US dairy producers unpack health benefits to woo Gen Z

Credit: ZikG / Shutterstock

The US dairy industry is turning to what it says are the innate health and nutritional benefits of cows’ milk-based products to capture the spending power of Gen Z and drive growth in what is a large and mature market. 

Sarah Bauman, farmer communications manager for Dairy Max, a Texas-based non-profit dairy council representing more than 900 dairy producers across eight US states, argues US dairy producers should safeguard their future by engaging with Gen Z, those born between 1997 and 2012. 

The cohort, she says, “makes up over 20% of the US population, representing more than 68 million people, adding: “Their buying power is staggering – estimated at $360bn annually.” 

Dairy manufacturers and brand owners are tying their product claims to a renewed interest in ‘natural’ unprocessed foods among the US population, a preoccupation that, for example, has boosted sales of unpasteurised or ‘raw’ milk. Brands have tapped social media-based marketing methods to reach younger audiences. Land O’Lakes, the agri-food giant that sells products including cheese, butter and cream, has set up a TikTok account exclusively for sharing recipes for dishes made using its products. 

The consumer interest in looking for more ‘natural’ products has prompted yogurt major Chobani to unveil a new line of attractively packaged high protein Greek yogurt cups and drinks “made with only natural ingredients, real fruit, and 0g added sugar”. 

The Chobani High Protein range “deliver an affordable, tasty solution with dynamic flavours and a variety of formats and protein levels, all made with only natural ingredients”, Chobani chief innovation officer Niel Sandfort says. 

“The desire for high protein, lower sugar offerings has moved beyond the hardcore fitness community and made its way to the mainstream consumer. This is a good thing. Underneath the desire for more functional food is a shift in mindset where strength and positive nutrition, namely protein, is taking the place of calorie deprivation and cardio.”

According to GlobalData, Just Food’s parent, the value of the overall US dairy market at retail was estimated to be worth $92.7bn in 2024, up 4% year-on-year, though, of course, a factor in that growth was inflation.  

GlobalData’s analysis shows cheese is the US dairy sector’s dominant segment, contributing 43% of total retail sales—equivalent to $39.9bn, with a five-year compound annual growth rate (CAGR) of 4.7%.  

Milk follows as the second-largest segment, accounting for 30% of total sales at $27.7bn, though its five-year CAGR is a more modest 1.8%. “One of the strongest performers in the dairy sector is drinkable yogurt, which continues to see growth exceeding 5%,” Aayush Sharma, a project manager within GlobalData’s consumer industry practice, notes.   

According to data from market research and technology firm Circana, US consumption of whole milk rose by 3.2% in 2024 – only the second increase since the 1970s – while consumption of plant milk fell 5.9% year-on-year 

Circana says it tracks sales of 15 categories of dairy products. It found sales of dairy milk overall were up 1.9% in 2024, while sales of raw milk jumped by 17.6%.   

John Crawford, senior vice president for client insights for dairy at Circana tells Just Food producers and retailers may struggle to persuade younger consumers to buy fluid milk but their efforts are not wasted because these consumers may become more dairy-friendly as they age.  

“All dairy categories, including milk, have [over the past few years] seen big gains in dollars across Millennials and Gen Z. A good portion of that growth is driven by life-stage changes. Entering the workforce, living on their own and having a family are the life-stage changes younger consumers are experiencing that impacts their purchase behaviour,” he says.  

To illustrate this point, Crawford notes that, while all dairy categories Circana tracks sell below the average retail quantities for these products to Gen Z consumers, milk, yoghurt, natural cheese, whipped toppings and sour cream all sell above average quantities to the older, Millennial consumers. 

Rizwan Asad, the Canada-based founder of the food and recipes blog Chocolates & Chai, says the US dairy market has had to play catch up with agile and innovative branding of dairy alternatives, such as nut and plant-based milks. 

Asad, a former PepsiCo executive, tells Just Food that compared to many dairy alternatives, animal-based dairy products have historically been marketed relatively conservatively. “[Gen Z] care about sustainability, ethics, gut health and branding that actually speaks to them. Younger consumers don’t just want a product. They want a story. They want to know how their food is made, who made it, and whether it aligns with their values. Dairy, in its traditional form, doesn’t always check those boxes,” he explains.  

Without a positive story, other narratives such as those put forward by pressure groups such as Washington DC-based Animal Outlook, which has published footage and information suggesting cruel practices in the US dairy industry, can fill the vacuum. “This is why so many are reaching for oat, almond and even potato milk instead,” Asad says. 

One reason the dairy industry has struggled to respond to this marketing challenge, Asad believes, is because it enjoyed many decades without real competition and so lacked promotional experience. “Earlier generations had no choice but to consume milk. Without hesitation, you mixed it with cereal and drank it with cookies,” he says.  

Traditional dairy, he argues, has also relied on legacy branding that promoted images of wholesome family farms, benefited from school milk programmes, and the non-specific idea that milk is essential. “But Gen Z doesn’t respond to that kind of messaging the way previous generations did,” Asad explains. “They’re not watching TV commercials. They’re on TikTok, where a well-placed viral video can turn an unknown oat milk brand into a household name overnight,” he adds. 

Circana’s Crawford thinks the US dairy industry has woken up to the competitive challenge mounted by dairy alternatives and, judging by 2024’s sales figures, is beating them at their own game.  

“[Dairy] brands are winning with younger generations by providing or highlighting product benefits, like calcium, protein, pre/probiotics, lactose free and animal welfare. They are also meeting younger generations where they are by effectively using social media – in particular TikTok – to communicate and attempt to go viral,” he says. 

Some brands have done a particularly good job of capturing the attention of America’s Gen Z through savvy marketing. Crawford points to Land O’Lakes, Chobani and sour-cream and cottage-cheese maker Daisy Brand, which all variously use social media, push health-conscious product messages and use eye-catching packaging to market to younger consumers. All these brands are seeing strong US dollar revenue growth across their dairy product ranges with both Gen Z and Millennials, according to Circana’s analysis. 

A case study in US dairy combining health claims with modern marketing methods to win over Gen Z is cottage cheese. Posts by well-known influencers on the Gen Z-favoured TikTok touting the benefits of cottage cheese went viral. 

Cottage cheese promoters included Melissa Ben-Ishay, CEO and co-founder of Baked by Melissa, a cupcake company headquartered in New York City, which has a TikTok account that now has 2.5 million TikTok followers.  

According to Crawford, a key to how her social-media campaigns attracted Gen Z was suggesting new, appealing ways to use cottage cheese as opposed to a simple bagel topping – from lasagne and pizza to smoothies and ice cream. “Since that viral campaign, cottage cheese has witnessed double-digit growth each quarter since Q2 2023,” Crawford notes.

Catherine Bayard, global product manager at Givaudan, the food-ingredients giant, says health benefits are key for American Gen Z consumers. 

“Today’s consumers are increasingly health conscious. Young shoppers, especially, are aware of the link between their diet and their overall health and wellbeing,” Bayard tells Just Food.  

She points to Givaudan research that found rises in allergies and lactose intolerance have pushed plant-based product sales, especially among the young. Figures from the US National Institutes of Health (NIH) suggest this especially important in the USA, where around 36% of people have lactose malabsorption. 

Asad says one of the US dairy industry’s answers has been A2 milk, a variety strong in A2 form of β-casein proteins - easier to digest than the A1 β-casein proteins found in regular cow’s milk. For example, California-based Alexandre Family Farm has launched a A2 probiotic sour cream, with Gen Z-targeted posts on Instagram and Facebook. 

Of course, US brands chasing Gen Z sales must avoid alienating more established, older clientele.  

Bayard says: “Manufacturers need to develop and offer a broader range of plant-based dairy alternatives to complement the number of dairy offerings that are currently available [as well as] low or no-sugar alternatives [and] increasing protein levels. 

“Most consumers of dairy alternatives also have traditional dairy products in their fridge. This suggests that hybrid products that combine traditional dairy and dairy alternatives may also appeal to consumers.” 

And Crawford says some product claims cut across American age groups. “Protein, pre and probiotics, calcium and lactose-free have appeal to older and younger consumers.”