GUEST COLUMNIST – Veronique Lagrange
Coffee: A growth driver for milk
This article explores how coffee—from café lattes to ready-to-drink formats and innovative creamers—has become a powerful growth engine for the dairy industry, driving significant milk demand through taste, functionality, and evolving consumer preferences.
Few beverages rival the global reach and cultural significance of coffee. More than 2.25 billion cups are consumed worldwide each day, making it the most popular drink after water. In the United States, coffee is deeply ingrained in daily routines. According to the National Coffee Association and the Specialty Coffee Association, it’s estimated that currentlytwo-thirds of American adults drink coffee daily, averaging about three cups per person. Collectively, that equates to an astounding 517 million cups consumed every day.
What matters most to the dairy industry is not just how much coffee Americans drink, but how they drink it. Fewer than one in five consumers take their coffee black. Instead, roughly 80% of U.S. coffee drinkers add milk, half-and-half, or creamers—either alone or alongside sweeteners. Even assuming a conservative addition of 10% milk per cup (far less than the 60–80% milk content found in lattes and cappuccinos), coffee beverages account for an estimated 16 billion pounds of milk and creamers annually. This represents as much as 7–10% of total U.S. milk production—a substantial share that underscores coffee’s critical role in sustaining dairy demand.
The Rebound of Real Dairy in Coffee
In recent years, the rise of plant-based alternatives presented challenges to dairy’s share in coffee. Millennials, in particular, were early adopters of almond, oat, and soy “milks,” often citing lactose intolerance or wellness trends. However, the momentum is shifting.
Research from Chapman University in Orange, Calif., shows that when consumers taste blindly, lactose-free milk significantly outperforms plant-based alternatives in terms of preference. Participants consistently highlighted the natural sweetness, creaminess, and balanced flavor that lactose-free dairy brings to coffee—qualities that plant-based beverages struggle to replicate without added sugars or stabilizers.
This preference dovetails with broader consumer concerns about simplicity and authenticity. Many plant-based options are perceived as “ultra-processed” due to long ingredient lists and heavy use of stabilizers. By contrast, real milk—including lactose-free formulations—delivers clean labels, familiar nutrition, and excellent taste performance.
The economics are also clear. For foodservice operators, offering lactose-free dairy often costs less than stocking multiple plant-based alternatives. With several major coffee chains now removing premiums for non-dairy add-ins, the case for cost-effective, high-quality dairy becomes even stronger. For processors, this represents a renewed growth channel; for farmers, it reinforces steady demand for fluid milk.
Ready-to-Drink Coffee: Milk in a Can
One of the most dynamic developments for dairy has been the rapid expansion of ready-to-drink (RTD) coffee. Even though popular for many years in Asia, canned and bottled coffees were somewhat new to the U.S. market, but are now firmly established, offering consumers a portable, indulgent, and convenient way to enjoy café-style beverages.
As of 2024–2025, U.S. RTD coffee sales are valued between $5.6 and $6.6 billion, with forecasts projecting growth to $7–9 billion by decade’s end. Cans dominate packaging, capturing 45–46% of revenue, driven by their portability, shelf stability, and recyclability. The overall production scale is significant, with $5.4 billion in RTD canned and bottled output projected for 2025.
The drivers behind this growth are powerful:
- A grab-and-go culture that demands convenience.
- Younger consumers who prefer cold, flavored coffee over traditional brewed formats.
- The surge of cold brew and innovative hybrids that showcase coffee as a premium, lifestyle-driven product.
For dairy, RTD coffee represents more than a packaging shift—it is a platform for innovation. Because RTD beverages fall outside traditional standards of identity, processors can explore value-added formulations using cream, ultrafiltered milk, condensed milk, and functional dairy proteins. This flexibility opens opportunities to capture market share with premium positioning and nutritional differentiation.
Creamers: From Commodity to Innovation Hub
While milk is central, coffee creamers deserve their own spotlight. Once dominated by powdered blends of sugar, vegetable oils, and imported caseinates, the category has transformed into a vibrant segment fueled by dairy-driven innovation.
Recent surveys show that among specialty coffee drinkers, 57% add whiteners to their beverages, with milk, half-and-half, and liquid creamers ranking as the most common choices. The U.S. creamer market itself is valued between $1 and $5 billion (depending on definitions used), with forecasts pointing to 5–8% annual growth through the late 2020s.
Today’s creamers highlight domestically produced micellar casein, for example, and other dairy proteins, supporting U.S. farmers while delivering superior taste and performance. New formulations emphasize:
- Clean labels with simple, recognizable ingredients.
- Lactose-free options that broaden consumer access.
- Flavor variety, from indulgent seasonal releases to functional blends.
- Extended shelf life, ensuring convenience without sacrificing quality.
From a value perspective, creamers are a premium proposition. A recent California Milk Advisory Board/California Dairy Innovation Center analysis shows that many dairy-based creamers command higher margins than traditional half-and-half while remaining price-competitive with many plant-based alternatives. This positions them as both a value-added outlet for processors and a reliable demand driver for milk solids.
Functional Dairy: Adding More Than Flavor
Coffee is also becoming a platform for health and wellness innovation, reflecting broader beverage trends. In 2025, surveys indicate that:
- 38% of consumers seek added protein in their beverages.
- 41% look for added vitamins.
- 30% show interest in collagen fortification.
This creates a natural opening for dairy ingredients. Using ultrafiltered milk in creamers or RTD coffees allows processors to fortify products with high-quality proteins while maintaining taste and texture. The addition of collagen, soluble fiber, or nootropics builds functionality into coffee beverages, further expanding appeal to health-conscious consumers. For dairy farmers, this represents an opportunity to link milk production and benefits with the booming functional beverage space, diversifying demand beyond traditional consumption channels.
Why Coffee Matters for Dairy
When viewed collectively, the numbers tell a compelling story. Coffee—whether brewed at home, served in cafés, or purchased in a can from a convenience store—has become a critical growth engine for dairy. At least 7–10% of U.S. milk production flows through coffee beverages, a share that is likely to rise as lactose-free options gain ground and RTD formats expand. Creamers add another layer of demand, providing premium outlets for proteins and milk solids.
For processors, coffee represents an innovation playground free from many regulatory constraints, where dairy can compete not only on taste but also on value, nutrition, and functionality. For farmers, it represents a stable, growing market that directly connects milk production with a high-frequency, high-value consumer habit.
Conclusion
Coffee may be centuries old, but in today’s marketplace it is driving modern growth opportunities for dairy. From the latte in a café to the creamer on a supermarket shelf, and from canned cold brew at a gas station to functional protein-fortified blends, coffee beverages consistently demonstrate how milk adds value.
As consumer preferences continue to evolve, dairy’s unique advantages—taste, nutrition, clean labels, and affordability—position it as the partner of choice in this expanding sector. For both processors and farmers, coffee is more than just a complementary category; it is a strategic market where dairy can lead, innovate, and thrive.
Written exclusively for Cheese Market News. Copyright 2025 Quarne Publishing LLC.
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