Given customers’ optimistic view of dairy and dairy options, the marketplace for each classes proceed to stay secure, specialists observe.
“The most effective of each worlds” is how Julia Mills, foods and drinks analyst at Mintel, Chicago, describes customers’ view of dairy and non-dairy milk in Mintel’s August 2024 government abstract report titled “Milk and Non-Dairy Milk – US, 2024.”
The report notes that the gross sales of each dairy and non-dairy milk drinks are regular.
“Gross sales of each dairy and non-dairy milk are anticipated to stabilize as customers search to fulfill their assorted wants by selecting merchandise from each segments,” it states. “Enhanced manufacturing methods and formulations for each sorts of milk are anticipated to proceed driving the class’s development.”
Milk has remained a staple in households, even when the kinds chosen have modified as customers see the advantages of each dairy and non-dairy choices, the report provides.
“Neither will disappear, shifts in consumption will proceed, pushed by well being, environmental sustainability, and private food regimen selections,” it reads.
Mintel’s report additionally notes that manufacturers have blended minimalism and maximalism in innovation.
“Dairy and non-dairy manufacturers navigate the innovation spectrum,” it states. “Some prioritize well being advantages, providing high-protein choices or added flavors, whereas others give attention to minimalism, that includes new components and easy elements.”
Each approaches can succeed, the report suggests, however the advantages have to be clearly communicated. Mintel’s abstract notes that the dairy milk class has skilled little change. The class is constant because of its familiarity and well being advantages, however its gross sales have felt shifts in client curiosity in options.
Mintel’s report estimated that the worth change of dairy milk gross sales over 2023 and 2024 to have decreased by 1.2%.
“When choosing dairy milk, customers weigh a number of components, with worth as the first consideration, highlighting the significance of worth,” the report states. “However, distinctive attributes like well being advantages or longer shelf life can justify the next worth for some customers and make manufacturers stand out on-shelf.”
The abstract additionally notes that customers’ values have shifted and boosted specialty milks.
“Shoppers are extra prepared to spend money on milk that matches their private values and way of life selections,” it notes. “Improved monetary conditions mixed with a altering outlook on well being, wellness, and sustainability largely drive this development. This shift has spurred a rising demand for premium, specialty milks, equivalent to grass-fed and high-protein.”
In response to knowledge from Chicago-based Circana, the general dairy milk class noticed a gross sales enhance of 4.3%, totaling $17.5 billion in complete U.S. multi-outlets with comfort shops for the 52 weeks ending April 20. In the meantime, unit gross sales have been up 0.3% for a similar time interval.
John Rodwan, editorial director at Wintersville, Ohio-based Beverage Advertising and marketing Company (BMC), famous in Beverage Trade’s November 2024 subject that the decline of fluid milk quantity is a long-standing custom. The phase declined in 2023 and is predicted to this yr as effectively, he defined.
“Quantity fell under 5 billion gallons for the primary time in reminiscence in 2022 and has edged downward subsequently,” Rodwan shared. “Per capita consumption stood simply above 14 gallons in 2023 — down by nearly 2 gallons from 5 years earlier. Gross sales did enhance, reflecting the pricing surroundings.”
Dairy drinks face a large number of challenges, he added.
“To a big extent, milk has misplaced its picture because the quintessential wholesome, healthful beverage,” Rodwan defined. “Loads of different drinks provide the calcium and nutritional vitamins milk comprises. Developments in dairy and options more and more make them viable substitutes for milk the place milk-like liquid stays sought-after, equivalent to in espresso drinks.”
John Crawford, senior vp of consumer insights and dairy at Circana, famous in Beverage Trade’s November 2024 subject that the liquid dairy market has confronted the identical challenges as the remainder of the meals and beverage area.
“Driving development by means of quantity is a problem when customers are slicing again,” he stated. “Plant-based merchandise wrestle because of increased costs, taking pricing later than dairy and widening the hole as dairy costs have eased.”
Contemplating the options
BMC’s Rodwan famous in Beverage Trade’s November 2024, that dairy options stay a small and area of interest beverage phase, with quantity lower than one-tenth that of typical milk.
“Furthermore, dairy different beverage quantity declined for a second yr in a row in 2023 (although, as with most drinks, greenback gross sales nonetheless grew),” he famous.
Rodwan added that innovation and new flavors or sorts of drinks drive improvement within the dairy different area.
“Over the past couple of a long time, customers’ most popular dairy options have shifted a lot of occasions, with soy as soon as standing because the clear chief, however subsequently displaced by different plant-based choices,” he defined in Beverage Trade’s November 2024 subject.
In response to Rowdan, almond milk stands “by far and away” as the most important dairy different sort by quantity, with almost 70% of the entire as of 2023.
“Oat milk, which had a double-digit market share and stands in second place, is effectively forward of soy,” he shared in Beverage Trade’s November 2024 subject. “In each circumstances, almond and oat drinks provide style profiles and mouthfeel extra palatable to customers than soy, which by no means generated a lot enthusiasm amongst these looking for an alternative choice to milk.”
And simply as almond and oat drinks as soon as loved fast development, Rodwan acknowledged that coconut milk is ascending and will doubtlessly transfer up within the quantity and greenback rankings.
“Once more, nonetheless, what tends to occur with dairy options is that sure segments wax whereas others wane, and the class itself tends to stagnate,” he defined in Beverage Trade’s November 2024 subject. “Beverage Advertising and marketing Company expects general dairy different beverage quantity to say no in 2024 and for the subsequent a number of years, at the same time as choose segments — particularly coconut milk — develop vigorously.”
Circana’s Crawford predicted in Beverage Trade’s November 2024 subject that dairy drinks will return to regular, with options persevering with to face challenges.
“Anticipate dairy to proceed to develop at low charges in {dollars} and quantity as development returns to semi-normalcy, just like 2019 charges,” he stated. “Plant is predicted to proceed to say no, however at slower charges, finally returning to flat development.”
In response to knowledge from Circana, the general plant-based milk class noticed a gross sales lower of 4.5%, totaling $2.5 billion for the 52 weeks ending April 20. Unit gross sales additionally have been down 5% for a similar interval.
Of the plant-based milk class, the refrigerated almond milk phase noticed a gross sales lower of 8.1%, totaling $1.5 billion for the 52 weeks ending April 20. Unit gross sales have been down 9.1% throughout that very same time interval.
In the meantime, the refrigerated oat milk phase noticed a gross sales lower of 0.1%, simply shy of $600 million, with unit gross sales up 3% for the 52 weeks ending April 20, Circana knowledge reveals.
Mintel’s abstract report notes that non-dairy milk has made gradual positive aspects, as a result of customers nonetheless place worth in dairy milk, however admire the advantages of each.
“The joy and demand for non-dairy milk could have reached a peak, however the class will proceed to develop as customers persist in looking for different choices for selection,” it states. “In a saturated market, customers gravitate towards simplicity — easy elements and uncomplicated manufacturing processes.
“Dairy and different milks that showcase their pure qualities and spotlight their intrinsic well being and style benefits will entice important curiosity,” the report continues.
Mintel additionally factors out that older patrons worth perform, whereas youthful customers crave selection.
“Generational variations affect shopping for behaviors and preferences of non-dairy milk,” the report states. “Older customers prioritize useful elements like shelf-life, and have a tendency to choose extra impartial flavors. Alternatively, youthful customers are extra adventurous, looking for various flavors and well being advantages that these options provide.”
Going ahead, Mintel suspects that environmental modifications will affect the manufacturing of each dairy and non-dairy milks.
“Manufacturers might want to innovate, undertake methods equivalent to carbon-neutral farming, transfer to powdered formulation to chop down water and plastic use, and even discover lab-grown milk to cut back reliance on conventional farming,” the report says.
