What High-Protein Dairy Growth Means For Dairy Processors
Protein continues to influence product development throughout the dairy industry. Recent retail data indicates that dairy products carrying protein claims are growing faster than the broader dairy category, with yogurt, cottage cheese and milk among the areas showing momentum.
While protein-focused products continue to show growth in several dairy categories, market opportunities can vary significantly by customer base, distribution channel and product type. The data does not mean every dairy processor should pursue the same strategy or assume current growth will continue indefinitely.
For processors experiencing increased demand, however, market growth can eventually become a production question. Manufacturers may need to evaluate available capacity, throughput, labor, automation and downstream operations. If growth creates opportunities for new products or formats, additional considerations can include how those products fit within existing equipment and production schedules.
Understanding the consumer trend is important. Understanding whether an operation is prepared to respond if demand grows is the next step.
Key Takeaways
- Dairy products carrying protein claims represented a $10.4 billion segment of the U.S. dairy market in recent Circana retail data reported by DairyReporter.
- Protein-positioned yogurt, cottage cheese and milk have shown growth, although opportunities can vary by product, customer and distribution channel.
- Increased demand for an existing product can place additional pressure on production capacity and throughput.
- Increasing production volume and introducing new product formats create different manufacturing challenges.
- Actual production capacity depends on more than maximum equipment speeds and should account for changeovers, sanitation, maintenance, labor and downstream operations.
- Identifying current production constraints can help processors better prepare for future growth opportunities.
Protein Has Become An Important Dairy Product Attribute
Protein is hardly new to dairy.
Milk, cheese, yogurt and other dairy foods have long provided protein as part of their nutritional profiles. What has changed is the prominence of protein in how certain products are developed, positioned and marketed.
Recent Circana retail data reported by DairyReporter provides some context. Dairy products carrying protein claims represent approximately $10.4 billion of the $104 billion U.S. dairy market. During the period measured, those products grew 13.7% in value and 7.5% in volume, compared with growth of 2% in value and 0.3% in volume across the broader dairy category.
The growth also extends across multiple categories.
Protein-positioned yogurt grew 23.2% in value and 16.8% in volume, while yogurt overall grew 12.2% and 7.3%, respectively. Cottage cheese products carrying protein claims grew 18.1% in value and 14.6% in volume. High-protein milk recorded 7.7% value growth and 1.2% volume growth.
Those figures don’t mean every dairy product needs a new protein claim or that every processor should pursue the same strategy. Market opportunities can vary significantly depending on the product, customer base and distribution channel.
The data does, however, provide useful evidence that protein remains an important consideration within several dairy categories.
For manufacturers, the more practical question may be what happens inside the plant if demand for a particular product continues to grow.
From Consumer Demand To Production Demand
A growing category looks very different from the production floor than it does from the grocery aisle.
Consumers see a carton of cottage cheese, package of cheese, cup of yogurt or bottle of milk.
Processors see production volume, run times, labor requirements, equipment utilization, sanitation schedules, packaging capacity and throughput.
When sales increase gradually, an existing operation may be able to absorb the additional volume. Sustained growth, however, can eventually expose constraints that were less noticeable at lower production levels.
A cutting operation might become a bottleneck. Filling equipment may be operating closer to available capacity. Manual product handling that worked well at lower volumes may require more labor as production increases. Downstream packaging may not keep pace with upstream processing.
This is why market growth and capacity planning often need to be considered together.
Rather than waiting until equipment is consistently operating at its limits, manufacturers can evaluate where additional demand would place the most pressure on their existing process.
Capacity Planning Requires A Whole-Line View
When processors evaluate capacity, it can be tempting to focus on a single number: how many pounds or packages can the line produce per hour?
That number matters, but actual production capacity is more complicated.
A line capable of a particular maximum throughput under ideal conditions may produce less over the course of a normal production week. Production also includes product transitions, sanitation, planned maintenance, equipment adjustments and other operational requirements.
Product mix matters too.
One long production run can create a very different operating environment than several shorter runs of different products. Adding another package size or finished format can affect how equipment is scheduled even if total production volume remains similar.
Downstream operations also have to keep pace. Increasing the speed of one machine provides limited benefit if the next operation cannot accept the additional product. Likewise, automating an upstream step may simply move a bottleneck farther down the line.
Processors evaluating capacity may benefit from asking:
- Where are the current production bottlenecks?
- Which equipment is approaching available capacity?
- Are upstream and downstream systems operating at compatible rates?
- How much production time is required for changeovers and sanitation?
- How much labor is required at different stages of the process?
- Could demand increase without adding another shift?
- What would happen if production volume increased moderately?
- At what point would additional equipment or automation become necessary?
Looking at production as a connected system can help manufacturers identify where additional demand would create constraints and where future investments may have the greatest operational impact.
It can also support more realistic planning. The goal is not necessarily to build today for the highest conceivable future volume. Instead, processors can consider whether today’s equipment and line decisions provide reasonable options if production requirements change tomorrow.
Scaling An Existing Product Is Different From Adding A New One
Growth within protein-focused dairy can create at least two different manufacturing scenarios.
The first is relatively straightforward: demand increases for a product a processor already makes.
In that situation, the primary challenge may be producing more of the same product. Manufacturers can evaluate throughput, uptime, labor and bottlenecks to determine whether the existing process can support additional volume.
The second scenario is product portfolio expansion.
A manufacturer might introduce another package size, format or dairy product intended to address a protein-focused market opportunity. That can create different production requirements.
For example, moving into a new cheese format may involve different cutting or portioning needs. A new cream cheese or process cheese package could require different filling or packaging considerations. A new shredded or diced product may need to be incorporated into an existing retail or foodservice line.
The distinction matters because more volume and more product variety do not create the same manufacturing challenge.
One primarily asks, “How can we make more?”
The other asks, “How does this new product fit into what we already make?”
Understanding which question needs to be answered can help processors evaluate the production changes that may actually be required.
Automation Can Become More Important As Volume Grows
Growth can also change the economics of automation.
A manual process may make sense at one production volume and become less practical at another. As throughput requirements increase, repetitive handling steps can require additional labor and create opportunities to evaluate whether automation could improve the overall process.
Automation does not have to mean replacing an entire production line.
In some operations, a targeted improvement at a particular bottleneck may provide the additional capacity needed to support increased production. In others, the challenge may involve several connected stages of the line.
The important part is identifying where the constraint actually exists before determining the solution.
At HART, we work with food and dairy processors on equipment and integrated systems ranging from manual applications to fully automated production. The appropriate level of automation depends on the product, production requirements and how each stage of the process works together.
Looking at the complete line can help processors determine whether automation would address an existing constraint or simply move that constraint somewhere else.
Finished Product Format Matters
Protein demand is not limited to beverages and cultured products. Cheese already fits naturally into many protein-focused eating occasions, particularly when consumers are looking for convenient snacks, meal components or ingredients.
For cheese processors, the finished format can significantly affect production requirements.
Blocks may need to become smaller portions. Cheese intended for retail or foodservice may be shredded or diced. Process cheese can require casting, cutting, stacking and wrapping. Different finished products can therefore create very different production requirements even within the same broad dairy category.
That is another reason product strategy and equipment planning should be connected.
A manufacturer evaluating a growth opportunity should understand not only how much product it expects to make, but what that product needs to look like when it leaves the production line and how it will move through downstream operations.
Package size, product handling, case packing and other downstream requirements can become just as important as the processing equipment itself when production volumes or product formats change.
Planning For Growth Without Predicting It
Current protein data provides a useful snapshot, but manufacturers still need to make investment decisions based on their own customers, products and production forecasts.
No consumer trend guarantees that an individual product will grow indefinitely.
That makes scenario planning useful.
Instead of assuming one growth rate, processors can consider several possibilities.
What would production look like if volume remained relatively stable? What if demand increased moderately? What if a product gained a major new customer or distribution channel? At what point would another shift, additional equipment or greater automation become necessary?
Those scenarios can help manufacturers identify thresholds for future investment.
They can also help avoid two opposite problems: investing too aggressively based on a short-term trend or waiting so long that capacity constraints interfere with the ability to respond to sustained demand.
Planning for scalability does not necessarily mean designing every production line for maximum possible output on day one. It can mean considering how an operation could evolve if production requirements change.
Depending on the application, that could involve equipment capable of supporting different production rates, floor space that allows for future additions, or line configurations that can be expanded over time.
The objective is not to predict exactly what demand will look like years from now. It is to understand what options today’s decisions leave available for tomorrow.
Operational Readiness Matters Alongside Market Opportunity
Growth opportunities often receive attention because of market demand, but operational readiness can be equally important. Understanding where constraints exist today can help processors respond more confidently if demand increases tomorrow.
That starts with understanding the existing operation.
Where is capacity currently available? Which stages are approaching their limits? How much production time is being used for changeovers, sanitation or manual processes? Can downstream equipment keep pace if upstream production increases? Which investments would address an actual constraint rather than simply adding more theoretical capacity?
Those questions can provide a more useful foundation for production planning than trying to predict exactly where a consumer trend will be five or ten years from now.
Protein-focused dairy provides a timely example, but the underlying principle applies to many growth opportunities. Market demand can create the opportunity. Operational readiness helps determine how effectively a processor can respond to it.
What This Means For Dairy & Cheese Plants
Capacity Planning: Growing demand can make it important to understand actual available capacity across an entire line rather than relying solely on maximum equipment speeds.
Bottleneck Identification: Increasing throughput at one production stage may have limited impact if downstream operations cannot keep pace.
Automation: As production volumes increase, processors may find opportunities to evaluate repetitive or labor-intensive stages of an existing process.
Scalability: Production planning can consider how equipment and line configurations could accommodate realistic future changes without requiring maximum capacity immediately.
Product Portfolio Decisions: Increasing the volume of an existing product and introducing a new format create different manufacturing requirements and should be evaluated differently.
Scenario Planning: Considering multiple demand scenarios can help processors identify when additional shifts, equipment or automation may become necessary.
Planning For Your Next Stage Of Production
Market opportunities ultimately have to translate into production capabilities.
Whether you’re increasing output of an existing dairy product, introducing a new format or evaluating how automation could support future capacity, understanding the complete production process is an important place to start.
At HART, we work with food and dairy manufacturers on standard and customized equipment for cutting, filling, shredding and dicing, Slice on Slice production, conveyance, robotics, product handling and integrated processing and packaging lines.
Contact HART Design & Manufacturing to discuss your current production requirements and future equipment needs.
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