Demand for dairy alternatives is growing. A 2018 study by Consumer Reports showed nearly one-third of U.S. consumers purchase plant-based dairy alternatives, and 18% buy both dairy and non-dairy milks. Oat-based milk alternatives, in particular, recently experienced a meteoric rise.
While still a minor segment of the US$2 billion dairy alternative market, oat milk exploded onto the scene via boutique coffee shops and specialty stores on the east and west coasts. According to proprietary SPINS data, U.S. sales of refrigerated oat milk rose by an astonishing 2,094% for the 52-weeks ending Oct. 6, 2019 in the natural, specialty gourmet and conventional multi-outlet U.S. food retailers excluding Whole Foods, Trader Joe’s and ALDI). Baristas and coffee connoisseurs prize oat milk for its capacity to be whipped into frothy cappuccinos and creamy espresso applications.
The most successful oat milk brands position their products as viable plant-based alternatives to dairy milk. Rather than solely emphasizing the healthy attributes of oats, such as high fiber content and heart benefits, the best-selling brands also put flavor and texture in the spotlight, due in no small part to their connection with coffee. Therefore, when it comes to disrupting demand for dairy, brands are well-served to remember that consumers often value both flavor and function.
The trend toward alternatives to traditional dairy products will continue to grow. Generational shifts in dairy consumption have created opportunities for brands to disrupt the marketplace with plant-based alternatives. Consumers, especially Millennials, increasingly seek healthy, sustainable choices in the foods they buy. When it comes to purchasing non-dairy applications, consumers have an abundance of choices. Therefore, to be successful, brands must prioritize flavor and functional benefits during product development.
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