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Executive Summary: What are the Top 10 Dairy Industry Trends in 2026 & Beyond?
- Plant-Based Dairy Alternatives: This market is projected to grow from USD 43.3 billion in 2025 to USD 97.14 billion by 2034 at a 9.4% compound annual growth rate (CAGR).
- Dairy Safety & Hygiene: The U.S. Department of Agriculture (USDA) mandates highly pathogenic avian influenza (HPAI) testing for all unpasteurized milk amid pathogen risks. The dairy testing market will grow to USD 11.05 billion by 2030.
- Functional Dairy: Fortified dairy targeting gut, immune, and general wellness expands, with innovations such as probiotic buttermilk in aseptic packs. Valued at USD 48.6 billion in 2025, the market will reach USD 74.1 billion by 2035.
- Flavor Innovation: Younger consumers seek novel flavors, while AI-led insights drive launches like oat-dairy hybrids and botanical-infused yogurts. The dairy flavor market will hit USD 10.2 billion by 2032.
- Dairy Animal Health & Welfare: AI-based monitoring improves productivity by 15-20% and cuts health costs by 30%. Wearables and smart collars provide real-time insights.
- Automated Milking Systems (AMS): With 77% of farms citing labor savings, AMS adoption is rising. Global sales will reach USD 5.3 billion by 2029, driven by AI-enabled, data-rich milking robots.
- Cheese Innovation: Precision fermentation enables animal-free casein and whey for sustainable cheese. The cheese market will reach USD 210.15 billion by 2030.
- Cellular Dairy: 39% of Americans are willing to try cell-cultured dairy. Brown Food’s UnReal Milk cut emissions by 82% versus conventional milk. The cellular agriculture market will grow at a 16.12% CAGR to USD 786.74 billion by 2033.
- Lactose-Free & Hybrid Dairy: With 65% of people lactose intolerant, lactose-free dairy is 16% of the USA milk sales. Hybrid products blend dairy with plant-based bases, with the market expected to reach USD 21.4 billion by 2030.
- Dairy Farm Management: AI, sensors, and digital platforms cut mastitis cases by 80% and save USD 4620 annually on feed. Farm management software will reach USD 9.1 billion by 2032.
Read on to explore each trend in depth – uncover key drivers, current market stats, cutting-edge innovations, and dairy leading innovators shaping the future.
Frequently Asked Questions
1. What problems do dairy farmers face?
Dairy farmers manage rising operating expenses, limited labor availability, and frequent disruptions caused by extreme weather events such as floods and droughts.
2. What is the future of the dairy industry?
The demand for protein-rich and functional dairy products continues to grow. This trend encourages innovation in sustainability, automation, and AI.
3. What technologies are used in the dairy industry?
The dairy industry uses technologies such as automated milking systems, IoT sensors, robotics, AI-driven herd management, and precision feeding.
Methodology: How We Created the Dairy Industry Trend Report
For our trend reports, we leverage our proprietary StartUs Insights Discovery Platform, covering 7M+ global startups, 20K technologies & trends plus 150M+ patents, news articles, and market reports.
Creating a report involves approximately 40 hours of analysis. We evaluate our own startup data and complement these insights with external research, including industry reports, news articles, and market analyses. This process enables us to identify the most impactful and innovative trends in the dairy industry.
For each trend, we select two exemplary startups that meet the following criteria:
- Relevance: Their product, technology, or solution aligns with the trend.
- Founding Year: Established between 2020 and 2025.
- Company Size: A maximum of 200 employees.
- Location: Specific geographic considerations.
This approach ensures our reports provide reliable, actionable insights into the dairy innovation ecosystem while highlighting startups driving technological advancements in the industry.
Innovation Map outlines the Top 10 Dairy Industry Trends & 20 Promising Startups
For this in-depth research on the Top Dairy Industry Trends & Startups, we analyzed a sample of 3800+ global startups & scaleups. The Dairy Industry Innovation Map created from this data-driven research helps you improve strategic decision-making by giving you a comprehensive overview of the dairy industry trends & startups that impact your company.
Tree Map reveals the Impact of the Top 10 Dairy Industry Trends
Innovation reshapes the dairy industry across production, processing, and product development. Plant-based alternatives and cellular dairy replace traditional formats. Meanwhile, lactose-free and hybrid products address changing dietary preferences.
Functional dairy and new flavor profiles enable products to stand out and appeal to health-conscious consumers, especially in yogurt, beverages, and specialty items. Furthermore, cheese production evolves in response to changes in texture, ingredients, and aging methods.
At the farm level, automated milking systems and management platforms enhance yield, simplify operations, and improve traceability. In parallel, animal welfare technologies and updated safety protocols strengthen quality control and ensure regulatory compliance.
Global Startup Heat Map covers 3800+ Dairy Industry Startups & Scaleups
The Global Startup Heat Map showcases the distribution of 3800+ exemplary startups and scaleups analyzed using the StartUs Insights Discovery Platform. It highlights high startup activity in the USA and India, followed by the UK. From these, 20 promising startups are featured below, selected based on factors like founding year, location, and funding.
Want to Explore Dairy Industry Innovations & Trends?
Top 10 Emerging Dairy Industry Trends [2026 and Beyond]
1. Plant-Based Dairy Alternatives: 71% of Consumers See Them as Healthier
Traditional dairy production generates significant greenhouse gas emissions and requires substantial water. This is prompting more eco-conscious consumption. 60% believe plant-based diets reduce environmental impact.
Besides, 71% of consumers consider plant-based dairy healthier than conventional options. They cite reduced cholesterol, lower saturated fat, and added nutrients like probiotics and vitamins.
According to Euromonitor, retail sales of plant-based meat, seafood, milk, yogurt, ice cream, and cheese reached USD 28.6 billion, up 5%. Among these, plant-based milk remains the leading category. Sales in the USA reached USD 2.8 billion in the last year.
In that same year, 59% of the USA households purchased at least one vegan item. Also, milk alternatives reached 40% of households and saw a 76% repeat purchase rate. Almond milk led with 54% of sales, followed by oat milk at 25%.
To meet growing demand, major food companies are shifting their operations. Danone reconfigured its Villecomtal-sur-Arros plant to produce Alpro oat-based beverages. Additionally, Lactalis Canada launched its Enjoy! brand and repurposed dairy equipment to produce oat and cashew milks.
Startups are also entering the space, though funding remains moderate. In the last year, plant-based protein startups raised USD 309 million. Oatside, based in Singapore, secured USD 35 million in its Series B round. It was backed by TR Capital and Granite Asia.
Looking ahead, the plant-based dairy market is projected to grow from USD 43.3 billion in 2025 to USD 97.14 billion by 2034 at 9.4% CAGR.
Credit: Market Research Future
NewMoo produces Liquid Caseins
Israeli startup NewMoo creates animal-free dairy proteins by engineering plant seeds to express casein, which is the key protein in cow’s milk. It grows these modified seeds in agricultural fields and extracts liquid casein using a proprietary method that turns each plant into a production unit.
The extracted proteins mimic the structure and behavior of dairy proteins. It allows manufacturers to produce cheese without using animals. As a result, it lowers demand for land and water and reduces greenhouse gas emissions.
It also provides dairy producers with a scalable alternative that integrates into existing supply chains.
Harvest Moon advances Microbial Fermentation
Canadian startup Harvest Moon develops precision fermentation technology to produce recombinant bovine milk proteins for animal-free dairy products. It uses microorganisms to generate proteins that shape the taste, texture, and function of traditional dairy, such as melting and frothing.
Then, it blends these proteins with plant-based ingredients to create alternatives that align with conventional dairy in nutrition and performance. This combination removes lactose and cholesterol, increases protein content, and reduces sugar.
The startup excludes animals and also reduces risks linked to antibiotic resistance and zoonotic disease.
2. Dairy Safety & Hygiene: USDA Orders HPAI Tests for Raw Milk
Due to increased consumer and regulatory scrutiny, dairy safety and hygiene emerge as critical industry imperatives.
USDA issued a Federal Order in December 2024 mandating that all unpasteurized milk be tested for HPAI (H5N1) following the discovery of the virus in US dairy cows in March 2024.
Similar to this, frequent recalls of both raw and processed dairy products draw attention to hygienic deficiencies and have increased industry vigilance. These recalls include 2024 Campylobacter and E. coli in raw milk and cheeses, and Listeria in raw milk.
Consumers demand product safety and traceability. Stellapps in India raised USD 26 million in late 2024 to grow its mooMark traceable dairy line. Already, its technological network transports 14 million liters of milk per day under improved quality controls to connect 42 000 villages and 3.5 million farmers.
Dairy processors implement automated processes and hygienic designs to avoid contamination. Modern conveyor and handling systems have liftable belts and polished, non-porous surfaces that allow for proper cleaning of equipment. Automated sensors, such as metal detectors on conveyors, immediately remove any suspicious goods.
New in-plant and on-farm sensors identify problems early. For instance, businesses create in-line sensors to promptly detect antibiotic residues in milk or mastitis during milking. Similarly, labs test for pollutants and pathogens more quickly than classic culture tests thanks to rapid genomics and spectroscopic techniques.
Additionally, the USDA‘s Dairy Business Innovation (DBI) program in the last year allocated USD 11.04 million to assist dairy producers in implementing novel processing methods.
At a CAGR of 8.3%, the global dairy testing market is expected to increase from USD 7.42 billion in 2025 to USD 11.05 billion by 2030.
Credit: Markets and Markets
MILKIFY makes Real-Time Cooling & Digital Weighing Bikes
Pakistani startup Milkify runs a subscription-based platform to deliver fresh buffalo milk and other dairy products across the country. It operates through a mobile app that supports daily or scheduled orders, vacation holds, and online payments.
The startup uses custom bikes with cooling systems and digital balancing tools to preserve product quality during transit. It follows global hygiene and testing standards and maintains quality through cold-chain logistics and tamper-evident packaging.
Milkify offers trained delivery staff, round-the-clock customer support, and a flexible ordering policy to improve user experience.
FarmLokal advances On-Demand Milk Testing
Indian startup FarmLokal operates a farm-to-home e-commerce platform that delivers locally sourced dairy, produce, and pantry staples from vetted farmers to urban buyers. It runs a digital marketplace and mobile app where users browse products like buffalo and cow milk, pulses, ghee, oils, jaggery, and hydroponic vegetables.
The startup conducts automated tests at the source using Essae analyzers to maintain milk quality. It relies on certified delivery partners who use clean containers and wear uniforms to uphold hygiene standards.
FarmLokal supports local milkmen and small farmers by providing digital tools for sales and logistics. This reduces supply chain steps and strengthens rural livelihoods.
3. Functional Dairy: 11% Consumers Use Supplements Weekly
Health-conscious consumers continue to shape food preferences. A 2024 Circana study shows that 39% of shoppers prioritize healthier choices.
Lumina Intelligence reports that 11% of global consumers consume supplements or fortified foods at least once a week. Moreover, 13% of them do so a few times monthly, and 6% opt for daily use.
Gut health drives demand for biotic foods, with 15% of consumers selecting products for digestive support. Immune health and general wellness follow closely at 14% each.
In response, companies introduce functional dairy options. For instance, Amul launched high-protein milk containing 35 grams of protein in a 250 ml pack along with other protein-rich offerings to match local nutritional needs.
New technologies are enabling shelf-stable formats. Microencapsulation protects live probiotics in aseptic milk packaging. MilkyMist, based in South India, partnered with SIG and AnaBio Technologies to release the first long-life probiotic buttermilk in cartons.
Filtration techniques, including ultra- and cold-filtration, concentrate proteins without losing bioactive compounds. At the same time, aseptic processing and high-temperature short-time (HTST) pasteurization extend shelf life and preserve functionality.
Companies like Formo use microbial engineering to produce dairy proteins for cheese alternatives. In September 2024, Formo raised USD 61 million in Series B funding to launch koji-based cheeses.
The functional dairy market is set to grow steadily. It was valued at USD 48.6 billion in 2025 and will reach USD 74.1 billion by 2035 at a 4.5% CAGR.
Credit: Future Market Insights
Verley creates Functional Dairy Proteins
French startup Verley uses precision fermentation to produce animal-free dairy proteins for the food industry. It engineers microorganisms to synthesize proteins identical to those in cow’s milk. These proteins integrate easily into existing dairy formulations.
The ingredients improve flavor, texture, and nutritional value. This makes them suitable for industrial applications without affecting product standards.
Verley promotes food sovereignty and lowers dairy’s environmental impact. It supplies sustainable protein ingredients that allow manufacturers to adapt to shifting consumer and regulatory requirements.
Cosaic advances Natural Multifunctional Emulsion
Swiss startup Cosaic develops cell-free precision fermentation to create sustainable dairy proteins and multifunctional food ingredients. It replaces animals and live cells with engineered enzymes and DNA templates in a controlled setup. This simplifies protein synthesis and enables scalable, contamination-resistant production.
The startup also launches Cosaic Neo, a yeast-based emulsion that provides eight distinct functions in one ingredient. A few of these include emulsification, natural whitening, off-note masking for proteins, and improved foam quality.
Cosaic Neo suits beverages, creamers, sauces, and nutritional products. It supports clean-label recipes with minimal use and consistent performance.
Cosaic allows manufacturers to enhance texture, stability, and nutritional delivery. At the same time, its solutions reduce environmental impact and lower production costs.
4. Flavor Innovation: 1 in 3 Millennials and Gen Z Seek New Flavor Profiles
Demand for novel and functional dairy flavors continues to grow. A recent Innova Market Insights survey shows that one in three millennials and Gen Z consumers actively seek new and distinct flavor profiles. At the same time, 44% of respondents said nostalgic or traditional tastes influence their buying decisions.
Preventive health is also shaping food choices. According to GlobalData‘s Q2 2024 survey, 38% of global consumers consider immunity-boosting ingredients essential in food and drink purchases. Half view botanicals and plant-based elements as health-promoting, with an interest in dairy as a delivery platform for these nutrients.
In response, brands pair familiar flavors with functional ingredients. Yogurts feature elderberry and curcuma for gut health, while fruit and plant powders deliver both nutrition and taste.
Flavor development is increasingly data-driven. AI and social listening tools like Tastewise’s Palette identify emerging profiles, such as hojicha, pistachio, and gianduja chocolate, for upcoming dairy launches.
Hybrid formats are gaining ground. Brands like Kerry Dairy blend oats and milk in products like Smug to balance taste with environmental benefits. Ice cream producers are also experimenting. Breyers partnered with Hershey‘s to launch the Campfire Collection. It is a line featuring s’mores-flavored tubs, bars, and sandwiches made with real Hershey’s chocolate.
Besides, the global dairy flavor market is projected to reach USD 10.2 billion by 2032, with a CAGR of 4.87% from 2024 to 2032.
Credit: Market Research Future
Jubilee’s makes Healthy Flavored Milk
US-based startup Jubilee’s produces flavored organic milk drinks for children. Each product blends whole milk with hidden fruits and vegetables to offer a nutrient-dense, convenient option.
The startup uses real juices, purees, and extracts in shelf-stable boxes. It skips added sugars and artificial ingredients. Nostalgic dessert-inspired flavors, such as chocolate chip cookie and banana cream pie, enhance appeal while delivering 7-8 grams of protein and essential vitamins.
The products meet the needs of picky eaters. Each milk box contains half the sugar of conventional flavored milk. Besides, portable packaging suits school lunches and busy families.
Kinish develops Rice-based Ice Cream & Cheese
Japanese startup Kinish produces animal-free dairy proteins through plant molecular farming using genetically engineered dwarf rice. It alters rice plants to express milk proteins and cultivates them in vertical farms to ensure consistent output without animal dependence.
The startup extracts these proteins and formulates dairy alternatives like ice cream and cheese that resemble the taste and texture of traditional dairy. Its process merges the environmental advantages of plant-based systems with the sensory quality of conventional products.
Kinish uses compact rice crops and closed-loop farming that lowers greenhouse gas emissions and reduces land use.
Moreover, the startup has secured USD 800K in a seed round.
5. Dairy Animal Health & Welfare: Monitoring Boosts Productivity 15-20%
Customers are calling for greater animal health and welfare. According to a 2024 cross-country study of 3192 consumers, animal welfare is ranked as the most important consideration when buying meat and dairy products. This is more so than environmental considerations like carbon labeling, along with freshness and flavor.
They are appreciating the animal care information on the packaging, which indicates that market access depends on welfare transparency.
Precision livestock farming technologies, such as wearables, sensors, and AI, increase farm profitability and welfare at the same time.
For instance, the UK supermarket Sainsbury’s installed an AI camera system, Vet Vision AI, on 30 of its supplier farms to continuously monitor cow comfort and behavior. The promising initial findings include the AI’s ability to identify problems such as shorter laying times and the correlation between higher milk yield for the same meal and increased cow comfort.
The advanced monitoring increases productivity by 15-20% and reduces animal health expenses by about 30%.
While reducing feed waste, automated feeding systems also enhance cow health.
For example, CattleEye and other AI vision systems also detect lameness sooner. One technique reduces lameness by about 10 percentage points by identifying lame cows 4 weeks earlier than humans.
Warable collars and barn sensors continuously communicate problems such as heat stress, sickness, and mastitis. This assists farmers in taking action before problems deteriorate.
Moreover, the animal health market is expected to increase at a CAGR of 10.46% from 2025 to 2030 by reaching USD 112.33 billion.
Credit: Grand View Research
Neurohive enables Precision Livestock Management
Greek startup Neurohive builds AI tools for precision livestock farming. It focuses on increasing productivity and improving animal welfare in sheep and goat operations.
The startup offers Digital Farmer, a monitoring system that uses on-farm sensors to track milk yield, animal health, and environmental conditions in real time. It transmits this data to a cloud platform, where algorithms and AI process the information and generate herd management insights.
Farmers access these insights through mobile or desktop apps. They receive individual animal profiles and automated analyses for their entire flock.
The system detects diseases early, optimizes feeding strategies, and supports targeted breeding. These features allow for lowering feed costs and reducing animal illness.
Additionally, improved resource use cuts methane emissions and minimizes environmental impact.
Collie enables Automated Animal Management
Dutch startup Collie creates a precision livestock management system that blends AI-powered computer vision with solar-powered smart collars. It uses cameras and behavioral analytics to track cow health and movement in real time. Meanwhile, ergonomic collars guide herding and enforce virtual fencing through sound, vibration, and gentle pulses.
It enables farmers to control grazing zones, pasture rotation, and animal movement through a mobile app. This interface also handles strip grazing and dry matter intake calculations.
The system integrates with the cloud for real-time updates and continuous data flow. It triggers early health alerts and improves pasture use.
Besides, its solar-powered collars work indoors and outdoors to reduce the need for fixed infrastructure.
Collie has also raised a EUR 3.5 million seed round from deeptech investor Freigeist Capital.
6. Automated Milking Systems (AMS): Market to Reach USD 5.3 B by 2029
The main drivers of AMS adoption include rising labor costs, rising milk production demand, improvements in sensor-based automation, greater animal welfare consciousness, and government backing.
The biggest motivators are cost concerns and labor scarcity. According to a USDA survey, nearly 77% of farms that use robotic milkers cited labor time savings as a factor in their decision to use them. Automation becomes more appealing as inflation and salaries rise.
Although it is still very low, robotic milking systems are becoming more popular in the USA. Currently, almost 1000 farms, primarily in the Midwest and Northeast, employ robotic milking systems. This accounts for around 5% of dairy operations nationwide. Besides, 34 000 systems are in use worldwide, with higher adoption rates.
Precision and data are particularly important to farms, and AMS offers real-time records on yields, milk components, and cow behavior.
Sensors for milk quality and cow health, automated teat cleaning, and robotic arms with laser guidance are examples of modern units. For instance, Lely’s Astronaut robot attaches itself and cleans the teats automatically while keeping an eye on 32 parameters during each milking. These parameters include yield, fat, protein, conductivity, etc.
AI is also being incorporated into research labs. For example, Texas A&M University researchers are creating machine learning (ML) models for AMS that will enable real-time detection of idle time, heat stress effects, and milking problems.
Moreover, 25 dairy farms received USD 1.58 million from a 2024 Northeast US grant program for modernization projects. Many of these include robotics and upgraded milking parlors to reduce labor and energy use.
The market for milking robots is expected to reach USD 5.3 billion by 2029, with a CAGR of 10.8% from 2024 to 2029.
Credit: Markets and Markets
Milkmachine manufactures Milking Machines
Indian startup Milkmachine builds and distributes automated milking machines that simplify the milking process for dairy farmers. Its machines use a vacuum-based system and soft suction cups to start milking with the push of a button. This setup reduces discomfort for the animal.
Each unit finishes the task within a few minutes and preserves milk purity through an airtight design. The startup’s models, Lite, Pro, Ultra, and Titan, serve small farms and larger dairies with herds up to 100 animals.
Milkmachine cuts labor needs and increases efficiency, enabling both personal and commercial dairy operations run more smoothly.
miRobot enables Milking Parlor Automation
Israeli startup miRobot develops a robotic milking add-on that automates the entire milking process. It combines 3D imaging, robotic arms, and existing parlor systems to streamline operations.
The system identifies cows and guides cleaning and milking cups using imaging sensors. It performs teat stimulation, cleaning, and disinfection without human involvement.
It fits into various stall types and parlor setups. The farmers are able to supervise multiple milking sessions at once to reduce time and increase output.
Further, its compact design simplifies installation and maintenance while avoiding vendor lock-in.
7. Cheese Innovation: Market to Reach USD 210.15 B by 2030
Cheese development is shifting toward personalized nutrition, climate-resilient production, and regional flavor mapping. Some companies offer DNA-based dietary recommendations, while others explore lab-grown dairy proteins and microbial terroir profiling to highlight local microbial influences.
Technology continues to remake cheese at the molecular level. Precision fermentation plays a central role. Israeli startup DairyX engineered yeast to produce casein micelles, the protein structures responsible for cheese’s stretch and creaminess. If spent yeast is reused, the process generates fewer greenhouse gas emissions than conventional dairy.
New Zealand’s Daisy Lab also uses yeast to create whey proteins through plant molecular farming. It presents another alternative to animal-derived ingredients.
Traditional dairy companies respond with new launches. Tillamook introduced four cheese products in the last year. It includes Spicy Colby Jack slices and Smoked Medium Cheddar slices.
In France, Standing Ovation secured EUR 3 million in public funding to expand its production of animal-free casein made through precision fermentation.
Despite broader market volatility, the global cheese sector showed resilience in the last year. European cheese production grew by 0.83%, slightly ahead of milk production growth at 0.73%. Ireland and Spain expanded production capacity, while Germany posted a 3.7% increase.
Looking ahead, analysts expect the cheese market to grow from USD 163.83 billion in 2025 to USD 210.15 billion by 2030. This reflects a CAGR of 4.94%.
Credit: Mordor Intelligence
Viva la Faba develops Organic Beans & Pulses-based Cheese
German startup Viva la Faba offers plant-based cheeses made from organic fava beans. Through a proprietary method, it extracts concentrated proteins that serve as the foundation for dairy-free cheese.
The lineup includes four varieties: grated, mild, intensive, and herbs of Provence. Each product meets specific culinary needs, from baking to layering to seasoning.
All cheeses are plant-based, additive-free, and crafted in-house. The startup uses natural seasonings and organic ingredients to maintain product integrity.
Viva la Faba promotes sustainable agriculture and delivers functional alternatives for consumers seeking dairy-free options with familiar taste and texture.
Monarchs Crackers produces Low Carb Cheese Crackers
UK-based startup Monarchs Crackers makes plant-based cheese crackers using sustainably sourced ingredients. It combines vegan cheese with legumes like lupin flour to create a high-protein, gluten-free base that replicates the texture and flavor of dairy-based snacks.
A slow-baking process preserves flavor and crunch while avoiding artificial additives, preservatives, and palm oil. The plant-based range includes Cheddar and Habanero, each crafted to offer distinct tastes. It supports nutritional density and allergen-friendly formulations.
8. Cellular Dairy: 39% Willing to Try Precision-Fermented Dairy
Compared to traditional milk production, lab-produced milk utilizes 90% less water, 95% less land, and has an 82% smaller carbon footprint.
The dairy industry contributes significantly to land use and greenhouse gas emissions. This considerable reduction positions cellular dairy as a climate-friendly alternative.
According to surveys conducted in the last year, 39% of US citizens are willing to test precision-fermented or cell-cultured dairy products.
Besides, a significant motive is health. According to one survey, 48% of US customers stated that trying fermented dairy would be primarily motivated by health benefits.
Brown Foods formulated UnReal Milk to match the taste, texture, and nutrition of conventional cow milk. UnReal Milk is an animal-free product used to make cheese, ice cream, butter, and other dairy products. According to the company, substituting fermenting tanks for cows reduces the resource consumption and emissions related to dairy.
Dairy production using microorganisms or cell culture is much more effective at concentrating on the beneficial aspects of milk. The proteins that give dairy its functional qualities make up just around 3.3% of cow’s milk. The remainder is made up of water, fat, carbohydrates, and other substances. Cellular technologies directly generate that 3.3% by bypassing the resource-intensive process of cow rearing.
Rapid biotechnological advancements also drive this trend. For example, microbial fermentation yields have significantly increased. Higher quantities and reduced prices for fermented dairy proteins are anticipated as a result of the advancements in strain engineering and bioprocessing.
Perfect Day, a company that uses precision fermentation to produce dairy protein without animals, raised USD 90 million in a pre-Series E fundraising round.
From 2023 to 2033, the global cellular agriculture market is expanding at a CAGR of 16.12%. By 2033, the market is projected to grow to a value of USD 786.74 billion.
Credit: Spherical Insights
All G develops Recombinant Lactoferrin
Australian startup All G applies precision fermentation to produce animal-free dairy proteins and functional ingredients. It programs microorganisms to generate recombinant versions of lactoferrin that match the structure of human and bovine forms. Lactoferrin delivers antimicrobial, anti-inflammatory, and immune-supporting benefits.
All G produces animal-free casein for dairy applications and plant-based meats. This broader product portfolio supports health-focused innovation and responds to the rising demand for scalable, sustainable protein sources.
Opalia makes Cell-based Milk Products
Canadian startup Opalia cultivates mammary gland cells in bioreactors to produce milk without involving animals. It isolates cells from cow udders and nourishes them with a solution containing sugars, salts, and amino acids.
Through a proprietary method, the startup triggers lactation in the bioreactor. As a result, cells secrete milk components, which are then harvested and processed into dairy products.
The process avoids antibiotics and hormones. This yields an animal-free milk alternative that maintains the taste and function of conventional dairy. Meanwhile, Opalia links cellular agriculture with scalable production to develop dairy options that support sustainability and ethical consumption.
9. Lactose-Free & Hybrid Dairy: Market to Reach USD 25.1 B by 2035
Lactose-free dairy has shifted from a niche segment to a mainstream category within the industry. Roughly 65% of the global population experiences some level of lactose intolerance. In the US, around 36% of people seek dairy alternatives that avoid digestive discomfort.
Lactose-free milk represents 16% of US milk sales by value and 8.4% by volume. Sales rose 13.6% in dollar terms and 10.4% in volume over the previous year.
Health and wellness trends continue to increase demand. Consumers associate lactose-free labeling with nutritional benefits and digestive comfort. These products retain the taste and protein content of conventional milk but reduce gastrointestinal issues.
Since 2023, processors and cooperatives have launched multiple lactose-free innovations. Darigold rolled out lactose-free dairy creamers in late 2023. Organic Valley followed with its version by mid-2024.
Meanwhile, hybrid dairy products emerged as a new focus area. These items blend traditional dairy with plant-based ingredients.
In the last year, Ireland’s Kerry Group introduced Smug, a range of hybrid dairy offerings in the UK. Smug combines cow’s milk with oat bases, and its blended milk contains 75% dairy and 25% oat. The butter alternative splits evenly between dairy and oats.
Moreover, the global lactose-free dairy market rose to USD 14.5 billion in 2025 and is projected to grow at a CAGR of 5.6%, reaching USD 25.1 billion by 2035.
Credit: Future Market Insights
In parallel, the hybrid dairy category is gaining traction. Analysts estimate its market size will reach USD 21.4 billion by 2030, growing at a CAGR of 7.4% from 2024 to 2030.
Nuttino creates Lactose-free Cashew Cheeses & Spreads
UAE-based startup Nuttino produces dairy-free cheeses and spreads using cashews and a proprietary fermentation method. It blends soaked cashews with natural ingredients, then cultures them to create creamy textures and savory flavors. The process excludes dairy, oils, sugar, and gluten.
Its product range includes seasoned spreads like paprika chili. Each item supports a balanced diet and offers high nutrient density with notable protein content. The formulations suit various dietary needs, including vegan, lactose-free, and health-conscious preferences.
Nuttino emphasizes ingredient transparency and flavor development through fermentation to deliver a versatile food line. These allergen-friendly options encourage inclusive eating experiences built around nutrition and taste.
Strive develops Animal-free Whey Protein
US-based startup Strive creates dairy-style beverages without using cows. It uses fermentation-derived whey protein to mimic the taste, texture, and nutrition of milk.
The startup produces FREEMILK, a lactose-free alternative made through precision fermentation to generate bioidentical whey.
The product line includes original and chocolate variants. The chocolate option contains 50% less sugar and 25% more protein than standard chocolate milk.
All versions are free of cholesterol and hormones, and perform well in coffee, cooking, and daily consumption.
10. Dairy Farm Management: Smart Collars Cut Mastitis 80% Annually
Labor shortages and rising wages continue to drive automation in dairy farming. In the USA, livestock workers earned an average of USD 17.45 per hour in 2024. New overtime laws in several states added financial pressure. As skilled labor becomes harder to find, farmers turn to automated systems.
Climate commitments from major dairy buyers influence farm practices. Companies like Mars and Nestle pledged over USD 74 million in 2024-25 to support sustainability programs for dairy farmers in New Zealand and Europe. These investments enable producers to meet net-zero emissions targets by 2050.
Consumer demand for transparency, animal welfare, and product quality is growing. It prompts farms to adopt digital record-keeping, milk sensors, and blockchain pilots for traceability.
Likewise, sensor-based monitoring systems have gained popularity. These devices, often worn as collars or ear tags, track cow behavior and health metrics such as rumination, movement, body temperature, and drinking patterns. Early detection of health issues allows farmers to manage their herds more effectively.
In Nordic countries, farms adopted 24/7 smart monitoring collars to reduce mastitis and improve feeding. In the last year, farms used these systems and reported 80% fewer mastitis cases. They saved about USD 4620 annually on feed costs by identifying issues early.
Modern dairy farm management software aggregates data from robots, sensors, milk testers, and feed systems. AI analyzes this data to optimize decisions. For example, a 2024 study at the University of Manitoba showed that AI-driven herd genetics predicted milk yield and disease resistance with 99.8% accuracy. By analyzing over 200 genetic markers, the system accelerated genetic progress by 300% compared to traditional methods.
The global dairy farm management software market is projected to reach USD 9.1 billion by 2032 at an 8.2% CAGR from 2025 to 2033.
Credit: Dataintelo
Rumina enables Zootechnical and Financial Management
Brazilian startup Rumina designs integrated tools for livestock and dairy farm management. Its technologies improve animal welfare, milk quality, and operational efficiency.
The startup offers a hardware and software suite that includes Ideagri, OnFarm, RumiAction, RumiFlow, and RumiScore. These tools collect and apply real-time data across health, zootechnical, and financial operations.
Ideagri manages centralized data with analytics and offline access. OnFarm supports mastitis diagnostics on-site to deliver microbiological results within 24 hours.
Further, RumiAction uses AI-powered collars to monitor cow health, movement, and reproduction. It connects with Ideagri to support timely, informed decisions.
Meanwhile, RumiFlow automates pre-milking routines using sensor-driven brushes and disinfection modules. This improves hygiene and lowers disease risk.
Lastly, RumiScore benchmarks farm performance against national metrics. It highlights opportunities to strengthen productivity and sustainability.
InsureCow creates Digital Livestock Assets
Singaporean startup InsureCow develops a fintech-insurtech platform that converts livestock into digital assets. It expands financial inclusion and strengthens farm resilience for smallholder dairy farmers.
It uses AI, digital twins, Know Your Cow technology, and muzzle printometry to assign tamper-proof digital identities to cattle. These tools enable secure insurance enrollment and facilitate financial services.
InsureCow integrates these technologies with IoT-based management tools to monitor animal health, milk output, and environmental factors. This supports data-driven decision-making and automates claim processing.
Discover all Dairy Industry Trends, Technologies & Startups
The emerging trends are set to reshape the dairy industry. Precision fermentation, AI-based herd health monitoring, and carbon-neutral production are gaining traction as strategic priorities.
At the same time, innovations such as 3D-printed dairy products and personalized nutrition are beginning to influence niche markets.
Together, these developments point toward a dairy sector that integrates technology, reduces environmental impact, and adapts to evolving consumer preferences.
The Dairy Industry Trends & Startups outlined in this report only scratch the surface of trends that we identified during our data-driven innovation & startup scouting process. Identifying new opportunities & emerging technologies to implement into your business goes a long way in gaining a competitive advantage.
