Milk may need a makeover: Alternatives to dairy are increasingly winning over consumers

The dairy industry brings in roughly $600 billion in global sales every year, while the dairy alternative industry accounts for just $18 billion.
Rabobank’s Tom Bailey contends there’s no evidence to prove dairy-free is healthier than milk, but brands have done a better job of marketing it.
Consumers are shying away from milk, turning instead to dairy alternatives made from soy, rice and oats, and other crops.

Those alternatives are still a small slice — just 3 percent of the $600 billion global dairy industry — but they are growing. Dairy alternatives increased 4 percent in the five years ended in 2017, while sales of fluid milk dropped 3.5 percent, according to a recent report by Dutch bank Rabobank.

Part of the issue is that some consumers have eschewed milk for health reasons, said Tom Bailey, the Rabobank analyst who wrote the report.

“Consumers are making a shift in perception that dairy-free is healthy,” Bailey said. “But there’s no evidence to prove it.”

Dairy alternatives companies, he said, have been adept at marketing their products, using clear labeling, touting locally sourced ingredients. Milk’s packaging, though, has changed little over the past decade and details of its content are similarly obscure.

Australia’s a2 Milk discusses its expansion into South Korea from CNBC.

“The dairy industry rightfully points to the nutritional and flavor superiority of dairy compared to plant-based beverages,” said Bailey. “[But] the makers of dairy alternatives generally appear to be doing a better job of connecting emotionally with consumers who favor more dairy-free options to meet their own perceptions about health and lifestyle.”

“How do our products love you back?” Califia Farms, which makes dairy-free probiotic yogurts, creamers and cold-brew coffees, asks on its website. “They love your body by being natural and GMO-free. They love your planet by being sustainably-sourced.”

Similar language and goals are shared by Califia Farms’ competitors. Those include Ripple, which makes dairy-free almond milk and a “Greek yogurt alternative,” and NadaMoo, which makes nondairy coconut ice cream. There’s even Perfect Day, which uses yeast and fermentation to make animal-free “milk.”

Still, some traditional milk brands have been able to grow.

Coca-Cola, under pressure to reinvent its own drink portfolio as sales of its flagship soda face changing consumer tides, has seen success with its premium milk brand, Fairlife. It touts the high-end milk drink as having the attributes consumers are flocking to: more protein and calcium, less sugar and lactose.

“There’s value to be realized in innovation and premiumizing milk products,” said Bailey.

Other milk companies could follow suit, he said: They could focus on new packaging or label transparency about where they are sourcing their milk from.

Still, there remains consumer suspicion around products that companies make in mass and about how the animals that provide those products are treated.

Meanwhile, dairy companies could also continue their investment in the space, looking to buy what they cannot create on their own.

Danone acquired WhiteWave, maker of Silk-branded soy milk, for roughly $10 billion in 2017. General Mills has invested in nut yogurt and cheese company Kite Hill.

By: Lauren Hirsch

Source: CNBC

Link: https://www.cnbc.com/2018/05/29/alternatives-to-dairy-are-increasingly-winning-over-consumers.html

Any claim arising from the information contained on the eDairy News website shall be submitted to the competence of the ordinary courts of the First Judicial District of the Province of Cordoba (Primera Circunscripción Judicial de la Provincia de Cordoba), Republic of Argentina, in the city of Córdoba, excluding any other jurisdiction (Federal jurisdiction is also excluded).

*

Criteria in the moderation of comments that eDairy News will take into consideration in all its publications.

  • They will not be considered insults of any kind against anyone,, whether a user, moderator or publisher. Complaints made with the name and surname of the author of the commentary will only be accepted after confirmation by the moderator.
  • Unsubstantiated and gratuitous destructive criticism or expressions of bad taste, whether offensive, racist or xenophobic.
  • SPAM, (Insert links to web pages not related to the subject, provide emails, etc...)
  • Comments that are meaningless with the footnote or the dairy sector.

Related posts


Top