February 16, 2024 – Twenty percent of Americans and thirty percent of Canadians have consumed dairy alternatives in the past year. As the category grows to US$4 billion in value in North America, it is now looking beyond traditional bases and better nutrition profiles. Here’s what’s happening with plant–based milk trends.
Consumer Insights
Generation Z has the most positive attitude when it comes to plant–based products, as more than half of US and Canadian Gen Z consumers give their approval. Yet boomers seemingly have a glass half empty attitude, with less than 30% having a positive view of plant–based products. Overall, the main reasons for consumers to consume plant–based products are their perceived ‘naturalness’ and digestive health benefits.
Dairy Alternatives on Top
Gen Z are most conscious of limiting or reducing dairy in their diets, for health reasons and climate-related reasons alike, and are most likely to choose dairy alternatives instead.
Canadians named milk alternatives as their number one plant-based choice, while US consumers listed it as their number two. Moreover, daily consumption of milk alternatives has risen to two-thirds of the level of dairy milk consumption.
Consumers say their top message to dairy alternative drink manufacturers is to make their products more affordable, especially when the cost-of-living-crisis has hit their largest consumer groups the hardest. Consumers also claim they most prefer almond and oat product bases in their dairy alternatives.
Shaping the Category
Dairy alternative drink launches grew at a +7% CAGR over the past four years, doubling its share to 12% of North American dairy launches. This increase concurred with the -12% CAGR decline for dairy launches. New activity presents the emerging of generic “non-dairy” offerings, including the fermented, cultured, and microbial alternatives. Besides these new non-dairy offerings, many dairy alternative drink launches are using a combination of plant–product bases in their search for the perfect blend of nutrients, taste, and mouth feel.
Oat Milk Coronation
While plant–based alternatives are establishing their place in the line of succession, oat milk launches have dramatically risen in both countries and dethroned almond milk in the US as the number one product base in new product launches. Additionally, alternative options to almond milk are expanding, with oat-based launches growing fastest, coconut milk growing increasingly, and brown rice options stepping onto the scene. Innovation in the product base is a feature of plant–based milk trends.
Consumer Preferences
The use of plant-based claims is soaring, expanding to half of 2023 YTD launches from 29% in 2018, also seeing a rise in sugar-free and (high) source of protein claims. This rise in differentiated protein claims can be attributed to compensating for the potential protein loss when animal products are cut from one’s diet.
The iconic worldwide staple milk chocolate flavor grew as well, although flavored dairy alternative drinks have an overall decline since 2018.
As for overall consumption by North American consumers, 30% of North American consumers that are aware of dairy alternatives say they are willing to buy soy-based products. 28% of North American consumers, however, say they consciously avoid soy-based products.
Trends Impact
Two of Innova’s macro trends, healthier living, and conscious consumption choices, are influencing plant–based milk trends as shown by several of Innova’s Top 10 Trends for 2023:
Plant-Based: Unlocking a New Narrative – which highlights how underused ingredients and technology-enabled new formats open wider spaces for standalone plant-based innovation – shows how consumers are increasing their use of dairy alternative drinks as new products and product bases expand their shelf presence.
Farming the future – defined as new farming systems are improving quality and sustainability, leading to renewed consumer interest in food sources – emphasizes how water shortages and droughts have raised interest in regenerative and dry farming for water-intensive almonds, as well as crops that use less water, such as oats and groundnuts.
Unpuzzle Health – describing how simple communication backed by trusted certification reinforces health messages, especially when matched by consumer experience – reveals that clean label claims and certifications have increased in response to consumer demand for healthy, natural food.
What’s Next?
Nutritional parity is one of the most important plant–based milk trends. Expect to see an increase in nutritional claims. As the dairy alternative drinks market expands, their healthier-for-you reputation will drive continued growth for the functional claims that are currently emerging.
Product base variety: consumer acceptance of cow-free milk, products that are made from real whey protein from animal-free sources, will support advancements in cell-cultured – lab-grown – dairy, mycelial fermentation – the process of fermenting networks of fungal threads or hyphae – and enzyme technology.
Ethics and sustainability developments: as novel technologies and techniques expand, so will the use of ethical treatment of animal, fish, and bird claims, a necessity to overcome consumer concerns about these new ways of producing animal-free milk.
This article is based on our insider report, “Cartons Without Cows: Plant-Based Milk in the US & Canada.” If you are interested in reading this report, feel free to request a demo. You can do this by either booking a demo or using our Contact Form.
