After several years of almond and soy milk dominating the convenience channe's nondairy beverage segment, several niche formulations have resulted in selection, intrigue and consumer trial.
These days, almond milk is still ascending across dollar and unit sales in multiple retail channels, while soy milk has fallen on harder times. Oat and pea milks are showing robust sales while cashew and coconut milks have seen modest performance.
According to Chicago-based Mintel’s Dairy and Non-Dairy Milk U.S. 2018 report, sales of nondairy milk reached an estimated $2.3 billion in 2018, representing growth of 52% from 2013. Mintel predicts sales of nondairy milk will reach $3.1 billion by 2023, marking a compound annual growth rate of 6.7% from 2018 to 2023.
While almond milk dominates the nondairy milk market—sales for multiunit outlets represent 64% of the entire nondairy milk market—“other” formulations have grown by 515% since 2013.
Sales of soy milk have fallen dramatically and now account for less than 12% of the nondairy milk market, because most soy-milk drinkers have already made the switch to almond or other nondairy milks, according to Mintel. “The negative perceptions surrounding soy makes it unlikely that the soy milk market will attract new consumers,” the report said.
Coconut milk represents “a small yet growing segment of the market, as it’s likely benefiting by the overall trendiness of coconuts in the food and beverage industries (i.e., coconut water and coconut as a flavor/ingredient in foods/drinks)," the report said. "However, coconut milk brands may experience a slight sales slowdown due to the growing popularity of other non-dairy milks.”
While most consumers are buying the same amount of dairy and nondairy milks, some switching behaviors are affecting each respective category, Mintel said.
For example, 60% of consumers who are buying more dairy milk are also buying more nondairy milk, according to the research. Only 7% of those buying more dairy milk are buying less nondairy milk. Among consumers buying less dairy milk, 56% are switching to more nondairy milk and 19% are dropping out of the milk market entirely, according to Mintel.
Overall, 3% of dairy milk consumers are buying less dairy milk and more nondairy milk. While 3% is low, other dairy milk consumers are merely buying less milk in general, and many dairy milk consumers are still buying it but using it less frequently, according to Mintel.
Mike Fogarty, owner of Denver-based Choice Market, expects food company R&D teams to continue to push plant-based ingredients to more fully serve the dairy segment. “We’ve had these products from day one, and we’ve seen the splits that have occurred in migrating people from traditional dairy to plant-based options,” Fogarty said. “The quality of the (nondairy milk) products speak for themselves. We have a 2,500-square-foot store, so there’s not a lot of space to design an elaborate endcap or compelling signage. We highlight products on our social-media feed, and I think many of the CPG brands have done a great job making these products stand apart from the crowd—they are serving as their own billboards.”
Click through for eight nondairy offerings that are helping to ignite the segment.