In the United States, shelves in supermarkets have been flooded with the ever-expanding range of plant-based dairy alternatives. This is primarily due to the growing perception of consumers considering plant-based dairy alternatives to be healthier alternatives to traditional dairy products. The rise of flexitarians, lactose intolerance, and changing consumer beliefs are some of the other key drivers for the meteoric rise of plant-based dairy alternatives in the United States.
Demand for plant-based milk is rising and expected to drive the market growth
According to ConsumerIntel360, dairy alternatives increased at an annual growth rate (AGR) of 23.0% during 2020. Over the forecast period of 2021 to 2027, it is expected to record a CAGR of 15.4%, increasing from US$658.8 million in 2020 to reach US$1,883.8 million by 2027. The plant-based segment initially started as a few options, including almond and soy milk. However, the category has now expanded into a wide range of choices with evolving tastes and preferences of consumers. In the last few years, bases beyond almond and soy have grown in popularity, as consumers are becoming more selective about their plant-based milk alternatives.
Oat milk is the most favored milk alternative, recording triple-digit sales growth
In the United States, oat milk sales have seen significant growth and became one of the most favored and fastest-growing plant-based milk alternatives in the market. In fact, the sales number has risen more than 298% in the mainstream retail channels and around 285% in the enhanced retail category in the last year.
This triple-digit sales growth has also piqued the attention of key market players in the beverage industry. For instance, Coca-Cola launched a new oat milk product under its plant-based brand - Simply. The world’s largest beverage company to enter the oat milk segment is a testament to the growing popularity of plant-based milk alternatives in the United States. Made from oat flour, non-GMO oat extract, and other ingredients, Simply Oat is the second plant-based offering from Coca-Cola after launching Simply Almond last year.
Rapid launch of new plant-based dairy alternatives
The increasing shift of consumers towards plant-based dairy products has resulted in several new companies joining the alternative milk bandwagon. For instance, Impossible Foods, known for its alternative meat offerings, announced its new plant-based milk.
Additionally, several startups are also exploring new bases for innovation in the alternative milk category. As a result, barley and banana are both coming up as dairy alternative innovations. Mooala, a Texas-based alternative milk startup, has launched a shelf-stable, dairy-free banana milk product from a blend of sunflower seeds and bananas. Take Two Foods is another US-based startup using the leftover barley from beer production and turning it into delicious plant-based milk.
For disrupting the alternative milk category in the United States, some plant-based companies are also using hemp, chia, and avocado to offer their plant-based dairy-free products.
Innovation in the plant-based alternative cheese segment
The alternative plant-based cheese market is one of the fastest-growing industries in the United States. The majority of the brands are offering plant-based cheese alternatives that use cashews, almonds, and nuts as the main ingredient. However, a few startups in the United States are looking to disrupt the alternative cheese category through their use of unusual ingredients.
For instance, Grounded Foods, a Los Angeles-based startup, is making their alternative plant-based cheese using cauliflower and hemp seeds. Spero Foods is another US-based startup that uses sunflower seeds and other ingredients to create a more affordable plant-based cheese alternative.
Climax Foods, a California-based food tech startup, is leveraging the power of data to create the perfect formulation of the most delicious plant-based cheese. The startup raised US$7.5 million in September 2020 to fund its research in developing the best plant-based cheese alternative in the country.
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