The Challenges for Plant Based Dairy Alternatives

The Lempert Report
June 14, 2021

The Plant Based Foods Association reports that sales of this emerging category have now surpassed $7 billion in sales and reached double digit gains of 27% in 2020.

Plant-based foods, according to the association have also grown nine times faster than total food sales. One could argue that there are a multitude of reasons for this impressive growth during the pandemic: the consumer desire to eat more plants and less animal protein, the high interest in sustainability of the planet, the increased availability and innovation of plant-based foods and beverages, the constantly improving recipes and taste profiles of these products and in the early stages of the pandemic the lack of dairy based milk and products on supermarket shelves.

The International Food Information Council’s (IFIC) latest report Understanding Dairy Consumers’ Purchasing Behaviors and Habits offers insights into the challenges that the plant-based dairy alternatives face in the marketplace. In full disclosure, the study was supported by funding from the International Dairy Foods Association. The findings of the survey of 1,014 adults aged 18-80 was conducted among dairy-consuming consumers, therefore does not include the behaviors and attitudes of the fast-growing vegan consumer (up 500% since 2014) and now represents approximately 6% of US consumers or consumers who for whatever reason (dietary, allergies or environmental) have chosen to avoid animal dairy-based products. Even with these caveats, IFIC’s report is important for plant-based food and beverage companies and food retailers to understand the challenges to convert the much larger dairy consumer base to this emerging category. IFIC’s study finds that most Americans consume dairy-based products more often than plant-based; remember those who were surveyed are dairy consumers. The survey shows a significant variance by age. Those 55 years and older reported the highest (79.8%) degree of purchase of dairy-based foods or beverages multiple times a week. Those in the 18–34-year-old group showed the lowest at 66.8%.

In contrast only 9.9% of the 55+ consumed plant-based dairy alternatives compared with 34.1% in the 18-34 age group. In fact across all of the purchase behaviors (about once a week, about once a month and a few times a year) this age group shows the most promise for plant-based alternatives to gain market share. The report also looked at the varieties of dairy-based products as compared to plant-based and found that over the past 6 months, in the case of milk 64% consumed dairy vs 8% plant-based – however 26% sometimes chose dairy and sometimes chose plant-based. The most striking comparison was in cheese where only 4% chose plant-based, 74% dairy and 20% sometimes consumed both – underscoring the opportunity for improved taste, texture or marketing of plant-based cheeses. Yogurt-based drinks and smoothies also revel an opportunity as only 45% only buy dairy-based and 27% sometimes consumer both. Plant-based alternatives are here to stay, but only if they taste good.

The IFIC study points out that taste is still the number one determining factor in why people consume these foods.