The global dairy product packaging market was valued at $34.5 billion in 2024 and is projected to reach approximately $51.96 billion by 2032, according to data from Towards Packaging.

For those in the dairy industry, a key factor in continuing to see growth rests in reducing costs at the packaging level.

Robert Khachatryan, chief executive officer and founder of Freight Right Global Logistics, noted there are numerous strategies to reduce packaging costs, including material optimization, process efficiency and reducing waste.

“Streamlining packaging processes through lean manufacturing principles can lead to significant cost reductions,” Khachatryan said. “Implementing continuous improvement practices can significantly decrease waste, allowing dairy producers to reallocate resources more effectively.”

Emerging trends in this regard include smart packaging and increased use of biodegradable materials, which will impact cost management.

For instance, Steve Rosas, a consultant with Omega Environmental, a firm that regularly works with food and beverage companies to streamline their supply chains and packaging processes, recently helped a large dairy producer transition from plastic jugs to shelf stable cartons in an effort to save money.

“By analyzing their filling and sealing equipment, we identified ways to upgrade and optimize their machinery,” he said. “New carton-specific equipment reduced material waste, lowered energy usage and decreased changeover time. Within six months, they cut packaging costs by over 15% per unit.”

Luke Sakovitz, associate director of packaging for cheese company Sargento Foods, noted the company’s packaging R&D team helps support Sargento’s annual cost savings goals by addressing a few specific needs.

“Typically, the procurement packaging team identifies a piece of business and compares pricing from our current supplier with other potential suppliers to determine if there is a cost incentive to move the business,” he said. “Our group would then lead the qualification of those materials from new suppliers in addition to downgauging or lightweighting initiatives to cut cost within active projects.”

Material matters

The choice of materials can also play an important role in reducing costs. Innovative materials such as lightweight, durable cartons contribute to cost savings, as well.

“Companies are reevaluating their packaging materials to find cost effective alternatives without compromising quality,” Khachatryan said. “For instance, switching from traditional rigid containers to flexible packaging can reduce material costs by up to 20% while also enhancing shelf life.”

Eric Lallart, CEO of Petit Pot, an Emeryville, California-based company known for its indulgent French desserts presented in single-serve glass jars, noted a change to the jars, as well as the introduction of paper-based cups made with more than 80% sustainable and renewable fiber, resulted in big cost savings for the company.

“Reducing the weight of our glass jars by 30% didn’t just cut costs — it also reduced our total carbon footprint by 10%,” he said. “Along with our 6 gram paper cups, we’re giving customers eco-friendly choices without compromising quality. These moves are helping us make a real difference for the planet, and while there’s an upfront cost, the long-term benefits for both the environment and our business are totally worth it.”

Serac Inc., a Carol Stream, Ill.-based company that specializes in the design and manufacture of liquid filling and capping machines, also builds equipment to fill jugs for milk, coffee creamer containers and whipped cream cans. Serac is seeing greater interest in biodegradable options when choosing materials.

The company recently introduced its LINEA XS for filling yogurt, dairy desserts and all things dairy in cups.

“The LINEA XS is a cup filler designed to align with the budgetary needs of medium-speed production, handling between 5,000 and 12,000 cups per hour,” said Nicolas Ricard, managing director of Serac. “This innovative machine features our cutting-edge advancements in hygiene, ergonomics and flexibility, all wrapped in a sleek design that simplifies both installation and everyday operation.”

This type of innovation has led to more of its dairy customers switching to paper cups or jars.

Photo: Serac Inc.

“We are focusing on using different materials, looking at the prices and moving to light-weight options,” Ricard said. “The weight of a bottle or cup is a direct impact on the cost, and there is a bit of engineering to do. Some of our customers prefer to make their own bottle locally to achieve a better price for their packaging.”

Sakovitz noted that all companies in the CPG industry are seeing more activity around Extended Producer Responsibility (EPR), and this ties into the right materials and cost savings, as well.

“This puts more responsibility on producers for the end-of-life of packaging,” he said. “Sargento is committed to ensuring that our packaging is ready for the future. In our latest Real Impact Report, we point to specific goals we’ve achieved, such as 100% of our Balanced Breaks snack trays are ‘check locally’ curbside recyclable. Also, 100% of our string and stick-cheese overwrap films are designed for recycling at in-store drop-off areas.”

Additionally, Khachatryan noted focusing on a consumer-centric design can also pay dividends.

“Developing packaging that meets consumer needs, such as resealable pouches or portion-controlled servings, can lead to increased sales and reduced returns,” he said. “Products with innovative packaging can see sales increases of up to 15%, highlighting the importance of aligning packaging design with consumer preferences.”

Role of automation

Automation, which reduces labor costs and improves efficiency, can also significantly lower overall expenses in the packaging operation.

“By automating repetitive tasks in the packaging portion, dairy companies can notably reduce overall production costs while reallocating human resources to more strategic roles within the organization,” Khachatryan said. “This shift not only improves productivity but also enhances employee satisfaction by reducing monotonous work.”

Serac has seen automation improve cost savings for several different dairy products, most notably milk, which often has excess go to waste on the line during the packaging stage.

“A lot of our customers are seeing there is a lot of savings that can be done on improving their factory, and if you have equipment that is more automated and can self-correct, it will increase efficiency,” Ricard said, explaining that it will result in more milk being on the shelves and not going to waste at the place of packaging.

The dairy industry is at a pivotal moment where innovative packaging strategies are not just a means of cost reduction, but also a pathway to greater sustainability and consumer engagement. By embracing practices such as material optimization, automation and eco-friendly sourcing, dairy processors can reduce their packaging costs while also aligning their operations with increasingly eco-conscious consumer preferences.