How Plant-Based Milk Is Impacting the Dairy Industry

As consumers, we're accustomed to having options, especially when we do our grocery shopping. We have many decisions to make as we navigate through the aisles, and the dairy aisle is no exception. Traditional cow's milk is just one conventional product that now finds itself competing against many plant-based alternatives. Plant-based products are changing the food industry, and there are several factors driving this shift in consumer decision-making. This blog reviews aspects of the plant-based trend and provides further insight into why consumers are shifting away from dairy.  

The modern-day consumer has endless amounts of information readily available to them. They are researching the products they buy, and they want to ensure they are making the right decisions for their health and the health of our planet. This increase in conscious consumerism is negatively affecting the dairy markets, with milk being hit the hardest.  

Throughout the past decade, many types of alternative dairy products have been introduced. Throughout this time, the source of plant-based milk has shifted in popularity as follows:

  • 2012 and before: Soy​
  • 2013 - 2017: Almond, rice, and nuts
  • 2018: Coconut ​
  • 2019: Pea​
  • 2020: Oat and other niche plants

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Plant-based milks offer their own unique, often earthy tastes.

Consumers shift to plant-based milks

Plant-based milks are taking over supermarket dairy cases. They are expanding at a 10% growth rate versus dairy milk’s 3% growth rate. The plant-based trend started with the launch of soymilk in 1996, but the trend picked up speed in early 2010 and has continued to grow and evolve ever since. Ten percent of the overall milk market now comprises plant, grain, and nut-based milks. Several factors are incentivizing consumers to embrace plant-based milks:

  • Health and wellness
  • Lactose intolerance and milk allergies
  • Taste
  • Sustainability and animal welfare

1. Health and Wellness

Modern-day consumers are focused on their long-term health, and they look for products to explicitly state their tangible health benefits. Calories and physical health are still important, but priorities have expanded to also include mental health. Consumers are looking for product claims to help with sleep, stress, cognitive function, muscle growth, and immunity, while avoiding ultra-processed products. They want clean labels with easily recognized ingredients, as these are perceived as healthier. When consumers understand the ingredient statement, they have greater confidence in the product and will be more likely to buy.

2. Lactose Intolerance and Milk Allergies

Consumers decreased milk consumption is threatening the success of the U.S. milk category. This reduction is driven by veganism, allergies, and lactose intolerance. Reportedly, almost 70% of the world's population is lactose intolerant. This provides plant-based companies with excellent growth opportunities when they offer a lactose-free claim.

3. Taste

Consumers are shifting their diets to focus on their health, and they are willing to make compromises, except when it comes to taste. People still want to enjoy what they are eating or drinking. They are very interested in trying new things and experiencing new flavors, and plant-based milks offer their own unique, often earthy tastes. They come in different flavors such as chocolate or vanilla, but the most popular plant-based milk is plain/unflavored.

4. Environmental Focus

Consumers want to buy brands that put people and the planet first. They are looking at the bigger picture and want to invest in brands that have a positive impact on our environment. All product attributes are being scrutinized, including packaging and resources used in manufacturing and sourcing of raw materials. Plant-based milks need to convey a uniform, transparent story throughout the entire supply chain. Transitioning to plant-based products offers a sustainably sourced product with recyclable packaging. Plant-based milks have a much lower environmental impact on emissions, land use, and water use when compared to dairy milk. Furthermore, they are typically packaged in sustainable cartons, not plastic. Plant-based products must deliver on consumer expectations for brand transparency and naturalness. The claims on plant-based products are unlimited—the more, the better. Low/no-sugar, high-fiber, high-protein, non-GMO, lactose-free, allergen free, organic, ethically sourced, etc. 

Oat milk – the latest and greatest

The popularity of oat milk began to rise at the end of 2019 and has continued to grow ever since, currently holding the title of the most popular plant-based milk. Its popularity is attributed to its pleasant, sweet, and creamy taste and texture. Of all the plant-based milks, oat milk is most comparable to traditional dairy milk. Consumers like that the product tastes like dairy milk but comes from plants. This similarity to dairy milk may appeal more to flexitarians in particular. A flexitarian is a person whose diet is primarily vegetarian in nature, but they will occasionally eat meat or fish. A flexitarian lifestyle is more popular as opposed to strict veganism, as only 9% of U.S. consumers follow a dairy-free lifestyle. These consumers like that oat milk taste like dairy milk but come from plants.  

It's no surprise that oat milk has acquired its popularity. It offers what the consumer wants: a product that is healthier, good for the environment, has great texture, and tastes delicious. The only downside to this almost perfect product is its sugar content. Oat milk is high in sugar; even so, this hasn't quite deterred its fan base. Oat milk is still the most popular option among the vast array of plant-based milks.

Navigating the trend

The options in plant-based milk keep expanding, and the next big trend is out there waiting to launch. It may be hemp, cashew, or the newly introduced dairy/non-dairy hybrid products. Essentially, continuous innovation is key to success in the dynamic, constantly evolving food and beverage industries.

Univar Solutions is here to help you navigate these trends. Our team of food scientists, chefs, and product managers are readily available at our Solution Centers and test kitchens to partner with you on your plant-based projects. We can provide you with in-depth market overviews, ingredient recommendations, and formulary support. 

Learn more at Foodology by Univar Solutions »

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