Growing ethical, environmental and health concerns have seen an increase in the demand for dairy-free milk alternatives in Australia.
Consumers are broadening their horizons with plant-based milk varieties and in recent years, almond milk has overtaken soy as the most requested dairy alternative, and that growth is expected to continue.
According to IRI data, almond milk has a 22 per cent penetration of total milk, and is up 1.5 per cent versus this time a year ago. While overall, the non-dairy segment has a 38 per cent penetration and is up 3.1 per cent versus this time last year.
Justin Nel, Lead Consultant at IRI, says non-dairy shoppers are a very valuable group as they spend on average 26 per cent more than the average shopper.
Plant-based milks then represent a clear opportunity for convenience stores, particularly when these products have higher margins than cow’s milk and have significantly longer shelf life making them far easier to manage.
Good for the body, good for the earth
People have long been attracted to the health benefits of plant-based milks, but a growing number of socially conscious consumers are now also seeking food and drinks with stronger sustainability credentials.
Australian-owned and made brand, The Alternative Dairy Co, which has the backing of Sanitarium Health Food Company, saw its sales triple in the first quarter of FY21 compared to the last quarter of FY20.
Steve Beams, General Manager – Sales at Sanitarium, says the reason people are increasingly turning to plant milks is two-fold. Firstly, people view plant-based milks as being better for them but they also view them as being better for the environment.
“The Alternative Dairy Co source Australian almonds from the Murray-Darling region. Our supplier Select Harvests is committed to sustainable agriculture and has implemented some innovative solutions at their orchards to minimise the use of water and energy and support bee health. All our oats are locally grown too,” says Beams.
“Using Australian ingredients is a win-win because we’re getting the best quality raw ingredients while supporting Australian agriculture. Plus, we make all our milks on the New South Wales Central Coast.
“What we have seen in the last few months is an increasing push in the marketplace for people wanting to support local – both in terms of the businesses in their neighbourhood, but also the products they sell. Our plant milks not only tick this box, but they’re as good as if not, better than – any other product on the market.”
Oat milk is one to watch
While soy and almond milk have been the key drivers of growth in the dairy-free space, IRI’s Nel has highlighted that oat milk will be a segment to watch over the next five years.
“This could be driven by consumer awareness of the negative impact that almond milk has on the environment due to the amount of water required in farming,” he says.
In August this year, Chobani Australia ventured beyond the dairy category for the first time with the launch of Chobani Oat Barista Edition, made with organic oats.
Lyn Radford, Managing Director, Chobani Australia, says that oat milk has taken the coffee world by storm.
“Chobani Oat is a new player in the alternative dairy space, and we’re working with our great distributors to bring Chobani Oat to people all around Australia through the foodservice channel,” she says.
“Following the launch of Chobani oat-based products in the US, we knew there would be high demand from our Aussie consumers. So, we’re really excited to be setting our sights beyond the yoghurt category for the first time in Australia.”
Oat-based products are increasingly popular with consumers because they address common barriers to purchasing non-dairy alternatives, including sustainability, taste and texture.
“We are really excited by the versatility of the oat base and the variety of other products that can be made from it, so there is plenty of opportunity for future innovations that push the boundaries and bring some excitement to the non-dairy category.”
David Tyack, Managing Director, Vitasoy Australia, says: “The hyper growth in Oat Milk has been outstanding, doubling in size over the last 12 months and now is the third biggest segment, behind almond and soy.”
Vitasoy remains one of the market leaders within plant-based milk, and enjoys market leadership in the segments of Soy, Oat and Rice as well as flavoured on-the-go plant-based milk via its Whole Almond Milk offer.
Recently both Bickford’s and NuYu have tapped into a new category in the plant milk space, having both launched Australia’s first and second pistachio milks.
The range from NuYu launched with five variants, including Almond, Oat, Cashew, Macadamia and Pistachio. They are made in South Australia and support 90 per cent Australian ingredients, with 100 per cent Australian oats, almond and macadamias used.
Bickford’s launched with the same five varieties and are all made from more than 90 per cent Australian ingredients with no artificial sweeteners or GMOs.
Chris Illman, Bickford’s Group Sales and Marketing Manager, says the plant-based milk range is being launched in line with consumer demand, with sales for milk alternatives in Australia having grown 48 per cent to 132 million litres in the past four years.
“Our new range of Bickford’s Premium Plant Milks are a diverse collection of both established and emerging plant-based varieties using the best quality nuts and grains including Almond, Oat, Cashew, Macadamia and Pistachio and can be used for a range of different ‘milk’ needs throughout the day both hot or cold. From including the almond milk in your coffee to trying pistachio milk in a cake, there is a million ways for Aussie’s to discover the range,” he says.
Illman says that innovation in the plant-based space is essential and that is something that Soulfresh Founder, Didi Lo agrees wholeheartedly with.
In Australia, Soulfresh’s Nutty Bruce Almond Milk has more than 30 per cent market share, making it the leader in the category. And the brand has recently added to the Nutty Bruce family with the launch of All Mighty Bruce Future M*lk, a “first of its kind” milk substitute made with wholegrain oats, peas and seaweed.
But Lo thinks that there is still more room to innovate within the category, saying: “I think there’s innovation that consumers need, and there’s innovation that manufacturers would like consumers to need.
“From a consumer point of view, one of the downfalls around some plant milks has been that they don’t necessarily give you the nutritional benefit that dairy milk does. While you get a lot of great things from plant milk when it comes down to protein and calcium a lot of products don’t actually contain that, and the ones that do have often put in ingredients that are not natural or nice.”
It’s for that reason that they created the All Mighty Bruce Future M*lk, which they say, “gives you all the protein, all the calcium and all the macronutrients you get from dairy milk, but in 100 per cent plant-base form”.
The brand is also soon to launch Oaty Bruce, and oat milk variety. And Lo says: “We are really excited to launch Oaty Bruce because it’s a great opportunity to get into the market with a product as beautifully creamy and it’s going to be a really nice solution for people who looking for a plant milk to have on or in coffee.”
Lo also sees opportunity around ice cream, and says that there will be some Nutty Bruce ice creams launching in the not too distant future.
“We have been able to get this incredible creamy product that is not in any way a sacrifice over dairy. I think a lot of the innovation is going to start filtering down into ice cream sticks and blocks, which would be great in a petrol and convenience environment.”
Optimising dairy-free in the convenience channel
According to Sports Dieticians Australia, the number of people who are following a plant-based diet has grown to 2.5 million in Australia, and that number is growing.
So how can retailers make the most of this growing category? Vitasoy’s Tyack says there are three key avenues.
“One, plant-based milk in coffee – one in 10 coffees demand it. Two, provide category awareness of the flavoured plant-based milk segment via visibility of the RTD formats through breadth and positioning of SKUs in the fridge. Three, capitalise on the top-up shop for white milk consumers looking to trade up to plant-based milk via credible, trusted offers in the fridge that deliver on taste.”
Illman from Bickford’s agrees and goes further saying that retailers and suppliers should combine their expertise to boost the category.
“From in-store execution to changing consumer perceptions on taste/quality and that the plant-based category is not a fad, but here to stay.”
Retailers should consider improving in-store visibility as a lot of shoppers might not expect to find a full plant milk offer in convenience, so it is important to interrupt the shopper on their journey.
Things like dual locating can be very effective, as can cross-promotion and inclusion in healthy meal combo offers.
“Optimising space in-store to normalise, create awareness and drive consumer footfall into the category is important, as well as placing other plant-based products together. Keep it simple for the shopper with clear messaging and navigation cues,” says Illman.
Lo agrees, saying that retailers should dedicate a space as a beacon where they can show consumers where these products are located.
“It might be that you’re taking these plant-based, dairy-free products from multiple categories and co-locating at the start. That really helps create some impact and obviously really helps with run rates in the sell through that a lot of convenience retailers will be focused on. Then, once you are seeing a very developed and consistent consumption you can then look to start to integrate that back into the mainstream categories.”
AT A GLANCE
- 2.5 million Australian consumers prefer a plant-based diet
- One in six adults over the age of 18 identify as 100 per cent dairy free (Vegan Australia)
- Five per cent of consumers exclusively purchase dairy alternatives (Dairy Australia)
- Non-dairy shoppers spend on average 26 per cent more than the average shopper (IRI)
- Sales for milk alternatives in Australia having grown 48 per cent to 132 million litres in the past four years