A key indicator of this optimism is the industry’s willingness to invest in its future. A McKinsey & Co. survey revealed that nearly two-thirds of dairy executives plan to increase investments in product innovation over the next five years. This forward-looking approach is even more pronounced in manufacturing, where 79% of executives plan to boost their spending on innovation, with a focus on areas like packaging for extended shelf life and new technologies like artificial intelligence to improve operational resilience and efficiency.

The survey findings paint a clear picture of an industry confident in its trajectory. A resounding 70% of dairy executives are optimistic about the future, with one leader noting a “resurgence in demand for consumer dairy.” This positive sentiment is backed by ambitious growth projections, as nearly 80% of those surveyed expect volume growth of more than 3% over the next three years. This optimism is fueled by the belief that dairy is perfectly positioned to appeal to consumers seeking less-processed foods with functional benefits.

However, this positive outlook is tempered by significant challenges, or “headwinds,” that keep executives focused on core business priorities. The top concern for executives in 2024 is rising costs, which was cited by 69% of respondents, a major jump from previous years. This increase reflects growing anxieties about volatility, rising inflation, and high costs for raw materials and logistics. The industry is also feeling pressure on talent, with 67% of respondents identifying it as a top priority, a lingering effect of the COVID-19 pandemic.