For the nation’s leading butter brand, consumer demand for all things health-and-wellness has been an unexpected boon for business.
Never mind federal dietary guidelines, consumers are all in on flavor, price and simple ingredients, driving the change in habits.
“There’s certainly been a trend toward more wholesome, natural foods: I can understand the ingredient label, I can pronounce the items on that ingredient label,” said Heather Anfang, president of dairy foods at Land O’Lakes. “And so when you look at butter, I mean, the ingredients are cream and salt.”
Even as Americans drink less milk year after year, demand for dairy is growing — mostly in churned and fermented form.
At the same time, Americans are still urged to consume less saturated fat, and many say in surveys they are limiting butter and cheese to do so. Still, taste and price remain the main reasons shoppers buy any kind of food, much as the FDA would like to see cooking oils replace butter as a fat source.
Anfang said an intersection of trends is driving butter’s place in the kitchen.
An increase in home baking and cooking helped pad butter’s reputation for taste during the pandemic. Margarine is no longer widely embraced as a healthier alternative. And unlike most food categories, dairy prices have fallen after peaking during rapid inflation in 2022.
Anfang said one other element gives dairy a health-and-wellness edge — knowing where it came from.
“We’re here to protect and grow the farmer and allow them to live the lifestyle that they want and keep that generational operation in their family,” she said. “When we talk to consumers, they say, ‘I want to support that.’”
Milk
Last year fluid milk again dropped to its lowest rate of consumption on record, about 15 gallons per person. It’s not just plant-based alternatives driving that figure down for several decades in a row; an overall beverage boom has edged out milk in favor of Gatorade, energy drinks, sodas, coffees and even bottled water.
“So many other beverages have pushed it to the back of the fridge,” said Rachel Kyllo, chief marketing officer of Dairy Farmers of America, a cooperative that includes brands like Kemps and Cass-Clay Creamery. “Our goal is to put milk into modern culture in as many ways as possible.”
She said that early 2024 numbers appear promising, with volumes coming in on par with last year for the first time since 2009. Kyllo points to the consumer trend toward simple ingredients and “returning to things perceived to be real, not processed, farm-to-table.”
The success of Fairlife and other ultrafiltered milk brands have been a bright spot, capturing consumer taste for higher protein and lower sugar.
“The innovation in the category has been really helpful,” Kyllo said. “That gives us great optimism about the future.”
Cheese
A great deal of U.S. cheese consumption comes from mozzarella on pizza, but that can’t fully explain the continuous growth.
“It is a category that seems to be recession-proof,” said Andrew Cannon, associate marketing director at Edina-based Crystal Farms. “People are always going to buy cheese for their meals and for snacking. And that’s one of the areas where we see growth: snacking.”
Crystal Farms has seen more customers switch from bags of shredded cheese to blocks they can shred or munch on at home.
The company is still keen to win more sliced and shredded consumers, and has new flavors like Carolina reaper and zesty ranch in store for next year.
“Innovation is more important than ever for a brand like Crystal Farms,” Cannon said. “We’re really focusing on making sure we’re bringing compelling, high-quality, relevant products that will capture those consumer trends of looking for intense flavors, snacking and convenience.”
Land O’Lakes has been upping its cheese game, returning to deli cases at grocery stores. (The co-op also supplies the powdered cheese for Cheetos.)
“It’s important we provide healthy outlets for farmers and good growth,” said Anfang, the cooperative’s dairy foods president. “Cheese is a big one.”
Tom Schulz looks over dairy products at Lunds & Byerlys in Edina on Monday. (Ayrton Breckenridge/The Minnesota Star Tribune)
Whey
Combining milk, butter, cheese, ice cream, yogurt and other products, per-capita dairy consumption in the U.S. tied a 50-year high last year at 661 pounds per person on a milk fat basis.
A small but fast-growing part of that consumption is in whey protein, the essential ingredient in many nutrition shakes and workout mixes. Minnesota companies have played a key role in growing that market.
Davisco, now owned by Agropur, pioneered the use of whey protein as an ingredient in the U.S. and grew to be a leading supplier.
Eden Prairie-based Actus Nutrition, formerly known as Milk Specialties Global, has $1.5 billion in revenue selling whey protein concentrates and other milk-derived ingredients.
And Eden Prairie-headquartered SunOpta spent $125 million on a new factory in Texas to produce Premier Protein shakes with whey protein.
“The market for dairy-based protein ingredients continues to grow,” Kyllo said, and that can help bring more consumers back to milk. “When we think about dairy and the bright spots it’s cheese and butter, but it’s a big moment for milk today.”
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