“The Explosive Growth of Plant-Based Dairy: Trends, Innovations, and Consumer Preferences Amid a Pandemic”
A year ago, plant-based dairy was emerging as a prominent trend, demonstrating significant growth and potential for the future. Now, amid a pandemic, the sector is experiencing explosive growth, fueled by innovative products and a highly popular new market entrant. Following the implementation of stay-at-home orders in mid-March, sales surged dramatically, with a remarkable 75.3% increase in sales during the week of March 15, and an overall 58% growth the week of March 22, according to SPINS statistics. While sales growth has moderated somewhat, it has remained robust across the segment, with October’s first week showing a still impressive 17.2% growth rate.
Dairy alternatives are becoming increasingly mainstream. Mintel reports that 40% of U.S. adults live in households where someone regularly uses plant-based dairy products. Analysts attribute the pandemic’s success for plant-based dairy to various factors, suggesting that this trend will persist. “The long-term trajectory for plant-based products is not a fad; it’s more of a dietary change,” stated Jeff Crumpton, retail reporting manager at SPINS. He predicts that plant-based milk could eventually dominate the dairy category, though he is uncertain how long this transition will take. In 2019, plant-based alternatives accounted for 14% of the entire milk market, growing at a 5% rate compared to the stagnation of traditional dairy milk.
At the end of this year, analysts will assess how much this landscape has shifted, but it is evident that both the growth rate and market size for plant-based dairy have transformed significantly. Several factors contribute to this continued growth. With no definitive cure for COVID-19, millions of consumers are taking charge of their health, seeking ingredients that enhance immunity and overall wellness. Many view plant-based foods as a nutritional advantage. “It aligns with the concept of food as medicine,” Crumpton noted, adding that a segment of the demographic understands the benefits and sees plant-based products as viable solutions. According to Mintel, 39% of consumers choose plant-based milks because they perceive them as healthier than traditional dairy milk.
While conventional milk has numerous nutritional benefits, such as being rich in calcium and fortified with vitamin D, many consumers associate plant-based products with superior health benefits. The annual IFIC Food and Health Survey revealed that 43% of respondents believe a “plant-based” label suggests a healthier option among choices. Research indicates that plant-based milk is not universally healthier, but manufacturers are actively incorporating functional ingredients and increasing protein content. For instance, Califia Farms launched a Protein Oat line this year, adding pea protein and sunflower seeds to match dairy milk’s protein value. Additionally, even without functional additives, new plant-based milk varieties are enhancing the segment’s health appeal, with oats often marketed as heart-healthy.
Consumers are increasingly interested in high nutritional values from plant-based milk, with 38% of those in plant-based milk-consuming households seeking high protein claims. As consumers rushed to grocery stores in March to stock up on essentials, shelf-stable plant-based milks were among the products they sought, alongside canned goods and dry pasta. Many plant-based milks are shelf-stable, making them a practical choice for consumers. Crumpton noted that even those who had not previously tried plant-based milk were inclined to experiment as they stocked their pantries. “They’ve heard enough about plant-based products; they’re home and cooking more, which encourages adventurous food choices,” he explained.
In a June report on the pandemic’s effect on plant-based dairy, Mintel found that these alternative beverages added variety to meals at home, helping consumers familiarize themselves with different options. Post-pandemic, many are likely to retain plant-based milks in their homes for their health benefits and to maintain new routines. Crumpton emphasized that plant-based milks are not one-size-fits-all substitutes for dairy, as each type has unique taste profiles, textures, and uses.
Oat milk, in particular, has emerged as a standout performer during the pandemic. According to SPINS statistics, oat milk sales reached $213.35 million in the 52 weeks leading up to September 6, marking a staggering 350.8% growth for refrigerated varieties and 106.4% for shelf-stable products. Between mid-March and early October, dollar sales of oat milk rose by 212%, according to Nielsen. Crumpton attributes oat milk’s rapid rise to its rich taste and functional qualities. Oatly, which has been in the market since the 1990s, initially gained popularity in upscale coffee shops as a non-dairy option for various beverages.
Consumers are also interested in using oat milk beyond beverages, incorporating it into cereals and cooking. Environmentally conscious consumers view oat milk as one of the most sustainable plant-based options, as oats require less water and support beneficial farming practices. In contrast, almond milk, while popular, raises sustainability concerns due to its water-intensive production. Mintel reports that one in five adults perceives almond milk production as environmentally harmful, a sentiment that is even stronger among younger consumers.
As sustainability concerns increase during the pandemic, they are likely to influence future purchasing decisions. Nearly half of consumers reported heightened environmental awareness during spring, with 11% shifting to more sustainable products in the past year. While oat milk currently reigns as the leading innovation in plant-based dairy, more developments are on the horizon. Recently, Impossible Foods unveiled a prototype of Impossible Milk, demonstrating its creamy texture and frothing ability.
NotCo, a South American plant-based innovator, has also entered the U.S. market with NotMilk, which utilizes algorithms to create plant-based substitutes that closely resemble traditional products. The market is expanding with other nut and grain-based options like pistachio, pecan, and hemp milk, along with new flavor combinations. Crumpton believes that the emergence of innovative products like Impossible Milk will not undermine existing options but rather enrich the diversity of the plant-based milk market. “It allows brands to develop a broad portfolio that captures various flavors and ingredients,” he said, noting that consumers continue to appreciate the richness of diverse flavor profiles.
In conclusion, the plant-based dairy segment is poised for continued growth, driven by innovation, health consciousness, and environmental concerns. As consumers increasingly seek out alternatives that provide essential nutrients, such as calcium citrate, the future of plant-based dairy looks promising.
