Effect on Adjacent Alt-Dairy Categories
The success of plant-based milk has laid the groundwork for significant growth in other plant-based dairy products, which attained $2.1 billion in total sales in 2021. Categories such as ready-to-drink beverages, and plant-based creamers — which now has a 9% share of all creamers sold — saw rapid growth as plant-based milk consumers increasingly moved into these adjacent categories.
Across the store, plant-based dairy dollar sales are growing more quickly than those of many conventional animal products. In 2021, plant-based yogurt dollar sales rose 9%, three times the rate of conventional yogurt, to a 4.5% dollar share. Plant-based cheese grew 7%, while conventional cheese decreased 2%, and plant-based ice cream and frozen desserts increased 31% over the past two years to reach $458 million. In the natural enhanced channel, where retail trends start, dollar share of plant-based creamers rose to 33% of all creamers sold, while plant-based yogurt increased to a 21% share of all yogurt.
Still Going Strong
This year, milk alternative sales are continuing their upward rise, logging a 3.8% increase in dollars and a 1.5% increase in units, according to IRI data for the 52 weeks ending April 17. Meanwhile, for the same time period, dairy refrigerated milk experienced a 1.7% uptick in dollar sales and a 4.2% decline in units.
Why do plant-based alternatives have a much higher household penetration in milk than in meat — 42% versus 19% in 2021, per GFI data? One key reason is likely lactose intolerance, a condition where the body develops a reduced ability to digest lactose, the sugar present in dairy milk, notes Anne-Marie Roerink, president of San Antonio-based 210 Analytics. In the United States, about 36% of people have lactose malabsorption, according to the National Institute of Diabetes and Digestive and Kidney Diseases, with African Americans, Native Americans, Asian Americans and Hispanics more likely to have the condition, which causes such issues as bloating, diarrhea and gas following the consumption of milk products. Therefore, as Roerink observes, while there may be a medical need to purchase milk alternatives, there’s no such need with meat.