IDM ¦ Markets
Zenith Global Report
USA Opportunities in Plant-based Drinks Report
Zenith Global Ltd. has recently
analysed the US plant-based
drinks market that has shown
a tremendous growth over the
past years. The category has
developed a real challenge for traditional
dairy products, although on a still moderate
volume. But this volume is set to increase.
IDM quotes some of the key findings
of the Zenith report.
The US plant-based drinks market
grew steadily between 2014 and 2017
registering a CAGR of 7% reaching 1.07
bn liters in 2017. In 2018 the sector increased
by 9% registering over 1.16 bn
litres. Accordingly, per capita consumption
has increased gradually from 2.8 litres in
2014 to 3.6 litres in 2018 an increase of
28.5%. Main growth drivers behind the
popularity of plant-based drinks include
rising lactose intolerance incidences, digestive
benefits, consumers’ perception of
plant-based drinks as healthier than animal
milk, sensitivity to animal welfare and consumers’
perception of „the negative environmental
impact of the dairy industry“.
Evolution of channels
Most plant-based drinks are consumed at
home. In 2018 retail sales accounted for
92 of total sales registering sales of over 1
billion litres and OOH (Out Of Home) only
8 or 91.1 million litres.
OOH is growing faster than retail (albeit
from a low base) at a rate of 15% against
8.6 in 2018. The momentum can be explained
by the popularity of plant-based
drinks as an ingredient for beverages in
coffee shops. In terms of value, the total
plant-based market reached US 2.32 billion
in 2018 an increase of 44% since 2014.
30 · May 2020 ¦ international-dairy.com
Key drivers behind the rising value include,
increased consumption and consumers
willingness to pay more for a product
they deemed as healthy and beneficial for
their overall wellbeing. Consequently per
capita expenditure has surged from US 5.2
to US 7.1 in 2018 an increase of 19 points.
Price competition
The Price per litre (PPL) of cow’s milk has
been declining year on year from US 1.10
in 2014 to US 1.03 in 2018. Despite negative
press and increased competition from
plant-based drinks, resulting in declining
sales of cow’s milk, the production has been
encouraged by government subsidies. This
has led to an oversupply of milk and consequently
declining farmgate and retail prices.
Within cow’s milk, fresh milk which is the
largest category, the PPL decreased from US
1.01 in 2017 to US 0.98 in 2018.
Although the price per litre could grow
further as flavoured milk is gaining momentum
with higher prices than plain milk.
The price per litre of cow’s milk is expected
to remain lower than plant-based drinks
due to over local supply. Also, the US government
may continue to incentivise production,
with parts of this milk distributed
through the government’s National school
lunch programme a federally assisted meal
programme that provides nutritious low
cost or no cost lunches to children in public
and non profit private schools).
In 2018 the price per litre of non dairy
alternatives grew by 1.7% to US 1.81
/international-dairy.com
/international-dairy.com
