The dairy industry is in a period of transition. Global dairy consumption is still rising, with world per-capita consumption of fresh dairy products expected to grow by around 11% over the next decade. However, the mix of products people reach for is shifting, and in many markets, the story is no longer a straightforward contest between dairy and its plant-based alternatives.

McKinsey’s research indicates that only a small minority consume dairy alternatives exclusively, while around a quarter choose both dairy and plant-based products, driven by taste preferences and perceived health benefits. This points to a ‘flexitarian’ reality, in which the front-runners are those products that deliver on health, functionality, taste and convenience, regardless of whether they’re dairy, plant-based, or somewhere in between.

This global health evolution is also reflective of trends across Europe, where the European Commission expects lower consumption of white milk but growing momentum for functional and fortified products, as well as dairy ingredients[1] . For dairy producers, the challenge is to match this growth, but that doesn’t have to mean a disruptive pivot or a complete overhaul. Instead, it’s about embracing flexibility by using dairy processing technologies that enable the extraction and refinement of new ingredients, support portfolio diversification and open up new value streams. 

How membrane filtration drives new revenue streams 

Membrane filtration is primarily used to separate milk and whey into key components, such as water, fat and protein, following cheese production. It can also be used to concentrate these streams and, for proteins, fractionate them. The outputs can be reintegrated into new products, such as protein-enriched milk, or sold as ingredients. At the same time, the separation and concentration of plant-based proteins is an increasingly important application as producers look to broaden portfolios and respond to evolving consumer preferences.

For example, cheese producer Mammen Dairies in Denmark and Tetra Pak developed a solution using a reverse osmosis membrane filtration unit for whey concentration. Whey is a valuable by-product of cheese production. It contains water and proteins, and the filtration unit removes approximately 75% of the water from the whey.[2] The concentrated whey protein is then sold to producers of ingredients for sports nutrition drinks – a product category that has seen increased consumer demand and appeal in recent years as part of the wider appetite for functional food and beverage products.[3] As a result, this filtration unit has made a significant difference to Mammen Dairies’ bottom line.[4]

Membrane filtration can extend the process even further by fractionating proteins to produce a wide spectrum of ingredients. For example, in white milk processing, microfiltration can separate the protein component into casein and whey proteins. The casein can then be further processed to extract calcium phosphate.[5] In turn, this can be added to products such as plant-based milk to boost the micronutrient content, which is naturally lower than in traditional dairy products.[6] This ability to separate, refine and redeploy ingredients is increasingly important for producers looking to expand into new categories and reach new consumers in a changing landscape, often with attractive profit potential.

Case in point is Arna, a small dairy in Iceland. After studying consumer trends, Arna saw a niche in the market for plant-based products and started producing oat-based skyr. The leap was feasible because the company already had an ultrafiltration unit in place, which was used in the production of lactose-free skyr and yoghurt. Tetra Pak assisted Arna in finding the right filtration equipment and membrane for oat filtration, which led to the company renting three pilot plants and developing six flavours of oat-based skyr, including strawberry, blueberry and lime-coconut.[7]

Building flexibility for dairy’s next phase

Consumer preferences are diversifying rapidly, reshaping the dairy landscape into one that is far more complex and demanding. In an increasingly nuanced market, success will favour those agile producers who can move with speed and precision. That translates to accelerating product development, expanding into functional and fortified ranges and extracting more value from previously underutilised streams.

Futureproofing requires more than incremental change. It calls for built-in processing flexibility to extend dairy’s core strengths into higher-growth, higher-value formats without the need for disruptive overhauls. Ultimately, the dairy producers best placed for what comes next will be those who design for versatility today, implementing systems that can adapt quickly, diversify intelligently and stay aligned with evolving expectations.

[1] https://agriculture.ec.europa.eu/system/files/2024-01/agricultural-outlook-2023-report_en_0.pdf 

[2] https://www.tetrapak.com/en-gb/insights/cases-articles/whey-filtration-Mammen-Dairies 

[3] https://www.mintel.com/insights/food-and-drink/growth-opportunities-in-sports-nutrition/

[4] https://www.tetrapak.com/en-gb/insights/cases-articles/whey-filtration-Mammen-Dairies

[5] https://www.tetrapak.com/en-gb/insights/cases-articles/optimizing-fractionation-of-milk-proteins

[6] https://pmc.ncbi.nlm.nih.gov/articles/PMC10504201/

[7] https://indd.adobe.com/view/2bf97b21-323a-468c-8bf6-83fbcdf76104