• The rise of non-dairy

The rise of non-dairy

In 2014, LRF Mjölk, a Swedish dairy lobby, filed a lawsuit against non-dairy milk producer Oatly for disparaging milk in its publicity materials. For example, in its advertisements, Oatly describes its blend of oats and water as “like milk, but made for humans” while slogans like “No milk. No soy. No badness” emblazon its product packaging. Although LRF Mjölk won the legal fight in the end, Toni Petersson, CEO of Oatly, said the lawsuit had worked to their advantage as more people were made aware of the devastating effects of dairy milk on the environment, health and animal ethics. A year after the lawsuit, Oatly saw a 37% increase in their revenue. Petersson has even set up an online store selling merchandise with the tagline “We are the post-milk generation.”

The global sales figures of non-dairy milk somewhat affirm the “post-milk generation” tagline. After all, according to a report released by Grand View Research, worldwide sales of non-dairy milk reached USD8bn in 2015. In fact, global revenue is projected to reach USD35 bn in 2024. Touted as more environmental-friendly and compassionate choices, non-dairy milk alternatives may even see a bigger demand because of technological advancements – modern processing techniques can rid the non-dairy milk of the beany flavor, which some people are not too keen about. In addition, increasing production volumes of the plants that the non-dairy alternatives are derived from means that their prices will decrease. Thus, the difference in price between dairy milk and non-dairy milk will be narrower, which will give the former an edge.

The rise of non-dairy milk is due to the fact that the products are marketed much more about health and wellness benefits. People concerned about animal welfare shift to non-dairy milk completely for obvious reasons. Nowadays, as most consumers are more receptive and embrace new products, they in fact make choices based on taste – according to Financial Times’ article titled “Big business identifies appetite for plant-based milk’, research conducted by Mintel earlier this year found that “of those who had drunk non-dairy milk alternatives, 90% had also consumed cow’s milk.” For some consumers, non-dairy milk is another option on the market. Therefore, the well-being of cows and the planet aside, the taste of plant-based milk holds the key to attracting this particular group of customers.

While the sales figures look promising for the non-dairy industry as a whole, the competition among the various plant-based milk will be more fierce than ever with newcomers entering the market. A traditional staple of East Asian cuisine, soy milk has been and is still the most popular non-dairy alternative on the market. Nutrition-wise, not only does it have a similar protein content as dairy milk, but it also appeals to people who cannot consume milk because of lactose intolerance. According to Grand View Research, the global soy milk is likely to grow at a CAGR of 16.4% in terms of volume and 15.7% in terms of revenue. On the other hand, almond milk is the rising star in the non-dairy milk industry and its growth has been nothing but explosive – its sales more than doubled in 4 years. In 2013, the volume of almond milk sold all over the world stood at 650.7 Kilo tons and it is estimated to reach 1,400 Kilo tons by 2017. What is more, the biggest growth for almond milk is projected for the Asia-Pacific region, at a highest CAGR of 22.6% from 2013 to 2024 as its population switch to almond milk for health and wellness reasons. On the contrary, the growth is anticipated to slow down a bit in North America. Other plant-based milk such as rice milk and oat milk has also seen a steady increment over the past few years.

As more and more people embrace non-dairy milk, the demand for dairy-free products, such as cheese, butter and ice cream, has also been growing. Daiya is undoubtedly the pioneer in this particular industry as it has a comprehensive product portfolio including cheese, cream cheese, pizza and cheesecake. Danone’s acquisition of WhiteWave, a food and beverage company with brands such as Vega, Silk, So Delicious and Alpro, shows that Big Foods are recognizing the growth of the plant-based market. Danone, most well-known for its fresh dairy products, has even put up the acquisition presentation deck on its official website, stating the benefits of non-dairy over dairy, such as less land and water use, lower carbon emissions and better nutrition.

Mark Driscoll, Head of Food at Forum for the Future, poses a question about the prospects of the non-dairy industry, “Will [it] be able to demonstrate the long-term health and sustainability benefits of these products, in a way that continues to drive changes in both product innovation and consumer behaviors?” Whether non-dairy milk can be such a profound change-maker remains to be seen, but one thing is certain – the rise of non-dairy milk comes at an opportune time when more and more people look for food and beverage choices that are less damaging to the environment yet taste equally, if not more, agreeable than existing products.

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