Milkadamia, an Illinois-based manufacturer of macadamia nut-based beverages, will offer a refrigerated line at Walmart starting in January. The move could double the company's store count and revenues within a year, Jim Richards, Milkadamia CEO, told Food Navigator.
Milkadamia is already in about 5,000 retail outlets in the U.S., including Wegmans, Whole Foods and Sprouts. It also is offered in 2,000 or more cafes.
Richards said large retail players have approached Milkadamia. "My own personal view is that mainstream grocery see it as a big bunch of clientele they can end up on the wrong side of history with if they don't start putting artisanal and interesting products in their stores," he told Food Navigator.
U.S. consumers are experimenting more with plant-based beverages, and this new entry could benefit from that trend. Macadamia nut milk is the latest entry into the plant-based beverage market, which is already crowded with products made from peas, almonds, soy, rice, hemp, cashew, oat and coconut. Their collective entry into the marketplace is taking market share away from dairy-based beverages.
According to Mintel, U.S. non-dairy milk sales grew 9% in 2015, while dairy milk sales declined 7% during the same period. Mintel also reported that 49% of Americans are consuming non-dairy milk — including 68% of parents and 54% of children — and that 69% of consumers believe that non-dairy milks are healthy for children. There are a significant number of consumers who can’t eat dairy. More than 40 million Americans are lactose intolerant. But many others are looking to dairy alternatives.
Major food players have taken notice led by Danone, which purchased the fast-growing organic foods maker WhiteWave for $12.5 billion last year, giving it a foothold in the space with brands such as Silk and So Delicious — both makers of almond milk and cashew milk. With Danone, and other privately held companies like Blue Diamond and upstart Califia Farms popular with consumers, it's uncertain whether they will be too powerful to prevent Milkadamia from further encroaching on their turf, or whether they will decide to market their own macadamia-based milk if popularity of the product further increases.
Milkadamia already has been able to get itself in chains such as Whole Foods and Wegmans. Its entrance into Walmart is definitely a positive, but could make it a target for bigger beverage makers with more scale and influence with the world's largest retailer. Milkadamia also needs to withstand challenges that have faced other milks, like those from soy that have declined in popularity due to doubts about health benefit claims.
Another obstacle for macadamia products may be their high calorie content, which could position them as a special occasion treat since consumers sometimes choose to use different types of milk for different purposes — for example, cow’s milk for breakfast cereal, almond milk for smoothies and coconut milk for cooking.
Milkadamia doesn't seem concerned and is positioning the brand as tasty, sustainable and unapologetic. The company also has taken a creative marketing approach by poking fun at the dairy industry and almond-based beverages.
A glance into the refrigerator case at a natural food store or supermarket shows retailers are increasingly stocking more plant-based milks with fewer artificial ingredients, and given the demand, that is not likely to change anytime soon. It will be interesting to see if macadamia nut milk can equal the popularity of some other plant-based beverages with U.S. consumers.