Despite seeing significant growth during the 2010-2015 timeframe, the dairy and dairy alternatives category has seen a deceleration in growth, according to experts. Although the growth will be at a slower pace, the category still is expected to continue gaining share in the beverage market going forward.
As the dairy alternatives segment has grown, it also has evolved and seen new leaders come to the forefront. Currently, almond milk is driving the dairy alternatives segment, according to Gary Hemphill, managing director of research at New York-based Beverage Marketing Corporation (BMC). Although growth in the dairy alternatives segment slowed in 2015, it will continue to see modest growth going forward, he says.
Almond milk is now America’s favorite milk substitute, boasting sales growth of 250% over the past five years. During that same period, however, the total milk market shrunk by more than $1 billion. And while almond milk still accounts for just a fraction of the total milk market (about 5%), it brings in more than twice the revenue of the other substitutes combined.
The uptrend in sales is likely the result of current health and wellness trends. According to Nielsen’s 2015 Global Health and Wellness survey, consumers rated back-to-basics food attributes like “all natural,” “no artificial colors or flavors” and “made from vegetables or fruits” the most important.
While health attributes are important factors in purchase decisions for all age groups, certain attributes are more important to younger generations. Forty percent of Generation Z respondents in the global health and wellness survey said ingredients sourced sustainably are very important in their purchase decisions, followed by Millennial (38%) and Generation X (34%) respondents, compared with only 21% of Silent Generation respondents.