HALT-MILK: A World Reimagined – Investing in Dairy Alternatives
Consumers' preference for milk products that are not only better for our bodies, as are cases of allergies and lactose intolerance, but also for the environment is accelerating.
LENORE ELLIE HAWKINS: The global dairy alternatives market, which was valued at $20.5 billion in 2020, is expected to expand at a compound annual growth rate (CAGR) 12.5% from 2021 to 2028… Consumers’ preference for products that are not only better for our bodies but also for the environment is accelerating, as are cases of milk allergies and lactose intolerance, which also drive demand for alternatives. Concerns over the use of hormones, pesticides, and antibiotics in cows are also driving demand for dairy alternatives, as is the desire to reduce sugar intake.
Growing up, many of us “Got Milk,” so why is dairy milk problematic to the environment? There are an estimated 278 million dairy cows in the world, with 9.3 million of those in the U.S. In 2017, about 909 million tons of milk were produced by those cows, with 12% of that produced in the U.S. Here’s the thing, it takes an estimated 144 gallons of water to produce just 1 gallon of milk in the U.S., with over 93% of that water used to grow the feed for dairy cattle, because just one dairy cow eats around 100 pounds of feed a day. Simply put, dairy milk is not a resource-efficient beverage… The degree to which any of the dairy alternatives are better for the environment may be up for debate, and we won’t go into them here.
Regardless of one’s preferences, there is room for improvement when it comes to dairy. According to the recently published “Cashew Milk Market” report by Verified Market Research, there were approximately 79 million vegans worldwide, and about 68% of the global population has lactose malabsorption. That’s a big market. According to Cédric Boehm (Head of dairy for Nestlé Europe, Middle East, and North Africa), in Europe, at least four in ten shoppers are already choosing some form of dairy alternative… According to Allied Market Research, soy milk, almond milk, and rice milk are the three most popular alternatives, in that order descending…
While Asia-Pacific drives the largest portion of revenue, Europe is projected to be the fastest-growing market through 2026 due to the increasing demand for dairy alternatives, mostly by the flexitarian population. The rising health awareness among European consumers, along with environmental concerns and sustainability factors, is driving the growth of the European dairy alternatives market…
Manufacturers of dairy alternatives are typically vertically integrated through established processes which means that many of these companies manufacture food products containing dairy alternatives as well as beverages that utilize alternatives, such as almond milk or soy milk. The process involved in the manufacturing of dairy alternatives does not involve complex or prohibitively costly technology, which means there are no major barriers to entry. This makes for a highly competitive market…
Looking at the number of private companies active in the space tells us that there are not only opportunities for new entrants but also points to future opportunities for investors… The bottom line is that in the coming years, we are likely to see milk alternatives gain market share over traditional dairy and less healthy beverage alternatives. As consumers embrace these alternatives, we expect to see further development in other dairy-related markets such as yogurt and ice cream. SOURCE…
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