PLANT BASED DAIRY ALTERNATIVES
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
plan 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.
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 compared to the previous
year. The increase of the price per
litre is due to the popularity of the
product coupled with rising costs
of raw materials, higher production
costs and the premium positioning
compared to cow’s milk.
September 2020 ¦ international-dairy.com · 21
/international-dairy.com
