Dairy-free milk is up 36 percent in 3 years and it’s not slowing down

While other parts of the plant-based food industry have fluctuated in recent years, dairy-free milk continues to command market share over its animal-produced counterpart. Over the past three years, sales of dairy-free milk have grown 36 percent at a compounded rate of 11 percent, according to data compiled by the nonprofit Good Food Institute and market insight firm Spins.

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So why is vegan milk still on the up and up?

“Plant-based dairy has grown tremendously in the past few years, and its growth is driven by consumer appreciation from those following allergen-avoiding diets, [and] who are concerned about the sustainability of the dairy industry,” Dan Buckstaff, chief marketing officer of Spins, told VegNews.

“There are many purchase drivers that are reshaping the non-animal dairy and plant-based dairy industry, as these products [driven] What matters is customer value and how it affects what they add to their cart.”

Why is vegan milk working so well?

The global dairy-free milk market, another market insight firm Grand View Research predicts, will grow at a CAGR of more than 14 percent between 2021 and 2028, with major companies such as Danone, Nestle, and PepsiCo already in action. sector

Buckstaff explained that the vegan milk category is outpacing other plant-based segments because the products are closer to their animal replacements.

California farm

Companies like California-based Califia Farms—which recently launched a line of oat and almond milks made with just three ingredients—are also quickly heeding consumer calls for smaller labels.

Products like vegan burgers and cheese are usually made to be as pleasurable and flavorful as possible to better compete with cruel and environmentally damaging animal products. However, consumers are now scrutinizing them through a health lens as well.

“In the alternative meat category, product differentiation is more significant,” Buckstaff said. “Plant-based meats, for example, have a lot of ingredients and flavors that don’t always appeal to consumers looking for clean label options. In terms of flavor and texture, some plant-based cheeses are still working to perfect these details to match dairy cheeses.”

“For consumers who are particularly flexible and choosing between plant-based and animal-based products, these differences are important in their decision making,” he says.

Beyond cleaning up its labels, the plant-based milk category remains popular as it expands beyond its soy, coconut, and almond roots to new bases like potatoes, sesame seeds, pecans, and more.

“From nuts to seeds to vegetables to oats, consumers have plenty of options to choose from, and this innovation has created long-lasting purchasing behaviors among shoppers,” Buckstaff said.

Oat milk makes a splash

Among the many vegan milk bases, oat milk is becoming a favorite in the sector, which has historically been dominated by almond milk. Last year, oat milk had a special year, with sales growing 50.52 percent, the largest overall increase in the category, which rose 6.4 percent to nearly $2.3 billion in the 52-week period through July 2022.

Otley

Oat milk is widely offered, including at Starbucks, and is now a default option at popular coffee chains such as Blue Bottle and Stumptown. So why is oat milk so popular?

“Oat milk was one of the first popular plant-based milks that was not made from soy or nuts and served as an alternative for plant-based consumers with common soy and nut allergies,” says Buckstaff.

“Some of its popularity can be attributed to sustainability concerns raised by plant-based consumers who are moving away from soy and nut milk due to excess water use, land use and emissions issues,” he says.

Buckstaff explained that ingredients in some oat milk formulations — such as oil and sugar — can be a concern for some consumers, and he expects innovation in the category.

“In the short term, oat milk will become popular among those looking for plant-based alternatives, but in the long term we expect a high level of ongoing innovation in this category that will shift share in favor of other alternatives – some emerging trends include corn and pea milk,” he said.

The future of dairy

As the climate crisis looms, the need to rethink the global food system is more pressing than ever – and consumers are demanding food companies clean up their carbon footprints. Traditional dairy milk producers, Buckstaff said, are working to incorporate more sustainable practices and relay environmental messages to consumers.

“The main changes we’ll see in the short term are an increase in messaging and offers around animal-based dairy products, much like we saw when organic products first hit the shelves, consumers will have more options to choose from. That matches their lifestyle,” he said.

Farm tomorrow

However, improving the carbon footprint of milk from resource-intensive animals is a tall order. Some innovators are now looking to take the animal out of the dairy and meat equation entirely, relying instead on biotechnologies like precision fermentation (a process that replaces animals with microbes in protein production).

“There are a lot of very exciting new technologies that have the potential to really disrupt our food system,” Buckstaff said.

A major player in the precision fermentation space is Perfect Day, which uses biotechnology to create animal-free whey that is now appearing in new dairy-like vegan milks, ice cream, sports nutrition products and more.

“While cultured and mycelium meat is advancing and could be very interesting in the future, I think precision fermentation around the dairy space is going to be the most disruptive in the next two years,” he says. “We’re already seeing items pop up on store shelves, including ice cream and protein powder.”

“Empirically speaking, this topic has also been at a variety of conferences, showing the depth of interest,” he says. “Product quality also seems to be better than other examples.”

Nestlé

Big companies also feel that the quality of products made with Perfect Day’s animal-free ash is superior. In recent years, Mars, Nestlé, and Bell Group (the French cheese giant behind real cheese brands Babybell, The Laughing Cow, and more) have explored animal-free dairy products in partnership with Perfect Day.

“Look for headlines around precision fermentation to grow this year with the opportunity to disrupt sales in 2024,” Buckstaff said.