Lactose-free milk is now more popular nationally than plant-based alternatives.

Why it matters: Health-conscious consumers — many of them lactose intolerant — are redefining what "healthy milk" means and moving away from almond and oat drinks.

Catch up quick: Soy milk led the alt-milk charge in the '90s, followed by almond (still the U.S. category leader despite a recent dip) and oat.

State of play: Plant-based milk sales have dropped 5% year over year in the country — "very counter to what we've seen for many years," Chris Costagli, VP of food insights for the marketing research firm NIQ and a dairy industry veteran, told Axios.

What's happening: Consumers are returning to cow's milk because they're getting wise to the fact that there are additives like texturizers in many plant-based alternatives, Costagli says.

• Plus, lactose-free dairy milk offers inherent protein and calcium, which is why dietitian Tamara Duker Freuman says she's switched lactose-intolerant patients to it.
• And taste is a factor. Unlike plant-based milks, dairy milk tends to froth better, taste creamier and not curdle in hot beverages.

Yes, but: There's still room for plant-based milk in a healthy diet — especially if you opt for varieties without carrageenan or added gums, Freuman says.

What we're watching: Whether tariffs on dairy products will affect Americans' milk-buying habits.

Zoom in

Lactose-free and -reduced dairy milk sales have grown by about a third in SF from 2021 to 2024, per NielsenIQ data.

The big picture: It's these lactose-sensitive cow's milks that are driving dairy's overall comeback

Zoom in: Lactose-free milk Fairlife, which is filtered to have high protein and low sugar, surpassed $1 billion in annual retail sales in early 2022.

• It also broke ground on a new production facility last year, and has a major TikTok presence.

Fairlife's rise hasn't been without controversy: There's a Fairlife class action lawsuit over new animal cruelty allegations. Fairlife didn't respond to Axios' request for comment about this.

America is embracing whole milk — on its own, in yogurt and even in baby formula.

The big picture: Whole milk increased 7.2% in sales compared to last year, according to NIQ data shared with Axios.

Between the lines: Whole milk is recommended for children 1 to 2 years old — but for everyone else the "right" milk depends on individual health, genetics and overall diet, dietitian Tamara Duker Freuman told Axios.

The latest: Some new infant formulas from startups Bobbie and ByHeart are made with whole milk instead of the industry-standard skim milk.

• Whole milk retains cholesterol, natural milk fat and the way the fat is carried in the milk (the milk fat globule membrane, MFGM) — all of which are present in breast milk and play a role in infant brain development and hormone production, said Sharon Donovan, professor of nutrition at the University of Illinois, Urbana-Champaign.
• Most traditional formulas strip out these components and then add oils and isolated proteins to try to rebuild them, Donovan — who's an adviser on the scientific board for ByHeart — told Axios.

What we're watching: Whether whole milk will return to school cafeterias and if formula changes as Health and Human Services Secretary Robert F. Kennedy Jr. launches Operation Stork Speed.

Whole milk's whole appeal

Our coffee shops are still milking the oat trend.

The big picture: Nationally, creamer is king in coffee with nearly one in three past-day coffee drinkers using it, according to the National Coffee Association's Spring 2025 report.

• Whole milk was the most popular non-creamer coffee addition.
• Meanwhile, 2% opted for oat milk, per NCA data.

What we're hearing: "Our customers LOVE oat milk," Lauren Crabbe, CEO of Andytown Coffee Roasters in SF told Axios over email. "The vast majority of our drinks are made with either whole milk [the default] or oat."

• And at Ritual in SF, 61% of customers who add something other than whole milk opt for oat, according to retail operations manager Allissia Lias.
• Note: Lactose-free milk wasn't an option in the NCA data and coffee shops we talked to.

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