Dean Foods and Blue Diamond Battle for Almond Milk Supremacy

January 18, 2011

Since retailers began stocking almond milk next to cow's milk in their refrigerated cases in 2009, the dairy alternative has seen a significant spike in sales growth, and two contenders have emerged as leaders in the battle for market share. DeanFoods subsidiary WhiteWave offers PureAlmond under its Silk brand, and California nut cooperative BlueDiamondGrowers markets AlmondBreeze. The two products are in pitched battle for shelf space, to the extent that a customer purchasing SilkPureAlmond may receive a coupon for AlmondBreeze at checkout.

Non-dairy milk alternatives, though still a relatively small market, continue to find greater purchase at retail as allergy and intolerance awareness increases and vegan diets come in and out of vogue. Dairy alternatives also tend to offer lower fat and calorie content than cow's milk, making them palatable to weight-conscious consumers. In 2009, non-soy dairy alternatives (including almond, rice, hemp and coconut milk) grew over 21% to $242 million in U.S. sales, according NBJ's 2010 Healthy Foods Report. Almond milk—which saw sales growth of 13% in 2010, according to SymphonyIRIGroup—has seen especially vibrant market share gains among dairy alternatives, as cancer scares continue to drive down soymilk sales. Soymilk sales fell over 13% in 2009, according to NBJ.

Blue Diamond released AlmondBreeze in 2009, and the product is now available in the majority of U.S. grocers. Dean released PureAlmond in January 2010. SymphonyIRI pegs AlmondBreeze sales at $57.8 million in 2010, with Pure Almond close behind at $47.1 million. The successes of both brands prompted WholeFoods Market to release its own private label almond milk in August 2010.

NBJ Bottom Line

Which producer will dominate the market going forward remains to be seen. Blue Diamond, with its network of 3,000 California growers, certainly boasts a tighter grasp of its almond supply chain. The company, on the whole, has kept its profits fairly stable of late, and almonds, as a nutritious and versatile snack, represent a reliable platform for future growth. Blue Diamond grew its revenues 9% in fiscal 2010 to $775 million.

Dean, on the other hand, with quarter after quarter of declining profits, could use a safety net while wrangling in the wild world of milk. Cow's milk represents about half of Dean's total sales portfolio, a category where consumers are most likely to trade down from premium to private label in times of economic uncertainty. Almond milk is a growing category worth investing in, and Silk has an advantage of widespread brand awareness, with decades on the dairy shelves. Dean also saw a substantial climb in its stock price in the beginning of 2011, after AppaloosaManagement purchased a 7.4% stake in the company.

Either way, the competition is good for the almond milk market. Coke-Pepsi style brand face-offs build press around the products, regardless of who "wins." It will also be interesting to see how the 365 brand will fare in the coming year, because—at least in the world of dairy and all its iterations—private label and value options often resonate strongest with consumers.

Related NBJ links:

2010 Healthy Foods Report

Fish Oil and Non-Fat Yogurt for the U.S. Military?

The Silk Soymilk Two Step

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