Milk is an inherently expensive raw material for use as a food. To compete in the new millennium, dairy products will need to be based on special values that can only come from milk. These include traditional dairy products and health-giving products. Designer milks will be needed to give new, enhanced products and to improve the quality and value of traditional products. The use of milk for traditional products is likely to continue to be strong in western cultures. For these products, key issues are naturalness of supply, with "organic" milk being an important issue, and low-fat products, which may imply a need for lower fat milk. Health products are the most exciting new area for milk-based products. A number of components in milk are being recognised as conferring health benefits. These include minerals (calcium), peptides derived from milk proteins (ACE inhibitor peptide) and lipid components (conjugated linoleic acid). A number of harmful effects have been attributed to milk, often by groups with a vested interest, and often based on dubious data. We have investigated claims relating to diabetes, ischaemic heart disease and hypercholesterolaemia and been unable to substantiate any harmful effect. Designer milks that are improved raw materials can be approached through various combinations of genetics (including traditional genetics, marker-assisted selection and genetic modification of dairy cattle) and by farm and feed management. Examples are presented. (C) 2001 Elsevier Science B.V. All rights reserved.