredients in yogurts, and 53% say yogurts are a good choice when looking to avoid processed foods¹. Consumers who hold this view use yogurt more frequently and in larger quantities¹, signalling the importance of fostering a minimally-processed image for brands.

Investment bank Morgan Stanley estimates that by 2035, 24 million American adults will take weight loss drugs². Dairy brands need to be prepared for this shift. However, GLP-1 drugs, commonly used for weight loss, have been linked to side effects such as loss of muscle mass and reduced bone density³.

Dairy can play a credible role in supporting consumers of GLP-1 drugs by addressing these concerns. In the US, reviews on Atkins Strong Protein Shakes, with muscle and gut health support, target “those trying to keep the weight off following their GLP-1 journey^4,5.” Low-fat products—including blends of dairy and plant-based ingredients—can also appeal to weight-conscious consumers. In the UK, Smug Dairy Cheddar with Oat offers a hybrid approach, claiming 35% less saturated fat than standard cheddar cheese⁶. Brands can position dairy products as a light booster or add-on that provides nutritional value without being too filling. Dairy boosters, such as fortified yogurt or protein-enriched milk, can provide a convenient source of vitamins, minerals, and protein, making them appealing to calorie-conscious consumers."

Atkins Strong Milk Chocolate Flavoured High Protein Shake. Source: Atkins Online Store

SMUG Dairy Cheddar with Oat. Source: Smug Dairy

Rule rebellion: Social media trends and new eating habits reshaping dairy usages

New eating habits have spawned from social media trends such as “girl dinner” and “Balkan breakfast”, and straddle the line between snacks and meals.

Girl dinner, a term that became famous on TikTok, refers to meals composed of snacks, sides, or small amounts of random foods. Balkan breakfast includes plenty of whole, raw vegetables, bread, cheese, and sometimes pickled vegetables, cured meat, and a sprinkling of salt or a dip⁷. Dairy products like cheese and yogurt heavily featured in these viral social media food trends.

Additionally, the “smart nutrition revolution” ⁸ is shifting meal replacements from a weight management focus to convenient, time-saving options, driven by consumers' increasingly busy lifestyles. This shift presents an opportunity for dairy brands to leverage their taste credentials and make meal replacements more appealing to a wider audience.

Dairy is also evolving in the beverage space, leading to the rise of creative uses such as butter lattes and using creamers beyond coffee. In the US, Whip Shots offers vodka-infused flavoured whipped creams designed to be used as cocktail toppings⁹.

Whip Shots’ “King Cake”. Source: Whip Shots

Meanwhile, breakfast consumption patterns are shifting, with emerging options such as rice-based breakfast foods from Asia, that rely less on dairy¹⁰. Dairy brands can respond to this by creating new products that complement savoury breakfast options as well as multicultural breakfast foods that combine flavours and ingredients from different regions.

Chain reaction: Preserving heritage

Geopolitical and climate challenges are increasingly disrupting food supply chains, directly impacting consumers.

Tapping into the strong link between food and culture, brands can foster cultural appreciation while acknowledging the influence of a globalised world. In Australia and New Zealand, 40% and 34% of consumers, respectively, say food is their primary way of staying connected to their heritage¹¹. Dairy brands can strengthen their image as heritage food and connect with consumers on authenticity.

Meanwhile, the influence of immigrants on the food industry in their host countries will grow. For immigrants, food is a piece of their home country and dairy plays a role in many food cultures.

In Australia, where Indians are now the second-largest migrant group¹², typical Indian dairy products, such as dahi and paneer, are now available.

At the same time, cost and supply chain disruptions are driving reformulation efforts. Yogurt and dessert brands are exploring ways to reduce cocoa and chocolate use while maintaining indulgence, as cocoa prices surge due to climate-related crop disease and drought¹³.

Climate change is also affecting the price and supply in the coffee industry. In France, Germany, and Italy, over 40% of coffee consumers say rising prices would make them buy less coffee¹⁴. A decline in hot beverage consumption could, in turn, affect demand for milk and creamers. To address this, milk brands could introduce new hot drink options such as caffè d'orzo, a popular Italian, caffeine-free, roasted barley beverage, to engage consumers.

The views expressed above are the opinion of the author, not those of Fonterra, and Fonterra is not responsible for any decisions taken in reliance on the same.