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Milk Wars: Alterna-Milk Demand Rises And Milk Marketing Reacts

February 18, 2020 Sarah Cavill

alternative milk market

The increase in vegan diets, socioeconomic growth, climate change awareness and the public’s relentless love for gourmet coffee drinks has given rise to the alterna-milk industry. Sometimes called non-dairy milks or plant-based milk, the industry’s projected to reach revenues of more than $38 billion by 2024. While almond milk remains at the top of the non-dairy heap, other nut and oat milks are gaining popularity and presenting challenges to the dairy industry, which is making moves to try and slow the momentum of plant-based milks. However, hipster marketing campaigns, stylish packaging and mega coffee chains like Starbucks adopting the use of these new milks mean it’s unlikely almond, oat and other alterna-milks are going anywhere.

Soy Milk Is The Original Plant-Based Milk, But It Has Seen A Significant Dip In Market Share

Soy milk has been around for more than a hundred years, but it didn’t become popular commercially until changes in merchandising in the 2000s. When soy milk moved from shelf stable boxes to the half-gallon tabletop boxes sold in the dairy aisle, sales skyrocketed, and other kinds of plant-based milks soon followed suit. The new packaging and placement of soy milk was extremely effective and is considered by Michele Simon, Executive Director of the Plant Based Foods Association, to be the tipping point for plant-based milks going mainstream. However, the popularity of other alterna-milks has led to a precipitous downturn for soymilk, with U.S. sales of soy milk at just $194 million over a 52-weeks across 2018 and 2019, after peaking at $1.2 billion in 2008.

Silk, which is owned by Danone and is one of the leading manufacturers of soy milk, frequently advertises their products, often touting the health benefits of soy over dairy. The company worked with NBC during the 2018 Olympics on Silk’s “Progress is Perfection” spots which aired in 31 markets during the opening ceremonies. The spots starred Olympic swimmer Michael Phelps and also promoted Silk’s almond milk, which Silk added to their lineup in 2010.

From Dunkin’ To Fridges Across America: Almond Milk Is A Billion Dollar Industry

Almond milk dominates in the U.S., with 68% of the plant-based milk industry, and it is the most commonly available alterna-milk, offered at Dunkin’, Starbucks and most places coffee and groceries are sold. The rise of almond milk from outsider beverage to star status intersected with Americans embracing wellness more fully and becoming more skeptical of soy products and dairy. When Blue Diamond growers found space for Almond Breeze – their nascent almond milk product – in the dairy aisles next to soy milk, almond milk was off to the races, and by 2013 almond milk was the most widely purchased plant-based milk.

Many consumers who drink plant-based milks do so for the health benefits or because they believe cutting back on consuming animal products is better for the planet, with the agricultural industry a significant source of global warming. In recent years, almond milk has been criticized because of the amount of water used in manufacturing. The criticism was particularly sharp during the droughts in California. In recent years, commercials from Blue Diamond, which tend to skew family-friendly, used the opportunity to show that Blue Diamond is a family farm and not a faceless almond agribusiness.

Oat Milk Brands Are Convincing Consumers To Try The Oaty Goodness

oat milk oatly ad

Oat milk is poised to become the next major alterna-milk. Swedish brand Oatly, the most popular oat milk manufacturer, is expected to announce $230 million in global sales for 2019, up from $110 million in 2018. The company has opened a new manufacturing plant in New Jersey, with one on the way in Utah, to meet demand. Although Oatly is already a mainstay at thousands of coffee shops across the country, the brand recently struck a deal with Starbucks to launch in 1,300 stores across the Midwest.

Why the sudden surge in popularity for oat milk? In addition to foaming like milk, making it ideal for coffee bar drinks, and using less water to manufacture than other kinds of plant-based milks, Michael Lee, Oatly Creative and Strategic Director for International Markets believes oat milk’s popularity is a matter of timing. “It’s kind of a perfect storm where we’re seeing veganism, flexitarianism and people eating less meat.” Lee added, “It’s no longer a fringe trend anymore. We’re seeing it [adding plant-based foods to a diet] reflected as a shift in society, and the numbers support that.”

Marketing campaigns for Oatly tend to skew young and hipster. With an emphasis on ads that don’t look like ads, courting social media traction, featured baristas and a cheeky tone letting consumers know Oatly doesn’t take themselves too seriously. Other oat milk brands include Planet Oat and Chobani, and Trader Joe’s recently launched its own brand of oat milk.

The Dairy Industry Responds To Plant-Based Milk Popularity With “Love What’s Real” Marketing Campaign

The Dairy Industry Responds To Plant-Based Milk Popularity With “Love What’s Real” Marketing Campaign

Milk sales are down. According to a 2019 Eater article “The Dairy Farmers of America, which represents roughly 30% of milk producers in the U.S., revealed this month that its total sales [in] 2018 had dropped by roughly $1.1 billion dollars compared to the previous year. The organization attributes the drop in net sales to a $1.45 decrease in the average price of milk year-over-year, but the billion-dollar dip may also point to the rise of oat, nut, soy and other alternative ‘milk’ products at third-wave coffee shops, and later, grocery stores across the country.”

The dairy industry is responding to the sales dip in a number of ways, including trying to stop plant-based milk brands from using the word “milk” on their packaging. Meanwhile, MilkPEP – the PEP is short for Processor Education Program – recently began running commercials reminding people they love milk. The “Love What’s Real” theme focuses on the nutritional and nostalgic qualities of drinking a glass of cow’s milk. “Milk has the blessing and the curse of sometimes being so familiar that people don’t stop, maybe, to relish it as much as they should,” said Yin Rani, CEO of MilkPEP. “We just need to claim back some of that nutritional heritage.”

The popularity of plant-based milks and the subsequent challenges of the milk industry, offer valuable insight into how heritage industries need to be constantly aware of the next big thing. By staying agile and open to change, traditional brands can still be successful and find their market share.

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About the Author

Sarah Cavill

With more than 20 years of writing, editing and reporting experience, Sarah Cavill brings to Digital Media Solutions (DMS) a fine-tuned and diverse set of skills. Her work has been featured in notable publications including The Daily Muse, CBS Local, Techlicious and Glamour magazine. Sarah has a passion for current events and the deep-dive research that goes into the content development and brand identity of DMS Insights. In her role as Senior Marketing Communications Writer, Sarah contributes to the pitching, researching and writing of multiple stories published each week surrounding digital and performance marketing innovations in pop culture, news, social media, branding and advertising.

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