Reduced-Lactose Milk Driving Dairy’s Menu Growth

Operators offering reduced-lactose or lactose-free milk have seen increased use of the format at nearly double the rate of most other varieties, with 44% reporting growth, according to Datassential’s Cheese & Dairy report.

The format is “the single clearest growth engine in dairy,” the report said, leaving even staples like whole milk well behind, which saw usage increases among just 22% of operators.

Consumption remains narrow even as usage grows: more than half of milk consumers never drink the format, yet reduced-lactose milk still ranks third for daily consumption, trailing only unflavored whole and unflavored 2% milks.

About half of milk consumers say they would be more likely to buy or pay more for reduced-lactose milk, yet 62% of milk-serving operators say they do not carry reduced-lactose milk at all.

Closing that gap is “a question of availability and trial, on both shelves and menus,” the report said.

Gen Z reaches for the format the most often, with reduced-lactose accounting for 12% of the generation’s last-milk occasions, compared with 7% for the overall population. Gen Z is also the least likely group to have had milk in the past day and is more likely than older generations to drink it outside a traditional meal.

The cohort sourced 22% of its last milk occasions away from home, against 2% for Boomers.

The takeaway for suppliers and operators isn’t that Gen Z is giving up on milk, the report said, but that the generation is reaching for it in different occasions and formats. It suggests meeting such consumers at snack occasions with lactose-friendly and flavored options.