Big Soda knew it: behind its unglamorous image, ultrafiltered milk had solid appeal.
High in protein and low in sugar and lactose, ultrafiltered milk is well-aligned with wellness trends while also lending itself to high-growth convenience formats such as RTD drinks. With soda sales flat and declining, could cow’s milk offer an alternative growth avenue?
The Coca-Cola Company thought so.
Back in 2014, the beverage major partnered with dairy co-op Select to form Fair Oaks Farms Brands, LLC, “a health and wellness company that produces and markets premium quality, value-added nutrition products that start with the best milk”.
Fair Oaks’ flagship product was Core Power, a high-protein sports nutrition shake. The company would soon evolve into Fairlife; and Core Power would remain ‘core’ in its line of ultrafiltered milk products.
Consumers, too, continued to embrace the clean-label, premium milk offerings – pushing the segment into consistent double-digit growth year after year. Such has been the growth trajectory that in January 2020, Coca-Cola acquired the remaining shares in Fairlife for close to $1bn, becoming the sole owner of the category-leading player.
But today, Fairlife is far from the only kid on the block. Competition is hotting up, and formats are evolving fast.
Ultrafiltered milk: Pricier, but in great demand
Ultrafiltered milk’s USP is its superior nutritional content. It packs 50% more protein and 50% less sugar than regular milk while also being lactose-free.
For consumers, that combination appeals: the category forms just 7% of total milk dollars, but it is driving strong growth, with dollar sales up 14.8% and unit sales up 5.5% in the last year, according to Circana.
But in today’s US ultrafiltered milk category, dollar and unit growth is slowing, Circana’s Melissa Altobelli told us. That’s not a damning verdict for the category but rather a sign that it needs to evolve. Brands and private labels are already taking the next steps, backed up by emerging and long-term trends.
“Ultrafiltered milk has shown strong dollar and unit growth over the last three years, driven by Fairlife which accounts for 96% of dollars,” Altobelli told us. “Darigold FIT ultrafiltered is the next largest player, with sales more than doubling in the last year.
“We’ve seen several new entrants to the segment in the last year as well, including Byrne Dairy, DairyPure Milk50 and Pioneer Pastures.”
As for who buys these products, that’s upper-income consumers, Millennials, and younger families or those raising teenagers, Circana’s Altobelli said.
The category’s premium positioning – Fairlife milk is currently offered at a 190% premium per ounce compared to regular whole milk at Walmart, for example – is where both the challenge and the opportunity lies.
From value propositions to new formats: What’s next for ultrafiltered dairy?
Fairlife dominates the market; but other brands are entering this space, encouraged by stable demand in high-protein dairy and a premium price point.
Byrne Dairy majors on locally-sourced milk and its ultrafiltered product has gone “well beyond our expectations” according to CFO Thomas Chartland. The company has invested in filling and packaging lines as it seeks to expand its presence in the category.
Similarly, Dairy Farmers of America brand DairyPure is building a formidable Fairlife challenger with Milk50, which comes at a slightly lower price point.
And Pioneer Pastures is leaning on community-building as a key strategic pillar.
Private label brands are also coming to the fore, Altobelli told us.
“Private label shows strong growth in the last year, up 20%,” she said. “I would expect to see continued growth from private label as those brands have been fast-movers in the high-protein space overall, increasingly introducing products that rival or even outpace national brands. Retailers are investing in first to market innovation, whether it’s expanding into high-protein, or other functional benefits.”
Wellness trends propel the category
The health and wellness trend is a significant growth driver for ultrafiltered dairy – particularly as the filtration process enhances milk through processing rather than additives. “Consumers are avoiding foods with artificial ingredients in their diets including UPF, artificial colours and flavors, artificial sweeteners, preservatives and GMOs,” Altobelli said.
“With GLP-1 usage increasing, consumers are also seeking more protein and fibre along with less sugar and carbs in their diets.
“This evolving consumer perspective and increasing attention to labels is fuelling interest in ultrafiltered milk which provides more protein and less sugar, which makes it ideal for high protein diets and glycemic management; lactose-free, making it easy to digest for those that are lactose sensitive, and often provides 30% more calcium which aids in bone health.”
Formats are also evolving, Altobelli told us. “We do see the ultrafiltered process [being leveraged] in yogurt as well with Too Good and Oikos Pro, and some cheeses,” she said.
Regular milk still has plenty of life left
Aside from this premium category, fluid milk is also having a moment on the back of modern wellness trends. That’s significant, given decades of declines in consumption in the US.
“The dairy milk category as a whole is also benefitting from the health and wellness trends,” Altobelli said. “Unit sales stabilised in 2024 and 2025 after a decade long decline.
“Consumers are returning to dairy for high-protein content and better-perceived health benefits, with whole dairy leading the way.
“The updated food pyramid also supports spotlighting protein, full-fat dairy, and fruits and vegetables while reducing focus on whole grains.”
It’s an exciting time for the industry – and for those looking to enter the premium ultrafiltered dairy space, there’s plenty of growth headroom and format opportunities to tap into.
