Majority of consumers prefer the taste of dairy to alternatives
A study from Cargill found 67% of 840 U.S. participants consume dairy products on a regular basis, while half of those consuming plant-based dairy alternatives also are using dairy products, according to the Dairy Reporter.
Out of the 50% of study participants who use dairy, just 8% said they like the dairy alternatives better. The study also noted that 13% consider themselves "dairy avoiders" due to lactose intolerance, dairy sensitivities or allergies, avoiding growth hormones, cutting back on dairy and/or reducing saturated fat.
A majority of participants (55%) said taste was at the top of their priority list when buying dairy products compared to when they're purchasing plant-based alternatives (40%). The study focused on dairy-based yogurt, flavored milk and ice cream, plus dairy alternatives such as plant-based beverages.
The demand for plant-based dairy alternatives continues to climb. Non-dairy milk sales in the U.S. have increased 61% during the past five years and reached an estimated $2.11 billion in 2017. Meanwhile, overall sales in the dairy milk category have dropped 15% since 2012, hitting roughly $16.12 billion in 2017.
Alternative milks, yogurts, creamers and other items have gone from niche products to sought-after mainstays. This development has shaken up the dairy industry, which is trying a variety of tactics to keep the plant-based industry from further encroaching on its turf. The industry has taken legal and political action to force plant-based alternative producers to stop using words such as "milk," "yogurt" and "cheese" on labels if the products don't contain any dairy animal components.
Against this contentious backdrop, more studies, reports and consumer surveys have been emerging lately claiming a preference for dairy-based products compared to plant-based ones or that consuming dairy alternatives can be a nutritional gamble. This latest study comes from Cargill, a privately held company directly involved with the dairy industry through products and services.
It's understandable that the dairy sector wants to see some bright spots on the horizon when the industry has been on a downward spiral. The goal now, at least according to the Cargill study, is to better leverage consumer preference for the taste of real dairy. It would not be surprising to see additional marketing along these lines, especially when 55% of study participants said that taste is their top priority when buying these products.
Dairy producers might focus on the the classic milk experience — think cookies and milk for an after-school snack — as well as the nutritional benefits dairy-based products offer. One Midwest dairy has successfully used nostalgia in its marketing by resuming home delivery with old-fashioned milk trucks and giving farm tours.
Some dairy companies have been investing in plant-based companies, such as Dean Foods' purchase last year of a minority stake in Good Karma Foods, a manufacturer of non-dairy milk and yogurt products. This diversification could help the country's largest milk supplier, which recently had to cancel more than 100 contracts with dairy farmers in eight states due to a raw milk glut, decreasing consumption and Walmart building its own milk processing facility.
With huge profits and jobs hanging in the balance, it's no wonder that dairy and plant-based beverages made from almonds, soy, coconut and other ingredients continue to battle for market share. Dairy and non-dairy milk sales together total more than $18 billion, providing a lucrative opportunity. For now, companies that participate in both markets will likely position themselves with the best chance to succeed amid changing consumer tastes.