Milk alternatives make a splash, hurting dairy milk’s bottom line

14-Dec-2016 - Last updated on 15-Dec-2016 at 09:37 GMT

The milk alternatives market is projected to nearly double by 2019, according to BCC Research. ©iStock/ AlexPro9500

Milk alternatives are going through increasingly robust growth, according to BCC Research data, and sales of dairy-free beverages are expected to hit nearly $10.9bn by 2017, representing a CAGR of 13.3%.

US beverage milk sales stand at about half of what they once were in the 1980s, but fast forward to 2016 and many household refrigerators no longer include dairy milk. What has taken conventional milk’s place is milk alternatives like almond, rice, and soy milks.

BCC Research says the rise in consumption of milk alternatives can be attributed to a major shift in diet preferences such as veganism, dairy-free alternative diets driven by health concerns, lactose intolerances and other dairy allergies.

People prefer plants

"More consumers may be choosing plant-based options either because of personal preference or because of recommendations from health or nutrition professionals," says BCC Research analyst Shalini Dewan.

A recent survey by Pollock Communications in partnership with Today’s Dietician asked 1,700 registered dieticians (RDs) what they thought the biggest food trends were for 2017 and 59% of RDs said consumers are choosing to “eat clean” by incorporating more plant-based food and beverages.

"Consumers continue to seek plant-based beverages. At the same time, they are becoming more interested in plant-based options for milk that offer great taste combined with the nutrients that can be found in cow's milk. According to a survey of the American Dietetic Association in September 2012, 87% of dietitians recommend a plant-based diet to some or most of their patients and 70% of those dietitians say that a plant-based diet is nutrient rich."

Almond takes the lead in rate of growth

BCC Research compared growth figures on the three largest milk alternative category: soy, almond, and rice milks. Of those three milk alternatives, almond milk is expected to grow at a CAGR of 15.8% to reach $1.8bn in 2019, compared to $886.8m in 2014.

Soy milk represents the largest portion of the milk alternatives segment, accounting for $4.4bn, but it will grow at slightly slower pace of 12.5% CAGR, reaching $8bn in 2019. The third largest category, rice milk, is projected to have a five-year CAGR of 14.4% to $571.9m in 2019, up from $291.8m in 2014.

Other milk-alternative categories such as coconut milk, oat milk, and hemp milk are still in their infancy, BCC Research said, but are expected to keep up with the pace of almond milk, growing at 15.9% CAGR.

Asia-Pacific held the highest market share (50.4%) of the global milk-alternatives market in 2013. The North American market held the second-largest share (30.6%), with the Europe, Middle East and Africa (EMEA) market accounting for remaining 19% market share.