Dairy Milk Stages a Remarkable Comeback Amid Shifting Consumer Preferences
In a surprising turn of events, dairy milk is reclaiming its place on Australian menus after years of decline driven by environmental concerns and the rise of plant-based alternatives. This resurgence is fueled by a combination of economic pressures, evolving health trends, and a growing skepticism towards processed foods.
A Personal Awakening Leads Back to Dairy
Gabriel Morrison, a 28-year-old cinematographer, had not consumed dairy milk for a decade, opting instead for soy, almond, and oat milks since 2015. His perspective changed dramatically when he examined the ingredients label on a carton of cheap oat milk. "It's so much canola oil, and you imagine that in your glass. Discovering that much olive oil would seem really gross," Morrison explains. "I was just like, 'ooft, I should stop this.'"
In early 2025, influenced by his housemate's switch to more affordable dairy, Morrison reconsidered. "I'm looking at the ingredients and it's 100% cow's milk – this seems better than sugar, canola oil, vegetable oil, and a whole lot of other random stuff," he says. "There's probably way worse stuff in my life. It's just one of those many choices I make every day, and I'm feeling slightly better about it."
Economic and Health Factors Drive the Shift
The return to dairy milk is not an isolated incident but part of a broader trend. Shoppers are increasingly seeking supermarket discounts, saving money on daily coffees, and embracing new diet movements that prioritize natural products. Plant milks, once hailed as the future, appear to have passed their peak, with dairy businesses reporting surging sales, particularly in lactose-free options and protein-enriched varieties.
According to Dairy Australia, Australians reduced their annual milk consumption from 100 litres in 2015 to just 85 litres by 2025. However, recent data indicates a reversal, with supermarket milk sales growing by 1.1% in 2025 to over 1.4 billion litres, nearly two-thirds of which was cheaper homebrand milk. Michael Harvey, a senior analyst at Rabobank, notes, "The cost of all food has gone up, so consumers go back to basics."
The Rise and Stall of Plant-Based Alternatives
Over the past decade, plant milks experienced rapid growth, driven by rising incomes and heightened environmental awareness. Craig Shapiro, executive chairman of Riverina Fresh, a cafe dairy supplier, observed plant milks surge from less than 10% of sales to 25% by 2023, reaching 50% in inner-city cafes focused on sustainability. Research has shown that cow's milk production requires more water and generates higher emissions than plant-based options, with animal welfare concerns also playing a role.
Yet, momentum has shifted. IBISWorld analysis reveals that plant milk producer revenues doubled to $600 million annually from 2015 to 2022 but have since declined. Michael Perich, CEO of Milklab's owner Noumi, acknowledges slower growth as health trends push consumers towards "natural" products like cow's milk. "People are going back to meat. People are going back to dairy. Some consumers are a bit like, 'well, I want less ingredients,'" he says.
Health Perspectives and Nutritional Insights
Fiona Willer, CEO of Dietitians Australia, emphasizes that dairy milk is health-neutral, with soy milk often matching its protein and calcium levels. She reassures that canola and other seed oils in almond and oat milks are fine, despite concerns raised by figures like Robert F Kennedy Jr., who promotes unprocessed foods. Globally, easing enthusiasm for vegan diets and skepticism around ultra-processed foods are encouraging a return to wholefoods.
In the United States, milk consumption per person had been falling but stabilized by 2024, with sales booming in 2025. A key factor is the expansion of lactose-free options, allowing individuals with milk intolerances to re-enter the category. Australian sales of lactose-free a2 milk grew nearly 10% in the second half of 2025 compared to the same period in 2024. David Bortolussi, CEO of a2, notes, "There's a lot more opportunity for us to expand into lactose-free, and that's also bringing more consumers back into the milk category."
Protein Boom and Future Projections
The fitness trend is significantly boosting dairy sales, with protein-hungry shoppers driving demand. Bega Group, known for its cheese, now sees its future in milk and yoghurts, particularly "protein-plus" variants. Yoghurt products with extra protein are selling out nationwide, and Bega anticipates shoppers will soon consume a litre of high-protein milk weekly.
Pete Findlay, CEO of Bega, expects this craze to last at least five more years as it moves beyond teenage boys and gym enthusiasts into mainstream and older demographics. "It's actually going into older age categories as well because you need to ensure that you maintain your muscle mass," he explains. The growing popularity of weight loss drugs like Ozempic, which can suppress appetite and lead to muscle deterioration, may further sustain protein fixation. Findlay adds, "With that weight loss, we become more active and we want to maintain our muscle bulk. They're looking to consume dairy, which is great for us and great for the industry."
