Non-Dairy Milk Surges, Dairy Milk Slumps

Photo © iStockphoto.com/ ValentynVolkov

Non-dairy milk may be dwarfed by dairy milk when it comes to total market size, but new data from Mintel suggests it’s actually the non-dairy category that has more reason to celebrate. While non-dairy milk offerings experienced a 9% gain in 2015, dairy milk sales decreased by 7% last year, with an additional 11% drop projected through 2020.

Make no mistake-of the two milk types, dairy milk is still the dominant market force. With $17.8 billion in sales in 2015, dairy milk towers over non-dairy milk, which had $1.9 billion in sales in 2015. But consumer perceptions appear to be leaning in favor of non-dairy milk in several ways.

First off, 69% of consumers think non-dairy milk is healthy for kids, versus 62% who think the same is true of dairy milk, according to Mintel. Non-dairy milk is also more likely than dairy milk to be consumer’s choice for weight loss (23% non-dairy versus 8% dairy) and heart health (29% non-dairy versus 20% dairy).

An overwhelming 91% of Americans consume dairy milk, compared to 49% of Americans consuming non-dairy milk. But parents appear to be especially enticed by non-diary milk, with 68% of parents and 54% of children under 18 consuming non-dairy milk. What’s more, 46% of non-dairy milk consumers drink it at least twice per day-and it’s not just because their diet forces them to.

“In addition to half of Americans consuming non-dairy milk, our research reveals that nearly all non-dairy milk drinkers also drink dairy milk, revealing that consumers are turning to non-dairy out of preference as opposed to necessity,” said Elizabeth Sisel, Beverage Analyst, Mintel.

Even with the majority of consumers consuming dairy milk, 69% use it as an addition to food, such as cereal, and 61% use it as an ingredient. It’s only 57% of consumers who drink dairy milk by itself, which is “undoubtedly contributing to the category’s steady decline in consumption,” Sisel said.

“This signals a need for brands to communicate the benefits of consuming dairy milk as a beverage, especially among parents, who are more willing than consumers overall to drink non-dairy milk and buy non-dairy milk for their children as a better-for-you alternative,” Sisel explained.

More Opportunities for Non-Dairy

To further press its advantages, non-dairy milk should also be enhanced with additional ingredients or health benefits, Mintel’s data suggests. For instance, 30% of consumers say they would be more encouraged to drink non-dairy milk if it had extra protein, and 18% of consumers say they would be more drawn to non-dairy milk with the addition of beauty benefits, such as for skin or hair health.

“Consumers are connecting their diets with the way they look and feel,” Sisel said. “This creates opportunities for non-dairy milks to promote health in a number of areas for both men and women, from wellness and nutrition to beauty benefits such as hair and nail health.”

Dairy Still Has Advantages

Despite the sales decline, dairy milk still has the edge in several metrics of consumer perception. Compared to non-dairy milk, consumers agree that dairy milk is naturally nutritious (67% dairy versus 60% non-dairy), free of additives (81% dairy versus 62% non-dairy), and fresh (86% dairy versus 63% non-dairy).

The flavored dairy milk segment also offers a brighter outlook than dairy milk as a whole, with 5% sales gains posted in flavored dairy milk between 2014 and 2015. Additionally, 82% of consumer believe dairy milks are available in a wide variety of flavors, compared to 61% who believe the same is true of non-dairy milks.

“While consumer trends are not favoring dairy milk, brands have an opportunity to re-engage consumers by developing innovative offerings that focus on improving already favorable aspects such as taste profile and nutritional value,” Sisel said. “It’s also important for brands to highlight that dairy milk is not just beneficial for bone health, but may also provide other benefits for consumers’ overall well-being as compared to non-dairy milk.”

Read more:

How Big a Threat Is Plant Protein to Dairy Protein?

Consumers Prefer Blends of Soy and Dairy in High-Protein Beverages, Study Suggests

Michael Crane
Associate Editor
Nutritional Outlook Magazine
michael.crane@ubm.com