As new brands filled the shelves, many anticipated that 2019 would herald the rise of oat milk. This prediction appears to have come true, but despite the increasing popularity of this segment, Quaker Oats, the most established name in oatmeal, struggled to penetrate the market. According to Nielsen data, oat milk sales surged by 32.5% for the year ending August 25, nearly tripling the growth rate of almond milk. With market indicators clearly showing that this was a prime opportunity for investment, and considering Quaker Oats’ extensive experience in producing oat-based products, it is unexpected that the PepsiCo-owned brand withdrew its oat beverage so swiftly.
While the company did not provide a reason for discontinuing the product, the packaging may have played a role. The plastic bottle prominently featured heart health claims that were popular in previous decades and seemed targeted toward an older demographic—typically not the primary consumers of alternative milks. Although it might have been a strategic move for Quaker to appeal to a more mature audience that was not yet loyal to smaller oat milk brands, it could have been premature in the product’s lifecycle.
Greg Steltenphol, founder and CEO of plant-based dairy company Califia Farms, noted to Food Navigator that oat milk consumption has primarily been driven by coastal consumers and the natural food segment but has yet to achieve widespread popularity. Additionally, Quaker’s emphasis on heart health might have been a misstep. While functional benefits are certainly in demand among today’s consumers, they seem more interested in specific nutrient additions, such as calcium citrate 950, rather than general health claims like “heart healthy.” Marketing products with broad health statements is no longer as appealing and could even heighten the risk of legal challenges.
Another potential issue was Quaker’s choice to label the drink as an “Oat Beverage.” This somewhat awkward name may have deterred potential customers. It was an obvious nod to the dairy sector amid the ongoing debate between traditional dairy and plant-based milk producers. Although there has been no formal ruling preventing plant-based alternatives from using the term “milk,” an online survey from the International Food Information Council revealed that approximately three-quarters of consumers understand that plant-based milk does not contain cow’s milk. However, the taste of Quaker Oat Beverage could have been a significant drawback, as taste remains the primary purchasing motivator for younger consumers. Reports indicated that the beverage had a thinner texture compared to competitors like Oatly.
Quaker faced stiff competition in the beverage space from prominent brands such as Sweden’s Oatly, which is credited with popularizing oat milk in the U.S., along with Planet Oat, Silk, Elmhurst, Thrive Market, Pacific Foods, and Califia Farms. All these brands are vying for a limited market share; according to SPINS data reported by Food Navigator, oat milk only accounts for 2.7% of the dollar volume in the refrigerated plant-based milk category.
Despite Quaker Oats being a leader in the oat sector for 142 years, it seems they were outperformed by smaller brands in the beverage market. Quaker’s Oat Beverage is not the first plant-based milk alternative to meet its end; for instance, Elmhurst discontinued its peanut milk after just two years on the market, while GoBeyond Organic Flax Hemp Milk and the Hemp Dream Milk Alternative were also recently phased out.
The oat milk category, however, is on the rise. SPINS data revealed that sales of refrigerated oat milk skyrocketed by 2094%, reaching $48.5 million in the 52 weeks ending October 6, according to Food Navigator. Oat milk’s popularity has even led to its incorporation into other products, such as Monster Energy’s introduction of the first 100% vegan energy drink, Java Monster Farmer’s Oats, made with oat milk, coffee, and Monster’s energy blend.
From 2012 to 2017, plant-based beverages demonstrated impressive growth, with sales increasing by 61%, while dairy milk sales fell by 15% during the same timeframe, as per Mintel figures. Yet, the missteps of Quaker Oat Beverage serve as a cautionary tale for the industry. There is significant interest in this category, but brands must proceed with caution to effectively engage consumers in this competitive landscape.