It’s the golden age of beverage innovation. It’s time to premiumize milk.

This is a golden age of beverage innovation in America, according to market research firm Packaged Facts. This is thanks to a desire for more healthful products with cleaner labels; the emergence of new ingredients, production processes and technologies; and the coming of age of millennials as the dominant consumer demographic, a group that is adventurous when it comes to trying new things. After decades of being a rather staid business dominated by only a few major, national brands that were slow to innovate, this confluence of modern trends has unplugged the innovation pipeline for the beverage industry. This includes fluid milk processors, especially those with a strong local consumer base.“Ideas are flowing like perhaps they haven’t in decades, if not a century. Indeed, until recently the beverage industry had remained untouched by radical transformation. That is not the case any longer,” says David Sprinkle, research director at Packaged Facts. “Innovation is touching every aspect of the beverage industry today, and there is a lot more on the horizon.” Now’s the time to get creative with milk, in terms of both flavor and package. Retail sales data from IRI provided to Dairy Management Inc., and courtesy of the Midwest Dairy Association, for the first quarter of 2017, show that flavored milk sales were up 3.5%. Whole-fat milk sales were also up (3.3%), as was lactose free (12%). These three formulations continue to be bright spots in the fluid milk category, as are more niche value-added segments, including refuel milk (up 21.9%). What the data from the first quarter also showed was that the retail decline for overall fluid milk was a bit more pronounced than we have seen in the past two years, with sales down 3.3%. Volume leader, white gallon milk, is driving overall fluid milk declines.Other IRI data show that the volume of flavored milk sold through retail grew 15.8% between 2014 and 2016 and growth is continuing in to 2017. Flavored milk currently accounts for 10.5% of milk through all channels and 5.6% at retail. Four in 10 households purchase flavored milk during the course of a year. Flavor innovations and value-added formulations may entice more households to give flavored milk a try.