“To choose your specific type of plant-based milk in Starbucks [now] seems to be a way of identifying yourself,” says Bruno Monteyne, an analyst at Bernstein. Nestlé’s belated entry into the market springs from a conviction among multinationals that the plant dairy trend is a lasting shift, not just a middle-class fad. French yoghurt maker Danone is further down that road, selling €2.2bn of plant-based dairy alternatives in 2020. Recommended How to be a vegan (and not miss a thing) podcast22 min listen Why we should all give up meat Yet the plant milk mania has prompted a fightback by dairy groups, which have stepped up promotion of their own sustainability efforts and secured an EU ban on calling vegan products “milk” or “yoghurt”. Plant-based milks, meanwhile, have struggled to match the nutritional properties of dairy such as protein levels and essential amino acids. In what is now a highly competitive field, manufacturers face pressure on margins and an inevitable process of consolidation, all while holding the attention of consumers who are consigning past food trends, such as low-fat diets, to history.
Conscious consumption “Milks” produced with soyabeans have been made in China for centuries, while almond milk has a long history in the Middle East. But plant milks reached European and US markets much later. Increasing awareness of lactose intolerance spurred demand for soya milk in the 1970s and 80s, backed by a new breed of health-conscious consumer. Since then, plant-based milks have proliferated. Households seeking a vegan drink can now choose from among oats, cashews, coconut, hemp, peas, barley, rice, chia seeds and others. Soya has declined on concerns about allergies and its contribution to deforestation. But in the past decade sales of non-soya plant milks have ballooned, rising almost nine-fold in western markets, which include western Europe, North America and Australasia, according to Euromonitor.
This is partly attributed to consumers seeking to avoid saturated fat and cholesterol. But increasingly plant milk sales have been driven by sustainability concerns as shoppers became more aware of climate change. Livestock produce 14.5 per cent of greenhouse gas emissions, when feed, transport and other factors are taken into account, according to the UN’s Food and Agriculture Organization. Greta Thunberg, the teenage Swedish climate activist, is among those urging lower meat and dairy consumption. While she is vegan, a key trend benefiting plant-based milks has been a desire to cut down on animal products even among those reluctant to adopt strict diets.
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“It’s not just the more extreme vegetarian or vegan consumer who has adopted this. It’s becoming a much broader ‘flexitarian’ community,” says Daniel Ordóñez, chief growth officer for dairy and plant-based products at Danone. He adds that improved technology is making plant-based products tastier, helping to attract a broader audience. US organic food entrepreneur John Foraker says: “Everything from health concerns, animal welfare issues, perceived and real environmental issues around conventional dairy production — all those things are sucked into a big vortex, driving consumer attitudes in many categories.
Where you can have a plant-based alternative there is interest.” ‘No such thing as plant milk’ Growing consumer demand has led to an influx of funding. Venture capital investment in the plant-based dairy and eggs sector soared to $1.6bn last year from $64m in 2015, according to data firm Dealroom, with Califia Farms — the US plant-based drinks company — raising $170m and Oatly $200m. Apart from the big food and dairy groups, according to PitchBook, there are now at least 124 standalone plant-based dairy companies globally. Oatly realised its brand could be established quickly in new markets through partnerships with cafés. It targeted high-end coffee shops and chains with its “barista” version, which froths like dairy milk. Coffee is “the main entry door to adopting plant-based beverages”, says Ordóñez. As companies compete for their share of a growing market they are ramping up their climate credentials. Oatly labels the carbon footprint of each product. Nestlé has upped the ante with carbon neutral certification for Wunda from the Carbon Trust.
But as plant milk sales have accelerated, the dairy industry has begun to fight back, with terminology and legal cases. “There is no such thing as plant milk . . . It’s called plant drinks. Such a thing as plant milk does not exist,” insists Hanne Sondergaard, chief marketing officer at the Danish dairy co-operative Arla. In the EU, this distinction is now law. A 2017 ruling by the European Court of Justice prevented vegan foodmakers from labelling their wares “milk” or “yoghurt”. A further battle has erupted over additional measures backed by the European parliament, which — if they win support in talks with the commission and member states this month — will prevent such products from using packaging that echoes dairy, such as yoghurt pots or milk cartons. Plant milk makers and campaigners have pushed back. “Are you stupid? The milk lobby thinks you are,” railed Oatly in an advertising campaign, accusing the EU of “censoring plant-based foods”.
Toni Petersson, chief executive of Oatly, said: ‘Our aim is to disrupt one of the world’s largest industries — dairy — and in the process lead a new way forward for the food system’
David Julian McClements, a professor of food science at the University of Massachusetts, says that for those who are not lactose intolerant, milk “has a really good nutritional profile. Milk has developed for feeding infants — for a calf rather than a human baby, but there is a lot of overlap between what we have in human breast milk and cow’s milk.”
One problem is proteins. Plant milks contain less than dairy: Oatly contains 1g of protein per 100ml, against more than 3g for cow’s milk. With 2.2g of protein, Nestlé’s use of peas is an attempt to compensate for that shortfall. Developments in food technology will bring the products closer to the nutritional properties of dairy, McClements says. María Mascaraque, global industry manager at Euromonitor, says consumers have worries “about the nutritional content and a concern that these products tend to be heavily processed compared with cow’s milk.
