The State of Alternative Milk: 3 Key Trends

Even though consumers are facing inflationary pressures, the alternative milk beverage industry is experiencing remarkable growth, reaching $3.2 billion in total US Omni Sales this year. That’s an 11.1% increase over last year.¹ This remarkable surge can be attributed to several factors. First and foremost is the increasing awareness surrounding lactose intolerance and milk allergies, prompting consumers to seek dairy-free options. Additionally, the rising popularity of veganism and vegetarianism has spurred the demand for plant-based alternatives, leading to the proliferation of diverse milk options derived from sources such as almonds, soy, oats, rice, and coconut. With diverse choices and expanding market share, this upward trajectory shows no signs of slowing down.

With that in mind, here are 3 key drivers of growth in the alternative milk industry:

1. Health Consciousness

The pursuit of healthier lifestyles has been a major catalyst for the growth of alternative milk beverages. As more Americans focus on living healthier lifestyles, consumers are becoming more conscious of the potential health risks associated with consuming traditional dairy products. In fact, 12% of consumers polled say they’re trying the plant-based eating approach, ranking it second only to heart-healthy (14%).² This directly benefits many alternative milk beverage brands.

Alternative milk beverages are often perceived as healthier choices. They are typically low in cholesterol and saturated fats while being rich in essential nutrients like vitamins, minerals, and antioxidants. This health-conscious approach has fueled the demand for almond milk, soy milk, and oat milk. Each of these options has gained significant traction in the market due to their perceived nutritional benefits. In fact, oat milk is up 22.6% over last year, while almond and soy options are up 5.6% and 7.1%, respectively.¹

2. Environmental Sustainability

One thing is clear, consumers care about sustainability, and they’re backing it up with their wallets. Sustainability has become a key driver in consumer choices, and the alternative milk industry aligns perfectly with this growing trend. Traditional dairy production is associated with considerable environmental impact, including greenhouse gas emissions and land use. In contrast, plant-based milk alternatives require fewer resources, emit fewer greenhouse gases, and have a lower water footprint.

Consumers are increasingly seeking eco-friendly options, and the reduced environmental impact of alternative milk beverages has resonated strongly with environmentally conscious individuals, driving the industry’s growth further. And, with almost all consumers (95%) trying to take some action to live sustainably, there’s ample room for growth.³ If your brand is eco-friendly, make sure to highlight that fact in your marketing and on the packaging to get the best results.

3. Innovation and Variety

The alternative milk industry is characterized by innovation and an ever-expanding range of options. Manufacturers are continually developing new plant-based milk alternatives to cater to diverse consumer preferences. Today, consumers can choose from a wide array of flavors, textures, and nutritional profiles, ensuring that there is an alternative milk beverage for everyone.

Furthermore, alternative milk products have also expanded beyond beverages, with plant-based options for yogurts, ice creams, and even cheeses. This innovation and variety have attracted consumers looking for exciting alternatives, fostering further growth in the industry. Even better, the success of an innovative product can help brands grow as a whole. In an NIQ BASES study, the data shows that when innovation sales grow, a company is 1.8x more likely to grow overall sales versus companies whose innovation sales are stagnant or declining.⁴ So, an innovative alternative milk product can help grow your entire assortment.

How to Act on Alternative Milk Trends

With alternative milk beverages on the rise, surely that means your brand will see gains too, right? Well, it’s not that simple. You need to know how to act on growing trends to meet evolving shopper needs. Start by taking a closer look at your product offerings and how they align with the trends before making any decisions.

You’ll also want to focus on ensuring consumers can find your products. For example, NIQ data shows that 26% of shoppers find it difficult to find sustainable products on the digital shelf.⁵ So, brands that don’t list desired sustainability attributes in product descriptions can easily get lost in the mix. Make sure to align your packaging, product listings, and marketing efforts to highlight how your products meet the new demands of the consumer.