The dairy ingredients space is constantly evolving as new technologies, evolving consumer tastes and processing innovations shape how manufacturers operate. Dairy Foods’ State of the Industry report on ingredients takes a close look at these trends and what they mean for companies across the dairy sector.

Let’s start with the big buzzword: protein. For dairy products with added protein, texture is a major concern. Cargill Food Scientist Allie Schneider notes that stabilizers are critical in the protein fortification process. "Gums, starches and functional systems can smooth out mouthfeel and create a more indulgent sensory experience — an essential step for winning repeat purchases,” she adds.

Barbara Lezzer, marketing director for ingredients supplier Kerry Group, notes “Three universal consumer preferences are shaping the future of dairy: taste, nutrition, and texture.” Taste and mouthfeel, though, are what drive repeat purchases. Lezzer adds that, even in clean-label formats, “dairy products must deliver the rich, creamy experience that consumers know and love.”

There is not a single, clear-cut definition for clean-label products. Lezzer says definitions for the term vary by region and product type. "Across the board, we see sustained demand for natural flavors, shorter ingredient lists, and a move away from artificial sweeteners toward natural alternatives,” Lezzer adds. “Clean label today isn’t just about removing ingredients; it’s about formulating with purpose and transparency.”

Schneider says that clean-label demands are changing not just ingredients, but processing methods. “For example, some dairy processors are turning to techniques like filtration to minimize the need for stabilizers, aligning with consumer demand for simpler labels.”

Still, Schneider notes that brands must carefully balance functionality and simplicity, keeping taste front of mind throughout production. “Consumers may say they want clean-label products, but there’s a point where you can go too far,” she adds. “This is where fibers and flours shine. They tend to score well with consumers and deliver great functional benefits.”

Nutrition

GLP-1 medications are a widely discussed phenomenon, and for good reason; according to a study from FAIR Health, the use of GLP-1 drugs to treat overweight patients or obesity increased 587% when comparing 2019 to 2024.

Kyle Krause, regional product manager for Functional Fibers and Carbohydrates, North America, at BENEO, says that these medications are creating a major opportunity for dairy manufacturers. He notes that patient-focused nutritional guidance is key for patient health outcomes. "This presents not only a health-related need but also a market potential for the formulation of products that meet these specific requirements," Krause adds.

Ingredient suppliers are helping dairy processors increase nutritional value through prebiotic fibers. Krause notes that a growing number of yogurt, ice cream and other dairy innovations are being formulated with chicory root fiber, which supports digestive wellness while enhancing creaminess. Prebiotic chicory root fibers align with overall gut health trends while supporting sugar reduction.

Digestive health is becoming a key component of overall health and wellness, Krause says. He notes that dairy products like yogurt or kefir are popular products to support gut health.

Krause adds that, according to a 2024 Innova Trends Survey, protein and fiber are top priorities for consumers. "With regards to product innovation, BENEO sees a huge development toward better-for-you products offering multiple functional benefits."

Lezzer says that consumers are interacting with the dairy category in new ways, fueled by changing nutritional concerns and lifestyle changes. A top nutritional concern for many consumers today is sugar content. Lezzer emphasizes that "Nearly 80% of consumers believe products with reduced sugar are healthier, and more than half say sugar content influences their purchasing decisions.".

Looking forward

Fat content concerns have plagued dairy in years past, but now the industry is seeing a reversal. Cargill's Allison Leibovich, marketing manager for dairy and dairy alternatives, notes that the company's FATitudes research shows concerns about fat have steadily declined during the last 13 years, driven by younger generations. “Instead, the nutritional spotlight has shifted: consumers are much more focused on sugar and protein than on fat content,” Leibovich says. "That shift is shaping dairy launches, with more products intentionally formulated with higher fat levels than we would have historically seen."

Kerry anticipates the next wave of dairy innovation to be defined by blurred category boundaries. “One of the movements driving this shift is what Kerry calls ‘Category Crashers.’ This trend celebrates the rise of hybrid products that defy convention,” Lesser says. “In dairy, this could mean unexpected pairings and cross-category formats that merge indulgence, nutrition, and convenience.” Lesser reminds processors that consumers want better-for-you dairy products with strong nutritional claims, but they still crave a satisfying eating experience.

Leibovich sees a similar future for the dairy industry; she emphasizes that the dairy landscape has become very dynamic. “From breeding cows for A2 milk to new processing techniques, there’s a lot of experimentation underway.” She anticipates continued advances in processing technology, such as new dairy applications for ultra-filtration technologies.

ADPI Global Ingredients Summit can utilize these insights to better understand market trends and make informed decisions in dairy ingredient production.

Learn more about the Global Ingredients Summit and ADPI at adpi.org.

To learn more about Dairy Foods’ ongoing coverage of ingredients, emerging technologies and membrane filtration, visit dairyfoods.com.