Everything Dairy Processors Need to Know about the Plant-Based Dairy Sector

 

The plant-based dairy sector is experiencing disruption as dairy processors and start-ups explore emerging ingredients and technologies. Many of these products are getting closer to the real deal. 

Ripple Foods, for example, is rolling out Ripple Shake Ups Protein Shakes, a kids’ protein shake designed to tackle the wrath of “tweenage hanger.” Hangry happens. It happens when the kids are rushing out the door in the morning and don’t have time for a solid breakfast. It happens between classes, between meals and before or after school activities. 

The shakes are formulated with a satisfying combination of 13 grams of pea protein and 3 grams of filling fiber. The shelf-stable shakes are also fortified with 13 essential nutrients for growth and development, while being free from the top-nine allergens.

Protein shakes are still a very small sector in the plant-based beverage category. Milk alternatives, on the other hand, are the largest category. The Good Food Institute (GFI) valued the category at $2.9 billion in 2023, representative of 14.5% of the “milk” category. In the natural channel, this figure is much larger, with plant-based milk representing 41% of dollar sales of all milk sold. This category alone accounted for 36% of all plant-based food dollar sales. 

Milk alternatives have 44% household penetration and a 79% repeat rate of purchase, according to GFI. Households with children were more likely to spend extra on the plant-based milk category. 

3 Premium Irish dairy brand Truly Grass Fed is now in the milk alternative space with new Truly Gluten Free Premium Irish Oat Milk. The vegan product is made with Irish oats and comes in original and extra creamy varieties. The latter can be steamed, frothed or added directly into coffee.

Plant-based creamers saw the most activity in terms of product introductions and dollar and unit sales this past year and the category continues to be very active in 2024. Unit sales grew 4% in 2023 and 14% since 2021, while conventional creamer unit sales declined 1% in 2023. Plant-based creamer’s market share of total creamer was 8%, according to GFI. Sales were higher in the natural channel. 

Household penetration is growing, too, jumping from 11% in 2020 to 15% in 2023, with 65% of these households being repeat purchasers. This is the second highest rate of repeat purchase for plant-based categories, behind only plant-based milk, according to GFI. 

Sweden-based Veg of Lund AB uses potato protein to makes its creamers. The company currently markets a range of DUG Barista-style milks around the world, with plans to introduce plant-based ice cream in the near future. 

In the U.S., plant-based ice creams and frozen novelties were purchased by one in 10 households in 2023, as reported by GFI.  Like other plant-based categories, younger consumers are the most likely buyers. Ways to differentiate in this space are with flavors and inclusions.  

The same is true for yogurt-style products, a category that has had a number of new brands this past year, including private label. True Goodness by Meijer now offers a range of private-label plant-based yogurts made from either almond, coconut or oat. 

Data show that 8% of households purchased plant-based yogurt in 2023, representing 4% share of all retail yogurt sales. That number is almost 20% in the natural channel. Younger consumers and households with children were more likely to buy and spend more on plant-based yogurt. 

For the first time, Muller Vitality plant-based will be available to the out-of-home sector. Muller is offering the product in a 3 kilogram bulk pouch format with separate mixable sauce. Bulk-pack yogurts account for 40% of the out-of-home yogurt market in the U.K., according to the company’s research. 

Chefs and foodservice operators can now purchase Muller Vitality Plant-Based Thick & Creamy and Muller Vitality Plant-Based Healthy Balance Plain yogurt alternatives. They are made with a blend of gluten-free oats and coconut. Both products are vegan and a source of calcium and vitamins B12 and D. 

To ensure maximum flexibility, both variants come only in a plain flavor. This gives customers the opportunity to use it across their menu throughout the day. They can also be mixed with a new range called Muller Mixables to create plant-based toffee, peach or strawberry yogurt alternatives. To enable versatility, the sauce has also been designed to be used beyond yogurt in a wide variety of other foods, such as cheesecake. 

“When we looked at the needs of this sector, it became clear that customers are not only looking for a plant-based yogurt alternative option, they are also looking for a flexible solution, in bulk format, that allows them to use it right across their menu,” said Jon Piper, commercial director at Muller Yogurt & Desserts in the United Kingdom. “So that’s what we have created. What we are also able to bring to the party is decades of experience making delicious yogurts and desserts, and a brand that people know, love and trust. There’s a huge growth opportunity for yogurt and plant-based alternatives in this sector, and we will continue to innovate and fill gaps in the market to ensure we can be the partner of choice within out of home.”

Icelandic Provisions, a leading skyr brand in the U.S., has added Icelandic Provisions Oatmilk Skyr to its lineup. One serving contains 12 grams of protein and simple plant-based ingredients, according to the company. It is sold in 5-ounce single-serve and 16-ounce multi-serve containers. 

“Like our traditional dairy-based offerings, our plant-based Oatmilk Skyr is purposefully crafted using high-quality, clean ingredients to serve as a deliciously thick and hearty wholesome breakfast or snack that will nourish our consumers’ minds and bodies to keep them going,” said Mark Alexander, chief executive officer. 

On the spread side, Miyoko’s Creamery offers European Style Plant Milk Butter made with organic cashew milk. It is cultured and churned using traditional creamery methods. The company recently rolled out Oat Milk Butter in cinnamon brown sugar and garlic parm flavors. 

Plant-based cheese continues to be one of the most challenging vegan categories. It’s just really difficult to get flavor, melt and stretch without cows’ milk, particularly the protein casein. Plant-based cheese represents only about 1% of all retail cheese sales, according to GFI. Seven percent of households purchased plant-based cheese in 2023 compared to 5% in 2020. Repeat rates were down. The percentage of buyers making repeat purchases decreased from 56% in 2020 to 49% in 2023. 

GOOD PLANeT Foods was the first alternative cheese manufacturer to use olive oil and is now using the same technology to make sharp cheddar and smoked gouda slices. Most vegan cheeses are made with coconut oil, and therefore contain high amounts of saturated fat. With olive oil, a slice has 0 grams of saturated fat, 0 milligrams cholesterol, and less than half the calories compared to dairy cheese, according to the company. The olive oil also delivers on flavor, texture and meltability. 

Another go-to ingredient in the alternative space is soy, but it is also a common allergen. This is why Mighty Yum has reformulated soy out of the turkey with cheese and ham with cheese Munchables lunch kits. They are also gluten free and “certified free of unhealthy additives.” The vegan meats and cheeses are now made with vegetables, such as parsnips, chickpeas, sweet potatoes and tomato puree. 

The Laughing Cow Plant-Based is made with almond milk. The vegan-certified cheese alternative comes in the same individually portioned wedges as the brand’s cows’ milk cheeses.

Walmart Inc. has introduced Bettergoods, a line of approximately 300 private-label products. The brand is focused on three areas: creating culinary experiences, plant based and “made without.” 

Expect to see more plant-based dairy products getting closer to the real deal.