Soymilk and other non-dairy products are now widely available from mainstream retailers throughout the developed world, offering consumers an alternative to cow 's milk products and often providing distinct health benefits over traditional dairy lines. Susan Bigmore reports.
Excluding goat's milk, the global market for dairy alternatives was estimated at more than $2 billion in 2002, a rise of 23 per cent from the previous year. Soymilk dominates the market with almost 80 per cent of sales and it has a significant presence in many of the world's developed markets. Other products that make up the market are other non-dairy milks, such as rice, oat and almond milks, non-dairy desserts and non-dairy cheeses.
Milking The Market
The US is the largest market for dairy alternatives. For example, the country accounts for $550 million of the total market for soymilk, with consumption at 300 million litres. Chilled varieties take 60 per cent of the total market, compared with 40 per cent for shelf-stable lines. White Wave, with the launch of Silk, pioneered the American chilled soymilk market in 1996. In 2001, Silk had a 72 per cent share of the chilled soymilk market in mainstream retail outlets, well ahead of Morningstar Foods' SunSoy with 9 per cent, although both companies are owned by Dean Foods. Other key companies in the chilled sector include 8th Continent (a joint venture between DuPont and General Mills), Hain Celestial Group and Imagine Foods (owned by Hain).
Non-dairy desserts are the next largest market, with sales estimated at $165 million in 2002. Again, the US is the largest single market, but with only a 0.4 per cent share of the total American desserts sector. Non-dairy frozen desserts make up the larger part of the US market, with the main players being Tofutti, Imagine Foods and American Oats Inc. This sector has suffered slightly from legislative issues in the UK, where they must be referred to as desserts or ice desserts rather than yoghurt or ice cream.
Penetration of soymilk is highest in Australia, since consumers there have adopted this product more readily than those in other countries, owing mainly to strong marketing support, greater competition in the marketplace and consumer interest in health. By value, soymilk has 9 per cent of the total milk market in Australia and 3.3 per cent by volume, well ahead of Japan in second place with penetration levels of 3 per cent and 1.4 per cent, respectively. In contrast to the US, fresh varieties account for approximately 23 per cent of the total soymilk market, although the ultra high temperature (UHT) category is in decline following misleading coverage in the media, supply shortages at one of the leading companies, and a general perception that chilled foods and drinks have higher quality. With the media questioning the health benefits of soy in 2000, Australian companies have successfully regained consumer credibility.
The French market, with sales of $22 million in 2001, is not as developed as other countries mentioned. The main contributory factor is merchandising. Most soy products are mixed with dietetic products and are grouped by brand rather than by product type. Accordingly, they are not shelved amongst the other health foods and do not receive the same recognition as in other countries. Companies involved in the French market are Alpro, Lima, Distriborg, Nutrition et Soja, Bjorg and Diet Century.
Rice, oat and almond varieties of non-dairy milk are not as widely distributed as soymilk and are not available in most countries world-wide. As a result, global sales of these products are estimated within $210 million. Nevertheless, they are reported to be experiencing growth with a number of products launched recently, such as Imagine Foods' Rice Dream, a rice milk originally launched in the US several years ago, but introduced in Europe in 2000, and Beneviva, an oat-based milk from Carlshamn Mejeri.
In terms of market penetration, France is the most important market with a share of 1.6 per cent, followed by Australia with 1 per cent. Alpro has been active in the French market, launching Alpro Soja Dessert Praliné, a praline cream soy-based dessert with added calcium, and Alpro Yofu, a range of organic soy yoghurts. In Australia in 2001, sales of soy-based yoghurts increased by almost 18 per cent, whilst those of soy-based ice creams were up more than 17 per cent.
Unlike the target audience for other dairy alternatives, non-dairy cheeses are targeted specifically to vegetarians and vegans. Sales for this sector are estimated to be no more than $100 to $150 million world-wide. Whilst there are some non-dairy cheeses available in the US, UK and Australia, market researchers have not uncovered such products in France. In the UK, the key players are The Redwood Wholefood Company (Cheezly), Bute Island Foods (Scheese) and Kallo Foods (From Soy), whilst Simply Better Foods (Soycheese) is active in the Australian market. The US companies Galaxy Nutritional Foods (Veggie and Soyco Foods) and Tofutti also supply the UK and Australia as well as their domestic markets.
In most countries, goat's milk is still a small, niche market with limited penetration. However, yoghurts and ice cream made from goat's milk are available in several countries world-wide. Recent product launches include St Helens Farm's Vanilla Goats Milk Ice Cream (UK) and Bernard Gaborit's Lait Frais de Chèvre Bio, an organic fresh goat's's milk in plastic bottles (France).
Here's To Your Health
Health is the primary factor driving the market, with soy being linked with a number of health benefits, including a reduction in blood cholesterol, prevention of prostate and breast cancer, and fewer hip fractures. Food allergies and intolerances are also on the increase, causing many consumers to want to change their diet. However, soy manufacturers beware some consumers are allergic to this ingredient as well, and if the number increases, other ingredients will drive demand for other dairy alternatives.
Increasing availability and consumer awareness is also helping to boost the dairy alternatives sector. These products are no longer just the domain of health and natural foods stores. Supermarkets are gaining share and now account for around two- thirds of the market by value and three-quarters by volume.
Looking Into The Crystal Ball
The total market is forecast to grow approximately 16 per cent per annum to 2006 as consumer interest and knowledge of diet and health increases, but with a slowdown nearing that year as consumer interest abates. On the other hand, growth in other non-dairy milks is predicted to outpace that of soymilk, owing to continuing innovation in the sector. Products recently launched in the non-soy-based milk market include Ceba Foods' Oatly Organic drink based on oats, water and rapeseed oil, which was launched in the Spanish market; and Fabbri Latte di Mandorla from Fabbri 1905, a shelf-stable almond drink, available in Italy.
Sales of non-dairy desserts and cheeses are forecast to increase per annum by 16 per cent and 19 per cent, respectively, during the next five years. They are still smaller, niche sectors compared with soymilk, and if they are to have a more mainstream positioning, they will need greater marketing support.
Susan Bigmore is a senior market analyst at Leatherhead Food International (LFI). The information in this article has been taken from the LFI report, The International Market for Dairy Alternatives. [email protected]