Key Takeaways
- Consumer demand for dairy products with health benefits is fueling industry growth and prompting major investments in new and expanded processing plants.
- Key players like Chobani and Danone are making significant capital investments, signaling strong confidence in the dairy market’s future.
- Cost control and workforce recruitment are top priorities, with innovative labor strategies being adopted to address talent shortages.
Whether consumers seek a protein boost, digestive health or overall wellness, many of the trends today point to dairy products as solutions for their demands. And dairy processors are responding in turn, looking for ways to grow and capitalize on the popularity of the products they manufacture.
According to McKinsey & Co.’s 2025 U.S. dairy survey — completed in conjunction with the International Dairy Foods Association (IDFA) and released earlier this year — dairy processing executives were optimistic heading into the year.
“70% of the folks were very optimistic, because finally, the real attributes of dairy are getting through [to consumers],” says Ludovic Meihlac, partner at McKinsey. “So processors were just very confident this year, and because of that confidence, they invested.”
Innova Market Insights also saw consumers recognizing and rewarding dairy products for their gut health, bone strength and overall wellness attributes in its “Top Trends 2025: Dairy & Dairy Alternatives – Global” report, which was released in March 2025.
McKinsey is just beginning to collect data for its 2026 outlook now, but the headlines over the past year paint a picture that supports the 2025 signs of optimism, as well as its continuation through the calendar year.
Kroger (a $77 million investment), Hilmar Cheese Co. ($600 million), Darigold ($1 billion), Tillamook County Creamery Assn. (more than $60 million) and Danone U.S. ($65 million) each opened expansions of dairy plants or entirely new plants, while Sargento (cost not disclosed), Danone (another project in Minster, Ohio, cost undisclosed) and Ninth Avenue Foods ($200 million) announced plans to build or expand dairy processing plants to address growing demand.
Chobani also announced major plans in the past year — and stood out a bit from the crowd due to the size and “frequency” of the announcements. In March, Chobani announced a $500 million investment in a new Twin Falls, Idaho, plant — then topped its own all-time highest capital spend by announcing a $1.2 billion project in Rome, N.Y., only one month later.
“I would say the investments this year are moving according to the plan on the processing side,” Meilhac says. “There’s a lot of investment in the cheese side, but you also have investment in the U.S. fluid milk side and in cultured with yogurt and cottage cheese — logical investment where demand is growing.”
Cost, workforce are still concerns
Heading into the year, controlling costs and recruiting labor were top concerns in the McKinsey survey, which mirrors similar sentiments that we found in our annual Manufacturing Survey. In that annual survey, cost control jumped ahead of food safety for the first time in 24 year as the highest priority among all food and beverage manufacturing professionals as far as the weighted score goes (food safety received more first-place votes, but cost control racked up more second- and third-place votes to push it ahead overall). Meilhac says McKinsey’s dairy-focused survey showed similar results.
“Cost was actually top of mind, and at the same time, the second concern that came through loud and clear was the demand for volume growth,” he explains. “The third element, then, was the talent gap: How do we attract and then retain talent for these dairy plants?”
The dairy industry has been a trailblazer in recent years when it comes to giving its workforce options and opportunities. Less than two years ago, Land O’Lakes made waves that even made the rounds across mainstream media for its innovative approach to flexible work hours. According to Meilhac, dairies have continued to think about and approach labor recruitment and retention differently.
About the Author
Andy Hanacek
Senior Editor
Andy Hanacek has covered meat, poultry, bakery and snack foods as a B2B editor for nearly 20 years, and has toured hundreds of processing plants and food companies, sharing stories of innovation and technological advancement throughout the food supply chain. In 2018, he won a Folio:Eddie Award for his unique "From the Editor's Desk" video blogs, and he has brought home additional awards from Folio and ASBPE over the years. In addition, Hanacek led the Meat Industry Hall of Fame for several years and was vice president of communications for We R Food Safety, a food safety software and consulting company.