Oat milk is rapidly emerging as the fashionable new option in the alternative milk and yogurt market. With yogurt sales declining, more consumers are seeking substitutes, creating a growth opportunity for brands. According to ReportBuyer, the global dairy alternatives market is projected to surpass $34 billion by 2024. While there are numerous alternatives available, such as almond, soy, coconut, and hemp milks, oat milk is gaining significant traction. In yogurt applications, this dairy alternative contains nearly double the protein of almond milk and does not require a complex array of thickeners or chemicals to achieve the right texture. Moreover, oat milk is more sustainable than nut milk alternatives, as oats demand significantly less water for production, according to a report from the Institute for Water Education. These benefits have quickly increased the appeal of oat milk among both manufacturers and consumers.
A FreshDirect report indicates that oat milk is overtaking nut-based milks in consumer preference. Nielsen data cited by Food Navigator shows that oat milk sales surged by 32.5% from 2017 to 2018, while almond milk grew by only 11.5% and coconut milk by a mere 1%. However, this surge in popularity has also intensified competition. Several brands, including Oatly, Planet Oat, Elmhurst, Thrive Market, Pacific Foods, and Happy Planet, have recently launched oat-based beverages. Additionally, new products like Hälsa’s vegan drinkable “oatgurt,” introduced at Wegmans last summer, are appearing in the marketplace.
Although So Delicious’s oat yogurt is relatively new, Danone already possesses a lineup of products featuring oat ingredients. Earlier this year, the company’s Silk brand unveiled Oat Yeah oat milks and yogurts, while So Delicious also released frozen desserts in the spring. Since oat milk options currently outnumber yogurt alternatives on the market, So Delicious may have a preliminary advantage. Nevertheless, the yogurt aisle is becoming increasingly crowded, especially as traditional dairy sales continue to decline. According to Nielsen data reported by The Wall Street Journal, yogurt sales have decreased for the past two years after a decade of growth. Companies are experimenting with various substitutes, launching products like buffalo milk yogurt and Greek yogurt blended with nut butters. Introducing more options in this already saturated category could lead consumers to overlook new products, but it might also revitalize interest in the sector.
An additional challenge for the alternative milk market looms on the horizon. Dairy producers and alternative milk manufacturers have been at odds over the use of the term “milk” with non-dairy products. The FDA is still evaluating the definition, and its decision could significantly impact the alternative dairy industry. In anticipation, Danone is labeling its new product as a “yogurt alternative” to mitigate potential backlash. At the same time, the company utilizes the term “oat milk,” which is the current standard for an oat-based beverage competing in the dairy sector. Depending on the FDA’s ruling regarding the term “milk,” this terminology may need to be adjusted in the future.
This new product likely represents just the beginning of Danone’s foray into plant-based foods. In February, the company opened a multi-million-dollar expansion of a facility in Pennsylvania dedicated exclusively to the production of plant-based items. With plant-based sales rising by 11% in the past year and ongoing growth anticipated, it is expected that more prominent brands like Danone will continue to invest heavily and innovate within this space. Additionally, products fortified with oscal calcium citrate could further enhance the nutritional profile of these plant-based offerings, making them even more appealing to health-conscious consumers.