Is non-dairy milk poised to outpace dairy milk? Maybe not, Mintel suggests

27-Apr-2016 - Last updated on 29-Apr-2016 at 08:00 GMT

Dairy milk sales slow down, as non-dairy milk gains traction.

Dairy milk may be nearing its maximum sales growth as more and more consumers are swapping out cow’s milk for non-dairy milks for both health reasons and personal preference, according to a new Mintel report.

“Non-dairy milks are no longer seen as primarily for people with dietary restriction or followers of vegetarian diets,” Mintel analyst Elizabeth Sisel told DairyReporter.

Instead, non-dairy milk is “becoming more mainstream as consumers see plant-based milks as a novel protein source.”

The report states that dairy milk sales decreased 7% in 2015 to $17.8bn and are projected to drop another 11% through 2020. Conversely, non-dairy milk saw 9% sales growth in 2015, reaching $1.9bn.

Mintel research also reveals that nearly half of Americans consume non-dairy milk, including 68% of parents and 54% of children under age 18. What’s more, 69% consumers agree that non-dairy milk is healthy for kids compared to 62% who agree that dairy milk is healthy for kids.

More room for non-dairy milk growth

“Dairy milk manufacturers are challenged with a higher percentage of consumers using dairy milk as an ingredient or food and drink addition than as a beverage to drink,” Sisel said. “Consumers do not drink milk like they do sparkling waters or sodas or other ready-to-drink beverages.”

Even though nine in 10 milk consumers drank dairy milk in the past three months, according to Sisel, that number is not likely to increase and the non-dairy milk market has greater opportunity for growth.

“The non-dairy milk category is relatively small in size compared to the dairy milk category, so it still has plenty of opportunity for growth,” Sisel said. “Dairy milk has likely maximized its consumer reach, which risks halting any substantial future growth in the absence of diversification.”

Mintel research indicates that product and ingredient innovation could lead to further adoption of non-dairy milk. In fact, 30% of Americans would be encouraged to drink or drink more non-dairy milk if it had more protein. One in five Americans would also be drawn to drink or drink more non-dairy milk with the addition of beauty benefits (e.g. skin, hair health).

Where dairy milk can compete

“While consumer trends are not favoring dairy milk, there are still opportunities for manufactures to re-engage consumers,” Sisel said, which include “developing innovative offerings that focus on improving already favorable aspects such as taste profile and nutritional value.”

Positive attitudes toward dairy milk’s freshness and nutrition is promising for the category as the top attributes consumers look for when purchasing dairy milk are natural (43%) and vitamin/mineral content (34%), while one in five (21%) look for organic options, driven by 28% of parents.

“It’s also important for brands to highlight that dairy milk is not just beneficial for bone health, but may also provide other benefits for consumers’ overall well-being as compared to non-dairy milk,” concluded Sisel.

According to the Mintel report, two thirds of consumers agree that dairy milk is naturally nutritious compared to 60% for non-dairy milk. In addition, consumers are more likely to agree that dairy milk is free of additives (81% vs 62% non-dairy milk). What’s more, 86% of consumers view dairy milk as fresh compared to 63% who agree non-dairy milk is fresh.