Plant-based products might be gaining attention, but consumers remain keen on dairy. According to a new CoBank report, growth in retail sales of dairy products have climbed 7.7% over the past decade. Cheese, butter, and yogurt are fueling the category growth, along with emerging dairy products designed to capitalize on the rising demand for healthy protein-rich snacks. The U.S. Department of Agriculture states that over the last 25 years, per capita consumption of butter increased 43.2%, cheese increased 45.8%, and yogurt consumption increased 142.4%.

With increased interest in dairy products, it makes sense that bakery and snack producers are also looking to incorporate dairy-based products into their recipes. More than ever, dairy items are integral in many snack and bakery products, providing flavor, texture, function, and nutrition.

Ingredient innovation

Tom Guerin is research program manager at the Center for Dairy Research. Located on the campus of the University of Wisconsin-Madison, the center provides education, technical support, and research and innovation expertise to the dairy industry.

Guerin notes consumers' interest in protein continues to grow. Ingredients such as whey protein concentrate (WPC) and milk protein concentrates (MPC) are used to deliver higher protein contents, with a breadth of functionality that makes them easy to incorporate into a wide variety of food and beverage applications. Consumers looking for that extra protein content will find dairy proteins deliver their nutritional and flavor demands, and producers can harness those ingredients to deliver higher-protein products.

“When considering dairy ingredients, it is important to look at both the flavor and functionality,” notes Guerin. “On the flavor side, dairy powders, specifically cheese powders are an efficient way to deliver authentic flavor and are used as seasonings in both snack and bakery products. Sharp cheddar is a popular flavor but we continue to see strong interest in Italian flavor profiles such as parmesan and asiago,” he says.

When it comes to delivering functionality, dairy products now offer more sophisticated options in the area of clean-label ingredients. Specific cultured dairy products can act as a clean-label preservative due to the organic acids that are naturally produced, shares Guerin. These ingredients can be used in bakery products as well as beverages.

There’s almost a never-ending range of snack and bakery applications for dairy. Nutritional bars can boost protein by including MPC in the binder system as well as including it in the chocolate coating. WPC is a useful egg replacer in bakery applications. Not to mention cheese itself. Cheese delivers a convenient and nutritious snack option that is found in a variety of flavors and formats.

Ben Kroeplin, senior marketing manager, Actus Nutrition, sees acid casein as an up-and-coming ingredient.

“Consumers want more protein in their diet, which the casein provides, but it also works well when blended with whey proteins and milk proteins in extruded products,” Kroeplin notes. “These extruded proteins are available in nearly any shape and size imaginable. In bakery applications, they can provide flavor-neutral, nutrition-packed texture.”

Greg Hecksher, senior director for sales, taste and flavors, Dairy Farmers of America (DFA), observes the industry recently has launched numerous exciting innovations.

“Reaction (RX) milk fat concentrate is an ingredient that offers value by adding creaminess and mouthfeel to anything that can benefit from a dairy boost,” Hecksher states. “In addition, it has been successful in reducing off notes such as bitterness, astringency, and chemical tastes coming from high-intensity sweeteners, protein isolates, and even flavors.” He adds that the usage level for the ingredient ranges from 0.25%-1.0% (depending upon the application and desired outcome), and it can be used in cookies, crackers, pastries, pie crusts, fillings, or snack bases.

Another new product recently launched is RX e, a dairy-based paste that intensifies notes already inherently in products, particularly delivering on roasted, browned, and caramelized profiles, states Hecksher. This ingredient works as a mix into dough bases (such as cookies and crackers), bakery fillings, topical coatings, or any snack that would benefit from a savory brown butter profile. Both RX products are clean-label and are solely produced using dairy components.

Hecksher notes seeing increased interest in innovative dairy-based seasonings for a variety of snack and bakery applications. “In addition to more traditional seasonings, we are working on sweet dairy solutions through our line of Amplifi Dustings,” he relates. “Amplifi Dusting is a seasoning produced using our Amplifi technology, which provides a more impactful dairy flavor. The product line focuses on rapid taste delivery and is available in a variety of on-trend, sweet profiles, such as cream cheese and red velvet cake.”

One of the products that Butter Buds is known for is their Cheese Buds, concentrated flavors made with real cheese. Using the company’s enzyme modification process, it creates powdered flavors said to deliver as much as 40 times the flavor strength of real cheese. Most recently the company launched a new line of creamy cheese in powdered formats: Cheese Buds Creamy Cheddar, Cheese Buds Creamy Co-Jack, and Cheese Buds Creamy Parmesan.

Lisa Spurlock, food scientist, Butter Buds, says, “The Cheese Buds Creamy line was developed to assist with the indulgent snacking trends. It adds creamy richness along with distinct savory notes of these favorite cheese profiles all in one product. The flavor components of Butter Buds’ creamy product line are balanced so it retains the creamy profile without veering too cheesy or salty, even if the usage level is increased.”

The company also recently developed and introduced Cheese Buds Simple Cheddar Cheese Concentrate.

“The Cheese Buds Simple Cheddar Cheese Concentrate allows for a simple ingredient list and can be labeled as a cheese concentrate rather than flavor or natural flavor. This ingredient has a medium cheddar profile with well-balanced cheese sour and cheese bitter notes. It can be used in all types of snack and bakery applications such as cheese straws, cheese bread, [and] cheese chip seasoning and is especially useful in enhancing cheese powders,” states Spurlock. The ingredient is delivered in a powder format and is available in a number of different certifications including GMO-Free, kosher, halal, gluten-free, and vegetarian.

Trending flavors

Peter Losee, vice president of marketing, Bluegrass Ingredients, has seen snack manufacturers over the past year seeking out seasoning combinations that blend the familiar flavor and texture attributes of dairy with experiential flavors like citrus and spice. Lime flavor has been a frequent request from snack manufacturers; also, the spice/heat and citrus trend has been robust since late 2022 and based on the company’s research, the trend likely will continue into 2025.

Citrus has played an interesting role in our innovation efforts for bakery, states Losee. “The pursuit of the ultimate ‘cheese bread’ has been pursued by bakers over the years. Addressing both food safety and water activity has challenged artisan bakers from making commercially available and consumer-desired bread. Over the past year, the Agile Kitchen at Bluegrass has developed cheese breads using combinations of our Cheese Concentrates and Lemon Powder. The Cheese Concentrate delivers dairy flavor and aroma, while our Lemon Powder act as a flavor potentiator enhancing the ‘cheesiness’ in the bread. Together, these two ingredients help deliver a stable dough and finished product. Beyond the cheese bread flavor and aroma, we observed enhanced cell structure, crust development, and crust color, all the features desirable to consumers.”

Losee also notes cuisines from around the world are impacting trending flavors, with dairy products coming into play.

“Italian cheese flavors like parmesan, mozzarella, and asiago continue to be high-demand dairy flavors,” Losee observes. “At the same time, we’re seeing variations like Cotija emerge as well. One particularly interesting area is the rise of Peruvian flavors, especially when it comes to sauces and seasoning.”

Hecksher is seeing consumers wanting more bold, intense, and unique flavor profiles all while keeping real dairy flavors and clean label.

“This goes way beyond the traditional cheese-based seasonings, including profiles, adding spicy twists, Hispanic flavors, or shifting flavors from non-traditional spaces into snacking categories,” Hecksher says. “For instance, we have seen a huge rise in demand for Hispanic cheese profiles, particularly Cotija and Oaxaca. Consumers are also starting to demand more interesting and complex flavors like Gruyere.”