- As fluid milk sales continue to decline, dairy producers who invest in plant-based alternatives are seeing higher returns than with dairy alone, according to a new Rabobank report. The report's conclusion is that it's time for traditional dairy to study the lessons from the success of plant-free "milks" and consider applying them.
- "Dare Not to Dairy – How the Industry Can Respond to the Rise of Dairy-Free," quotes Euromonitor figures showing that dairy alternatives have pushed global retail sales to an 8% annual growth rate for the past 10 years. Plant-based beverages made up 12% of total fluid milk and alternative sales worldwide last year.
- The report notes, however, that while dairy demand is expected to continue to grow 2.5% in the years to come, consumers are favoring foods that are sustainable and more health-conscious.
Dairy producers are fighting an uphill battle against alternatives, but the report suggests taking lessons from their appeal and consider investing in plant-based products to increase sales and meet growing consumer demand.
Some dairy producers have seen success in diversification. Last year, Danone bought WhiteWave Foods and extended its portfolio into Silk and So Delicious non-dairy products. Dean Foods, the largest milk distributor in the U.S., bought a minority stake in Good Karma Foods in 2017 and is now considering increasing it since the company, which produces beverages and yogurt from flax seeds, saw its growth nearly triple from 2014 to 2017.
Taking things beyond diversification, Elmhurst Dairy in Elma, New York, transformed last year from a traditional dairy with lagging sales to one that produces a line of plant-based beverages. The new products are made from almonds, cashews, hazelnuts and walnuts, as well as peanuts, oats and brown rice, and are marketed under its new name, Elmhurst Milked.
Investing in dairy alternatives may help traditional dairy push back, but it's not the only strategy available. Dairy producers are taking a political route to keep plant-based alternatives from using the words "milk," "cheese" or "yogurt" on their products unless components from a dairy animal were involved in their production.
They have also implemented public outreach campaigns, attempting to educate people about the perceived advantages of milk and contributions from the dairy industry. A recently launched "Got Jobs?" campaign plays off the earlier "Got Milk?" one to focus on the economic benefits of conventional dairy.
Conventional dairy producers also need to address the main drivers behind the appeal of plant-based alternatives the Rabobank report names — health, lifestyle and sustainability — to gain traction against the alternative competition.