Dairy’s Comeback: Why Australians Are Ditching Plant Milks for Cow’s Milk Again

The return of dairy milk to shopping lists and cafe menus, after a decade of decline, isn’t a simple case of nostalgia. It’s a story about canola oil, cost pressures, and a renewed focus on “natural” foods, according to recent reports. For some, like cinematographer Gabriel Morrison, the shift came down to an ingredient list. After a decade avoiding dairy, Morrison found himself reconsidering milk after noticing the amount of canola oil in a carton of oat milk. “It’s [so much] canola oil and you imagine that in your glass, and imagine discovering that much olive oil, you’re like, that’s actually really gross,” he told The Guardian.

Morrison’s experience reflects a broader trend. Australians had steadily reduced their milk consumption from 100 litres per year in 2015 to 85 litres by 2025, as plant-based alternatives gained popularity. Soy, almond, and particularly oat milk, saw rapid growth during that period. Riverina Fresh, a supplier to cafes, saw plant milks increase from less than 10% of sales to 25% by 2023, with that figure reaching 50% in some inner-city locations, according to its executive chairman, Craig Shapiro.

A Cost Calculation

Although, the tide appears to be turning. Cost-of-living pressures are playing a significant role, with shoppers seeking discounts and saving money on everyday purchases. Shapiro notes that a 50c to $1 price difference between a dairy-based coffee and a plant-based alternative can be a deciding factor for consumers. While milk prices rose more than 20% over the past four years, they have stabilized recently, according to Rabobank senior analyst Michael Harvey. “The cost of all food has gone up, so consumers go back to basics,” Harvey says.

Supermarket milk sales, which had been shrinking in 2023 and 2024, grew by 1.1% in 2025, reaching just over 1.4 billion litres. Notably, nearly two-thirds of this growth came from cheaper, homebrand milk options, according to Dairy Australia data. This suggests price sensitivity is a key driver in the shift back to dairy.

Beyond Price: Protein and Perceptions of ‘Natural’

The resurgence of dairy isn’t solely about price. A boom in protein demand is also contributing, with consumers increasingly focused on fitness, and health. Bega Group, traditionally known for its cheese, now sees its future in milk and yoghurts – particularly those with added protein. The company is anticipating continued growth in this segment, expecting the trend to last at least five more years as demand expands beyond traditional fitness enthusiasts into older age groups concerned with maintaining muscle mass.

This protein fixation could be further fueled by the growing popularity of weight loss drugs like Ozempic, which can suppress appetite and lead to muscle deterioration. Bega’s CEO, Pete Findlay, estimates that over 10% of Americans are already using these drugs, with Australian usage approaching similar levels. “With that weight loss, we become more active and we want to maintain our muscle bulk,” Findlay says.

Plant Milk Revenue Slows

While plant milk producers saw revenues double from $600 million annually between 2015 and 2022, that growth has since stalled, according to analysis from IBISWorld. Milklab, an Australian brand offering both plant and dairy milk, acknowledges a slowing pace of growth, attributing it to a shift towards “natural” products like cow’s milk. “People are going back to meat. People are going back to dairy. [Some] consumers are a bit like, ‘well, I want less ingredients’,” says Michael Perich, Milklab’s CEO.

The Oil Question and Health Considerations

The ingredient list concerns raised by Morrison aren’t isolated. The presence of oils, particularly canola oil (also known as rapeseed oil), in plant milks has prompted scrutiny. However, nutrition experts are quick to point out that these oils aren’t necessarily harmful. Fiona Willer, CEO of Dietitians Australia, states that canola and other seed oils added to almond and oat milks are generally considered safe, despite concerns raised by some, including former Trump administration health secretary Robert F Kennedy Jr., who advocates for whole, unprocessed foods. TheSkimm reports that rapeseed oil offers several benefits beyond creating a creamy texture in plant-based milks.

Lactose-Free Options Expand the Market

A significant factor in dairy’s comeback is the increased availability of lactose-free options. An estimated one in three Australians believe they have some level of milk intolerance, according to a2 Milk CEO David Bortolussi. Sales of a2 Milk’s lactose-free products grew nearly 10% in the second half of 2025 compared to the same period in 2024, allowing individuals who previously avoided dairy to return to it.

What’s on the Horizon

The dairy and plant-milk sectors are likely to continue evolving. Dairy companies are focusing on value-added products like protein-enhanced milk and yoghurts, while plant milk producers are emphasizing taste and variety to maintain their niche. The interplay between cost, health perceptions, and consumer preferences will determine the long-term trajectory of both markets. Further developments in weight loss drugs and evolving dietary trends will also play a role in shaping consumer choices.