Evolving consumer expectations for health-forward, sustainable, and sensory-rich dairy products are pushing innovators to use R&D, digital tools, and AI for product development and operational efficiency. Hybrid dairy formats are emerging, as are nutritious yogurts and environmentally responsible formulations that balance taste, functionality, and traceability.

Strategies for sugar and fat reduction are ever important, along with demands for protein-rich ingredients for healthy indulgence.

Food Ingredients First speaks with Hydrosol, Valio, ADM, and Ingredion to unwrap the latest trends shaping the future of dairy, from high-protein and hybrid innovations to the transformative role of digital tools and precision fermentation.

Emmi Martikainen, head of product development at Valio R&D, observes various global trends shaping dairy innovation.

“One of the most prominent is the rising demand for lactose-free products across multiple markets, driven by increasing consumer awareness of digestive wellness,” she tells us.

“Additionally, the high-protein trend continues to be strong. Consumers are increasingly aware of the importance of protein as part of a healthy diet, and they are looking for products that provide high-quality proteins.”

Proteins in demand

Protein-rich claims dominated dairy launches from April 2020 to March 2025 at 14%, followed by gluten-free (13%) and no additives/preservatives (10%), indicates Innova Market Insights data.

Bastian Hörmann, global marketing director, Sweet Goods, Dairy & Specialized Nutrition at ADM tells us that while whey and casein proteins play an important role, incorporating an array of protein sources can provide even greater protein fortification and diversity.

“ADM research finds that 86% of consumers agree that it’s healthier to get protein from a wide variety of sources. Gaining traction now are hybrid/blended protein beverages, combining traditional dairy proteins with plant-based sources like soy or pea.”

He describes soy as an “excellent addition to blended dairy applications” for increasing protein content since it is a complete protein with a Protein Digestibility Corrected Amino Acid Score of 1. 

“Plus, research suggests fortified plant soy milk may be the most suitable plant-based alternative to traditional milk in terms of nutritional value.”

However, protein enrichment is no longer limited only to protein content but stretches across the “quality of the protein, bioavailability and absorption into the body,” says Dr. Katharina Burdorf, team lead product management at Hydrosol.

“In line with these requirements, we have developed a stabilization system for the production of milk-based meal replacement drinks. In addition to the high protein content from high-quality dairy protein, the system also contains fiber for the satiety effect, and the product is enriched with essential vitamins and minerals.” 

Tapping consumer curiosity

Burdorf continues that consumers have become much more willing to experiment in recent years, which Hydrosol responds to with its solutions such as meal replacement drinks or best ager concepts. These concepts tap into the current trend of “precision wellness,” with products tailored to a person’s stage of life, lifestyle, physical or mental health needs, or even gender.

“Three of them focus on maintaining normal bones and muscle function, one product contributes to the normal functioning of the immune system, and another supports the heart function.”

“Dairies can use them to produce pudding, yogurt mousse, cocoa drinks, or whey-kefir drinks, for example, which offer additional health benefits for the target group.”

Meanwhile, Hörmann observes younger consumers seeking convenience, enjoyment, functionality, and healthy indulgence. 

“We see an explosion of drinkable yogurts, along with other dairy formats like protein shakes and frozen bites, featuring familiar flavors like vanilla bean, sun-ripened strawberry, or the sweet brown notes of cinnamon, honey, and caramel.”

“Favorite citrus fruits like orange combined with cream are on the rise, while exotic combinations, such as passionfruit and coconut, add an adventurous twist,” he continues.

Untapped domains

While flavor often takes center stage, Louisa Parrillo, Dairy Texture & Healthful Solutions marketing manager for EMEA at Ingredion, highlights textural innovation in plant-based dairy as having “untapped potential.”

“Some 79% of consumers believe texture determines overall satisfaction, and if dissatisfied, more than 70% would consider switching brands, according to our recent proprietary texture consumer research across 11 countries.”

Additionally, incremental reformulation — small, strategic changes that improve nutrition without sacrificing taste is another opportunity area. 

“With 77% of consumers willing to pay more for F&B that offers health benefits, it is increasingly important to formulate food to have more nutritional value. This includes sugar reduction, fat replacement, and fiber and protein enrichment, all of which can be achieved using Ingredion’s broad ingredient portfolio,” Parrillo adds.

Meanwhile, Hydrosol is targeting dairy protein texture by leveraging precision fermentation. Burdorf says that the method can deliver properties like heat stability, emulsification, foaming, or gelation “more effectively than many conventional alternatives,” resulting in improved texture and mouthfeel.

Tackling “cautious consumption”

Burdorf notes that beyond flavor and texture, consumers’ “cautious consumption” continues to be a major challenge for dairy innovators.

“More and more food manufacturers are focusing on cost-optimized solutions that offer high product quality and a special taste experience. One example is cream. Manufacturers worldwide are showing great interest in bringing vegetable fat cream onto the market.”

“We have therefore developed a stabilizing system for the production of mixed fat cream. This makes it possible to produce an end product with high stability from vegetable and milk fat — normally a technological challenge.”

For Hörmann, the top barriers consumers cite for using dairy alternatives include “unappealing taste, texture, and cost.” Protein functionality and shelf life stability can also pose hurdles to product innovation.

To address these concerns, he suggests manufacturers consider “blended options that combine traditional dairy proteins with plant proteins.” 

Meanwhile, Martikainen notes many operators struggle with sustainability and traceability, seeking ways to cut greenhouse gas emissions.

“Valio’s ambitious goal is to cut the carbon footprint of milk to zero by 2035. Valio Carbo partnership program offers our customers solutions for reducing food chain greenhouse gas emissions.”

Emergence of AI

ADM’s Hörmann believes advanced technologies are crucial in shaping what’s next in food, including dairy products. This includes AI tools streamlining microbial strain identification for better application use and personalization.

“When used alongside the expertise of our flavorists, AI can help create unique and appealing sensory experiences.”

Valio’s Martikainen agrees that digitalization and AI are needed throughout the dairy value chain. This is related to the “traceability of primary production, sustainability work and the development of new products and technologies.”

Valio’s Food 2.0 project utilizes AI and cellular agriculture with the goal of a €100 million (US$114 million) investment in RDI activities to make the food system more sustainable.

Ingredion also taps AI-driven formulation tools to accelerate product development and optimize ingredient interactions. “These tools help us simulate sensory outcomes, reduce development cycles and improve formulation accuracy,” Parrillo tells us.

Future outlook

Looking ahead, Hydrosol’s Burdorf expects advancements in precision-fermented fats and other complex dairy components.

“Combined with advances in areas like AI-driven strain optimization, precision fermentation could play a major role in shaping the future of dairy innovation.”

Meanwhile, ADM’s Hörmann foresees expanded product development championing convenience and functionality. “Nearly 40% of global plant-forward consumers want to see enhanced health benefits from future plant-based food and beverage options.”

For Parrillo, the future of dairy will be defined by “personalized nutrition, planet-friendly production, and cross-category innovation.”

“Expect to see hybrid dairy-plant products that combine the best of both worlds and functional dairy with targeted health benefits. In addition, digitally optimized formulations will allow exploration of innovative ideas and reduce time-to-market,” she concludes.