THE FUTURE OF MILK IS NUTS!: Why Large Dairy Companies are Investing in Plant-based Milks

In 2017 dairy producers led a crackdown on “fake milks”, which they argued were masquerading as dairy products and altering the very meaning of the word “milk”. Even though soy milk and almond milk are commonplace terms, the dairy industry maintained that “milk’s identity is obtained from milking animals”. And so in February of 2017, with the support of lawmakers, the dairy industry introduced legislation calling for the FDA to enforce these guidelines. 

Today many dairy farmers continue to voice their distaste towards alt-dairy products. However, some big dairy companies are taking a different route, by saying “if you can’t beat ‘em, join ‘em”. Privately owned HP Hood, one of the largest and oldest branded dairy operators in the U.S., recently released the plant-based beverage Planet Oat Oatmilk. 

According to data from the Plant Based Food Association, plant-based milk accounts for 15% of total fluid milk sales in the U.S., and so rather than battling ownership of the word “milk”, HP Foods have decided to compete.

For traditional dairy companies to survive, they should look at the statistics. Americans are drinking 40 percent less milk than they were in 1975. And the Dairy Farmers of America (DFA) claims that sales of milk fell by approximately $1.1 billion last year, with net sales totalling $13.6 billion, compared to 2017’s $14.7 billion. By contrast, the demand for nut, soy and oat milk has increased significantly. In 2017, the market value for dairy alternatives was estimated at $11.9 billion, and experts predict that by 2024 the value could rise to over $34 billion, leaving traditional dairy farmers feeling the burden.

USDA DATA, 2019.

Manufacturers should look to the future too. In June 2018, a study by the Food Ethics Council found that 46% of consumers aged between 16 and 24 years old believe that the current food system is harmful to the planet. This has led many beverage manufacturers to recognize that many younger consumers are moving away from dairy milk out of concern for the planet.

As the traditional cow’s milk business continues to struggle to compete with those manufacturers creating plant-based alternatives, the wisest move seems to be investing in a diverse array of “milk” products made from soy, almonds, coconuts, rice — even peas and oats.

Are you a food and beverage manufacturer? Find out how Cashmere Systems can help your company move ahead of the competition by getting in touch today.