This month, Tom Vierhile from Datamonitor considers the threats to the milk category and finds competition closer to home than one might imagine.

Dairy milk producers have been fighting a losing battle against the likes of CSDs for the better part of half a century, with milk consumption in the US alone dropping over one-third since the 1970s. But, lately, some of the stiffest competition for dairy milk has come from within the 'milk' category itself, from a host of new non-dairy options.

When the US dairy industry first kicked off its “Got Milk?” advertising campaign nearly two decades ago, the answer to the question was either yes or no. Today, the question “Got Milk?” begs another question: “Which One?” The range of 'milk' options today is increasingly cow-free, with plant-based alternatives made with soy, almond and oats, to milks made from coconut, flax, hemp, and even ancient grains like millet and quinoa.

The move to non-dairy milk has been a long time coming. The first soy milk production took place nearly 2,000 years ago in China, but soy milk didn’t really begin to establish itself as a mainstream alternative to dairy milk until the 1980s and 1990s. Brands like Silk in the US helped expand soy milk beyond health and natural food stores to mainstream grocers. The real growth, however, only began when soy milk hit the refrigerated dairy case, positioned alongside dairy milk. Prior to this, soy milk and other non-dairy milks were often shelved in the unrefrigerated produce section of the supermarket – not a place you would go looking for alternatives to dairy milk.

Soy is still the leader in non-dairy milk, but grain- and seed-based non-dairy milks have recently become an epicentre of innovation. Flax seeds, naturally rich in omega-3 fatty acids, have helped energise the market. Flax USA’s Flaxmilk dairy-free beverage, a US launch with as much calcium as dairy milk and 1,200 mg. of omega-3 fatty acids per serving, is typical of the ramped up new product activity. A similar US introduction, Good Karma Flax Milk, pushes the omega-3 angle. Hemp is another seed enjoying success with products like Good Hemp Dairy Free Hemp Drink launching recently in Sweden and the UK. Billed as a “dairy-free alternative to milk and soya,” it provides 50% of the recommended daily intake of omega-3 fatty acids in one serving.

Ancient grains have been all the rage in the food industry of late. Suzie’s Quinoa Quinoamilk Beverage is a recent US introduction that leverages growing interest in quinoa, a top ancient grain. Dairy free, vegan and gluten-free, it has 2 grams of protein per serving, plus vitamins A and D and calcium. Martin Sokoloff, president of Brooklyn, NY-based Good Groceries Co and marketer of Quinoamilk, makes the case for the concept by noting that “quinoa milk has a good texture and a full-bodied taste” and avoids health issues connected with other non-dairy milk ingredients. Regarding those health issues, Sokoloff says that the industry is “up in the air about arsenic (in rice), while almonds and soy both have allergy issues”. Ancient grain-based milks are also trending in Europe, where Italy-based Abafoods offers milks in Farro (Spelt), Kamut, Millet and Buckwheat variants. All organic, they are geared toward consumers that want to avoid gluten and lactose.

The grain with the most potential in non-dairy milk may be oats.

Oats can make heart health claims that other ingredients cannot, leading to introductions like Vitasoy Oat Milk Bone Essentials from New Zealand. “Actively lowers cholesterol” is prominently printed on the front of each aseptic carton of this product. But, oats are about more than health; they are also naturally sweet, making oats ideal for non-dairy milks. New entries like Oat Dream Original + Calcium Oat Drink from Ireland, as well as Simpli Naked Oat Non-Dairy Beverage from the US, both leverage the naturally sweet taste of oats.

Coconuts and almonds are two other potent sources of non-dairy milk innovation. Latta Organic Coconut Milk from the US is fortified with “live and active probiotic cultures”, so consumers can enjoy cultured drink benefits in a dairy-, lactose-, gluten- and soy-free product. Tesco’s Free From Dairy line in the UK is similar, with variants like Chocolate Coconut Milk Drink which is suitable for vegetarians and free of wheat, gluten or dairy. Almonds are making significant headway among non-dairy milk alternatives, with private labels jumping on the bandwagon – a sign of growing consumer acceptance. US-based Supervalu offers Essential Everyday Almondmilk, which boasts 50% more calcium than milk and is rich in antioxidant vitamin E while being lactose- and soy-free. Kroger’s Simple Truth Chocolate Almondmilk, meanwhile, is “free from 101 artificial ingredients” and is also new in the US.

Soy milk makers aren’t standing still against this onslaught, and are now focusing on value-added launches. Dna Gaba Soy Milk, a new launch from Thailand, is fortified with GABA (gamma aminobutyric acid) that “(helps) the brain function better.” In Japan, Kikkoman Cereal Milk in a new Goma (Sesame) variety combines brown rice milk and soy milk and also contains sesamin, a nutrient said to help promote liver function. In India, V-Soy Soya Bean Milk mixes things up, with a Multi-Grain variety featuring purple brown rice, black sesame and barley, as well as soybeans.

The best days may lie ahead for dairy milk alternatives. The industry has barely begun to leverage its “green” credentials relative to cow’s milk. According to WhiteWave Foods – the maker of Silk – producing a half gallon of Silk generates 47% fewer greenhouse gasses than those generated in producing half-a-gallon of dairy milk.

Also, dairy milk has a huge water footprint. WhiteWave says that producing one carton of dairy milk requires four times more water than producing one carton of Silk. Assuming the maths is similar for other non-dairy milks, this could open up a new marketing front for plant-based, dairy milk alternatives.