Expected to reach nearly $40 billion in annual sales by 2025, the global dairy alternatives market is one of the largest in the plant-based eating space and expected to represent food market trend number one in 2020. According to data from Innova Market Insights, three times as many plant-based milk alternatives are launched globally than the average rate across food and beverage.
Despite strong potential to connect with an audience open to plant-based milks, three major challenges limit the viability that going plant-based when it comes to milk is always better:
1) Plant-based milks have a pretension of naturalness.
While dairy milk is a single-ingredient chock-full of nutritional and functional properties, the same cannot be said of the various plant-based counterparts. Although certain plants are immensely valuable to humans for providing nutritious fruits, leaves, and seeds—besides extraordinary oils and extracts for homeopathic and cosmetic use—they do not produce any milk by squeezing them.
The ingredient list of vegan milks is often so long that associating an idea of naturalness with them would utterly be a flight of fancy. Vegan milks void of any emulsifiers, thickeners, off-flavor masking agents, and with no need for extra-nutrient fortification to mimic—or pretend to be superior to—dairy have yet to come in 2020.
As a major challenge plant-based dairy manufacturers face to boost consumer’s acceptance is replicating the authentic taste of dairy milk and the creamy mouth feel of traditional dairy products, such as ice creams, yogurts, and cheeses, large investments on know-how are required to compete with conventional dairy and disrupt the plant-based milk segment.
The higher cost of plant-based milk is overall not due to its superior quality compared to dairy milk, but to the research & development and marketing efforts that upstream formulate it and launch it on the market.
2) Sustainability of the food miles for full-fledged animal-free diets is shaded.
A strong motivation for many people who drink plant-based milks instead of dairy milk is their potential benefits for the environment. But while it is generally true that plant-based foods are on the whole better from a sustainability perspective, careful life cycle assessments need to be built into the product development process to ensure no unintended consequences. For example, producing cow’s milk from a farm down the road in Switzerland could be better for the environment than manufacturing in a cold factory in Canada an unnecessary plant-based milk alternative with the raw material coming from Asia.
In the last years, the dairy sector has made great strides in reducing emissions per kg of milk—what’s called greenhouse gas emissions (GHG) intensity. According to a recent Food and Agriculture Organization (FAO) report, between 2005 and 2015, emissions intensity from the dairy sector declined by almost 11%, in spite of dairy production increasing by 30%.
Furthermore, even if dairy animals were taken out of the picture, it would have minimal impact on global GHG emissions. Scientific studies have shown that if every person cut out meat and dairy from their diets, it would only achieve a 2.6% reduction in greenhouse gas emissions; yet, the nutritional loss and the effects of having to spend more on more expensive diets could counteract the benefits. Fossil fuels, as many climate scientists have pointed out, are still the main contributor.
3) As long as plant-based dairy alternatives remain alternatives, no specialty market will exist.
For being a single-ingredient food, dairy milk is not only natural by default but lends itself to disparate transformations in a multiform array of products (yogurt, cheese, butter, etc.), which are all well versed to include a touch of craftsmanship and tradition linked to the origin of the raw material. Such market differentiation through the added value provided by the creative component of the small-medium artisan has made possible the existence and affirmation of a specialty niche for dairy products.
The same hasn’t yet happened with plant-based milks due to their artificial nature, based on extreme lab science. How could a specialty market for plant-based dairy alternatives arise if crafting food products from vegan milks implies to include multiple-ingredient compounds, not single-ingredient natural materials?
Favorable market trends apart, as long as plant-based milks remain labored dairy milk copycats and don’t highlight a truly genuine identity on the market, they will still settle with generic premiumization in 2020.