Elmhurst Dairy was once among the largest dairy operations on the East Coast, operating for 92 years before shutting down last fall due to declining profitability. Instead of exiting the milk industry entirely, this family-owned business is pivoting its expertise to thrive in the non-dairy market. The situation for those remaining in the traditional milk sector has been challenging, as consumer demand for dairy continues to wane. This decline forced dairy farmers to dispose of millions of pounds of milk last year, leading to a drop in prices across the industry. Conditions became so dire that the U.S. Department of Agriculture provided approximately $11.2 million in financial aid to assist dairy producers in navigating these challenges.
In response to the rise of non-dairy milk alternatives, many traditional dairy producers have filed lawsuits against non-dairy manufacturers, claiming that their assertions about being healthier or equivalent to dairy milk are misleading. Furthermore, there is legislation pending in Congress that aims to mandate that anything labeled as “milk” must be derived from dairy sources. However, this push has not significantly impacted the sales of non-dairy milk, which continue to thrive. A Mintel study conducted last year revealed a 9% increase in U.S. non-dairy milk sales in 2015, while sales of dairy milk fell by 7% during the same time frame. A glance into grocery store refrigerators clearly shows this trend, as retailers increasingly offer a wider selection of plant-based milks with fewer artificial ingredients.
Interestingly, many non-dairy milk products are now fortified with essential nutrients such as calcium citrate, vitamin D3, and folic acid, appealing to health-conscious consumers. These additions help to bridge the nutritional gap for those who are moving away from traditional dairy options. As the non-dairy segment continues to grow, it remains evident that the landscape of the milk industry is evolving, with traditional dairy players adapting to the changing market demands by incorporating their expertise into new product lines.