Top Trends Impacting Dairy Packaging

As with several categories, unit prices have impacted the U.S. dairy market. Retail value sales show stronger growth than volumes, and some categories show stark volume declines. This is true of milk, which is set to continue declining as it has for over a decade. While dairy is a mature category, there has been some innovation to appeal to price-conscious or disengaged consumers. Savory cottage cheese products, interesting kefir beverages, and new milk flavors are a few examples. Dairy brands can continue appealing to consumers by tapping into several key trends.

Natural

Today’s consumers are increasingly health-conscious and paying more attention to the food they eat and the beverages they drink. They read labels carefully, scrutinize ingredient lists, and pay close attention to nutritional claims. People want to consume better, leading to a growing desire for natural, unprocessed, and organic dairy products. This is impacting almost every dairy category. Processed cheeses are struggling, while appeal for premium-quality artisanal and soft cheeses is on the rise. Consumers are embracing full-fat milk, sour milk, and cream as they are less processed and, therefore, perceived as more natural and healthier. Traditional butter solidified its reputation as a superior product among wellness enthusiasts who lauded traditional butter as a natural, low ingredient count, minimally processed alternative to ultra-processed edible oils and spreads.

Given the consumer focus on ingredients, packaging plays a key role in demonstrating that a product is natural and less processed. Minimal brand design is often associated with premium or “clean” products with higher quality or fewer ingredients. A recent Journal of Marketing study of 1,300 packages in the largest supermarket chain in the U.S. found that “consumers often assume that simple packaging signals few ingredients, which enhances perceived product purity.” Being selective with front-of-pack imagery can maintain a minimal aesthetic that appeals to consumers. Focus on simple ingredient information, compelling health claims, and authentic certifications that have the most impact.

Functional Health Benefits

The health and wellness trend is impacting the dairy category, creating opportunities for dairy brands to innovate with health-positive ingredients and product positionings. According to Euromonitor, “Dairy manufacturers must recognize the diverse health benefits consumers seek from dairy products. This includes prioritizing probiotics and gut health, expanding kefir offerings, providing high-protein options, and addressing the needs of lactose-intolerant consumers. Additionally, there is increasing interest in dairy’s role in supporting mental health.” Growing consumer awareness of the gut-brain axis and its effects on mood, stress management, and mental clarity provides opportunities for dairy brands. Euromonitor estimates that brain health and memory dairy products and alternatives will show a CAGR of 4% between 2024-2029.

Products with added functionality are perceived as adding value and can justify a higher price point and appeal to budget-savvy consumers. High-quality packaging solutions – including custom structures and aesthetic brand design – can support a premium position.

Protein Power

The last few years have seen a continual rise in consumer demand for protein in food and drink choices, including dairy products and alternatives. Cottage cheese – once seen as a niche product – has significantly increased sales in part due to its high protein content. The category has undergone a transformation, with flavor innovation and new brand entrants. Greek yogurt is another category that continues to gain momentum as a healthy snack and cooking ingredient appreciated for being high in protein. The only dairy milk seeing volume growth is full-fat milk, where the fat binds more protein in the product. Euromonitor notes, “Protein serves not just as a macronutrient that is in demand, but also as a key factor in creating long-term satiety amongst consumers, which again leads US consumers to choose high protein products every time when faced with a choice.”

When it comes to packaging, clearly communicating protein content and associated health benefits can appeal to consumers looking for healthy, satiating food choices. Bold claims and visual differentiation from non-protein-rich products can help consumers find the product that most appeals to them.

Sustainability

Sustainability continues to be a priority for consumers, retailers, and government agencies, impacting the consumer packaged goods industry. According to Euromonitor, almost two-thirds of consumers globally try to positively impact the environment through their everyday actions because they are worried about climate change. Regarding the dairy industry, the high carbon footprint of dairy cow farming, along with ethical concerns around the inhumane treatment of animals and hormone administration, have drawn the attention of animal activists and everyday consumers. These concerns have created greater competition from dairy alternatives, including soy milk. Government regulations will also continue to reshape dairy farming practices as several states pass legislation to address animal welfare and sustainability.

According to a GlobalData survey, more than half of global consumers say they are always or often influenced by packaging claims touting that a product’s ingredients are sustainably sourced. In a joint analysis with Nielsen IQ, McKinsey found that yogurt and cheese products with ESG-related claims outperformed products without those claims. Overt on-pack communication about sustainable farming, ethical practices, and environmentally friendly packaging can appeal to eco-conscious consumers. Sustainable packaging solutions include using post-consumer recycled content, bio-resins, biodegradable or compostable materials, or refill and reuse systems.

Contributor: Moira Stein, Insights & Strategy at Berlin Packaging

Bio: Moira has spent 20+ years working in brand marketing, with a focus on strategy and design. For the past five years, she has helped Berlin Packaging’s customers leverage consumer and category insights to develop strategic package design solutions that create impact and drive sales. Moira has experience across a variety of sectors, including food & beverage, personal care, and home care. Her clients have included large CPG companies like SC Johnson, Kraft, and ConAgra Foods, as well as small distilleries, wineries, and start-ups.