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Although dollar sales were down 0.7% to $3.39 billion, dairy milk volume climbed 0.5% while units rose 1% during the 12 weeks ended March 24, reports Chicago-based market research firm Circana. White milk volume and units edged up 0.3% and 0.7%, respectively. But flavored milk saw its volume and units jump 3.7% and 4.5%, highlighting continued interest in milk as a tasty standalone beverage, not just an ingredient or cereal topper.

Organic Valley Family First is fortified with DHA Omega-3, which supports brain health.

A deeper dive into recent sales data reveals a few key trends in the category. For starters, says Annette Taylor, senior director of commercial marketing at Washington, D.C.-based MilkPEP (the Milk Processor Education Program), sales of value-added milks are up 2.7%, led by the ultra-filtered (more protein, less sugar) and lactose-free segments. However, “Both traditional and value-added [white and flavored] milks are gaining buyers across all segments,” reports Taylor. “And white milk, regardless of type, is seeing growth in larger pack sizes,” driving volume per unit up slightly.

Actually, there’s growth at both ends of the size spectrum. In addition to 96-ounce jugs, “Smaller sizes… between 48 and 64 ounces (i.e. larger than a quart but smaller than a half-gallon) are also gaining market share,” reports Alex Schams, marketing director at Organic Valley, La Farge, Wis. “This trend is likely due to consumers dealing with inflation and higher prices,” he adds.

FORTIFIED MILKS IN DEMAND

Although total organic milk volume is down slightly, the folks at Organic Val- ley expect the company’s sales growth to continue through the balance of 2024, thanks in part to its new Family First lineup. “The [fortified] product not only delivers 12 essential nutrients in each serving but also includes 50mg of added DHA Omega 3, which supports brain health,” reports Schams, who says 85% of Americans lack sufficient DHA and EPA Omega 3 fatty acids. Offered in 64-ounce cartons, Family First milk is available in both Whole and 2% Reduced fat varieties.

Fortified milks are also making news in the plant-based segment where Los Angeles-based Califia Farms recently introduced a product made with pea, chickpea and fava bean proteins that’s nutritionally comparable to dairy milk but contains 50% less sugar — one of consumers’ biggest concerns. Califia Farms Complete contains the same amount or more of nine essential nutrients found in dairy milk and all nine essential amino acids, says the company. Plus it’s free of nine major allergens.

Hoping to “normalize” the lactose-free segment, Prairie Farms introduces what it believes are the first lactose-free gallons.

In addition to functional benefits and reduced sugar, more consumers are interested in products that are “easier on the digestive system,” says MilkPEP’s Taylor. While companies such as Alexandre Farms, Crescent City, Calif., offer A2/A2 milk free of the A1 beta casein that’s hard for some to digest, other suppliers are doubling down on lactose-free milk (which actually includes lactase that breaks down the lactose).

For example, Edwardsville, Ill.-based Prairie Farms Dairy just rolled out what it believes are the first lactose-free gallons — a move it hopes will help “normalize” the lactose-free category. “We’re addressing the affordability and accessibility of fresh lactose-free milk by offering a family-size gallon,” which contains 33% more milk than the 96-ounce option offered by the leading national brand, says CEO/EVP Matt McClelland.

PLANT-BASED DOWN 8.1%

Although plant-based milk sales tumbled 8.1% to $555.24 million during the 12 weeks ended March 24, likely due at least in part to their higher cost, manufacturers continue to introduce tempting new options. Among the newest: Sacramento, Calif.-based Blue Diamond’s Almond Breeze Almond & Oat Blend (with 30% less sugar and 50% fewer calories than the average original oatmilk and 50% more calcium than dairy milk); Malmo, Sweden-based Oatly’s Super Basic Oatmilk (made with just four ingredients) and Unsweetened Oatmilk (with 0 grams of sugar); and Chicago-based Truly Grass Fed’s Truly Gluten Free Premium Irish Oat Milk (made with premium Irish oats), available in both fortified Original and four-ingredient Extra Creamy.

Despite a dizzying array of choices and widespread interest, research by ofi (olam food ingredients) reveals that more than one-third of consumers still haven’t found a plant-based dairy product that meets all of their needs. However, consumers who care about animal welfare and the environment but just don’t like the taste or nutritional profile of plant-based alternatives now have another option: dairy-free dairy. Made from milk protein created through fermentation, not from cows, “It looks, tastes, cooks, bakes, froths and steams just like conventional dairy,” says Ben Berman, founder and CEO of New York-based Tomorrow Farms, maker of the Bored Cow brand. “Like the milk you grew up with, it has 8 grams of complete protein per cup and is an excellent source of calcium and vitamin D. But unlike the milk you grew up with, it is 100% lactose-free, cholesterol-free and cruelty-free. It also has a fraction of the climate footprint.”

Bored Cow adds Original and Chocolate four-packs to its lineup, described as “real dairy but without the cow.”

Bored Cow launched in 2022 with three 11-ounce flavors: Chocolate, Vanilla and Strawberry. Along with an updated recipe featuring real cane sugar, a fourth variety, Original, debuted last spring, says Berman. This month, the company is introducing four-packs of both Original and Chocolate. And this fall, it will roll out a Pumpkin Spice flavor.

CROSS-MERCHANDISING SELLS

To keep the dairy milk momentum going, Taylor suggests merchandising strategies that bundle traditional white milk with other types of milk or other dairy products. “We know heavy milk households buy more than one type of milk, that flavored milk [purchases are] impulsive and incremental, and that milk shoppers are more likely to also consume items like cheese and cultured products,” she explains.

“When promoting during inflationary times,” Taylor adds, “we see that buy-and-save constructs outperform bundled face-value price offers.”

What about space allocation? Taylor suggests retailers look at growth CAGRs rather than past data “to keep from having to play catch up year over year.”

Schams at Organic Valley also recommends evaluating how many new sales each brand or product can generate. “While larger brands might occupy the most shelf space, they don’t always contribute to new sales growth,” he says. “Instead, they might simply take sales away from other products.” He adds, “This concept of incrementality is crucial for retailers looking to increase their overall milk sales.”