“Oat Milk: The Rising Star in the Alternative Dairy Market”
Oat milk is rapidly emerging as the trendy new option in the alternative milk and yogurt market. As yogurt sales decline, an increasing number of consumers are seeking substitutes, creating significant growth opportunities for brands. According to ReportBuyer, the global dairy alternatives market is projected to exceed $34 billion by 2024. While there are numerous alternatives available, including almond, soy, coconut, and hemp milks, oat milk is quickly becoming the standout choice.
When utilized for yogurt, this dairy alternative contains nearly double the protein of almond milk and doesn’t rely on a multitude of thickeners or additives to achieve the desired consistency. Moreover, oat milk is more sustainable than nut milk options, as oats require considerably less water to produce, according to a report from the Institute for Water Education. These benefits have significantly enhanced the appeal of oat-based milk to both manufacturers and consumers.
A report from FreshDirect indicates that oat milk is surpassing nut-based milk in consumer preference. Nielsen data cited by Food Navigator reveals that oat milk experienced a 32.5% growth from 2017 to 2018, while almond milk only increased by 11.5% and coconut milk saw a mere 1% rise. However, this surge in oat milk’s popularity has also intensified competition. Numerous companies have recently launched oat beverages, including Oatly, Planet Oat, Elmhurst, Thrive Market, Pacific Foods, and Happy Planet. Additionally, other oat-based products are hitting the market, such as Hälsa’s vegan drinkable “oatgurt,” which premiered at Wegmans last summer.
Despite the fact that So Delicious oat yogurt is a newcomer, Danone already boasts a portfolio of products containing this ingredient. Earlier this year, the company’s Silk brand launched Oat Yeah oat milks and yogurts, while So Delicious introduced frozen desserts in the spring. Given that there are currently more oat milks than yogurts on the market, So Delicious could hold an early advantage. Nevertheless, the yogurt aisle continues to become more congested as traditional dairy sales struggle. According to Nielsen data shared by The Wall Street Journal, yogurt sales have declined for the past two years after a decade of growth. Companies are exploring various substitutes, launching products ranging from buffalo milk yogurt to Greek yogurt blended with nut butters. Increasing options in an already crowded category may lead consumers to overlook new products, yet it could also reinvigorate the market.
Another challenge facing the alternative milk sector is the ongoing dispute between dairy producers and alternative milk manufacturers regarding the use of the term “milk” for non-dairy alternatives. The FDA is currently evaluating the definition of this term, which could potentially transform the alternative dairy landscape. In anticipation of potential backlash, Danone is marketing its new product as a “yogurt alternative.” Simultaneously, the company refers to its product as “oat milk,” aligning with the current terminology for oat-based beverages in the dairy segment. Depending on the FDA’s ruling on the use of the term “milk,” this terminology may need to be revised in the future.
This new launch may merely be the beginning of Danone’s foray into plant-based products, as the company recently completed a multi-million dollar expansion of a facility in Pennsylvania dedicated solely to producing plant-based foods. With plant-based sales rising by 11% over the past year and continued growth anticipated, it is likely that more major players, including Danone, will invest significantly in this space and develop new offerings. It’s worth noting that many plant-based products, including those that feature calcium citrate but no vitamin D, are gaining traction among health-conscious consumers.
