Americans are drinking less milk but eating more butter, cheese and yogurt, according to USDA data. Fluid milk consumption has been in decline for more than 70 years but consumer appetite for butter (+43%), cheese (+46%) and yogurt (+142%) has increased over the last 25 years. In 2022 alone, US consumers ate 42lb (around 20kg) of cheese on average, more than double the amount consumed in 1975.
And more recently, social media has given rise to trends such as cottage cheese ice cream and the butter board, highlighting demand for creative ways to use dairy staples.
So how is a heritage brand like Land O’Lakes adapting to a changing market? Heather Anfang, President, Dairy Foods and EVP, Land O’Lakes, Inc., told DairyReporter: “Generally, we are seeing cheese and butter positioned as the 'bread and butter' of America's dairy consumption as more consumers eat their dairy instead of drink it, and now is the moment to capitalize on this enthusiasm for the industry's future. In response, Land O’Lakes has focused on expanding our butter and cheese product offerings with new flavors and formats.”
Cheese: case in point
Speaking on trends in dairy more broadly, Anfang told us that innovations that focus on format – making dairy products easier to consume and cook with, for example – and flavor are particularly important in meeting shifting consumer demand.
For the member-owned dairy co-op, moving away from its reputation for a wholesale, ingredients-oriented brand and towards retail has been a winning strategy. “Historically, Land O’Lakes has produced cheddar cheese primarily for the deli case in grocery stores or for foodservice,” Anfang explained. “However, in 2021, we introduced an array of dairy case cheese offerings for retail consumption.
“Within the first 18 months, we expanded from around 100 to 3,800 stores in the Northeast and Midwest, creating a new outlet for member milk and opening new avenues to strengthen our consumer base.”
The company has also expanded this product lineup from 12 items to more than 30. “Our first products in the dairy case included shredded cheese and large-cut options like cheddar, mozzarella, and colby jack. We’ve now branched out into new flavors, such as creamy aged Italian and habanero jack,” Anfang said.
Resurgence in home cooking
Butter too remains a staple for the co-op, with new product launches aimed at satisfying demand for home-cooking. According to Mintel’s US Healthy Dining Trends Report 2024, 76% of consumers agree it’s easier to eat at home than at restaurants.
“An overwhelming percentage of consumers told us they wanted to continue preparing meals at home after the pandemic – with butter having a growing share in uses as both a cooking aid and in meals in general,” Anfang said.
To address that, the co-op launched Butter Balls – specifically, half-tablespoon butter portions for cooking – and is also tapping into seasonal flavor trends with limited-edition butters. “The limited-time nature of seasonal butter tends to fuel consumer interest and demand, so we’ve been regularly releasing flavors that align with what they want most,” Anfang said. “Right now, we have limited batches of Pumpkin Pie Spice Butter Spread and Maple Me Crazy Butter Spread.”
“There is a ‘dairy renaissance’ happening right now as viral social media trends permeate into pop culture,” Anfang added. “From butter boards, butter candles and ‘bulletproof’ coffee to viral cheese-centric TikTok recipes, now is the time to bring consumers more of the dairy they love.”
Eschewing plant-based cheese
So how about non-dairy items? While the co-op offers a plant-based spread, there are no plans in place for cheese. “The plant-based cheese market has struggled to gain a foothold in the marketplace, both on menus and on grocery shelves, over the past couple of years,” Anfang said. “Consumers have given the segment widespread trial, but repeat has been weak and volumes have been declining as those consumers migrate back to traditional dairy cheese options. The biggest challenge for any company entering the plant-based cheese space is flavor and meltability, with a complicated ingredient statement.”
A look into 2025
So what would be the defining challenges and opportunities in dairy NPD next year? “As we look to the future, we are confident in the continued strong demand for cheese products, both domestically and internationally, as brands expand their offerings with new flavors and formats,” said the Land O’Lakes executive. “This growth is driven by consumers who increasingly view cheese as a nutritious and satisfying protein source. Protein has surfaced as a top ingredient, with 42% of consumers prioritizing protein in their meals and 61% looking to increase their protein intake [according to The Hartman Group 2023 data].”
Economic pressures felt by consumers are also likely to define the direction of travel in 2025 – but there’s a reason for positivity. “Consumers are facing financial pressure from a variety of areas, and inflation remains the main driver of consumer purchase behavior,” Anfang said. “However, inflation in dairy product prices is cooling quicker than the overall consumer price index, as well as food as a whole. Dairy remains of great value for the nutrition gained.”
