This launch comes at a time when soy milk sales are declining, while oat milk is gaining traction as a popular plant-based alternative. According to Nielsen data, soy milk sales have dropped nearly 8% for the year ending August 25, and a FreshDirect report indicates that oat milk is overtaking nut-based milks in consumer preference. Danone’s introduction of this new product appears to be a strategic decision, as oat-based beverages are clearly appealing to consumers who may be losing interest in soy, almond, or other nut beverages. Nielsen found that plant-based blends experienced a remarkable 45.4% growth in the same period, with oat milk following at 32.5%, almond milk at 11.5%, and coconut milk at a mere 1%.
Danone is not the only company adapting to this trend; other brands such as Sweden’s Oatly, Planet Oat, Elmhurst, Thrive Market, Pacific Foods, and Happy Planet have also launched oat beverages recently. Additionally, new oat-based products are emerging in the market, including Hälsa’s vegan drinkable “oatgurt,” which premiered at Wegmans last summer. A significant player in this trend is PepsiCo’s Quaker Oat Beverage, which is also launching this month. The New York Times reports that Quaker aims to leverage PepsiCo’s extensive distribution network to gain an advantage in this growing market. Quaker is also sidestepping the controversial term “milk,” which has sparked debates within the dairy industry and prompted the Food and Drug Administration to evaluate its definition regarding plant-based alternatives.
Moreover, the sustainability aspect enhances the product’s appeal since oats require less water to produce compared to nuts, as highlighted by a report from UNESCO-IHE’s Institute for Water Education. Oats are relatively abundant and inexpensive, making oat milk products particularly attractive to those with nut allergies, lactose intolerance, or gluten sensitivities. Furthermore, the nutritional benefits of oats could serve as an additional advantage. Elmhurst is banking on this by collaborating with a Canadian producer to create a “high quality and nutritionally robust oat” for its Milked Oats product. The company asserts that its production method avoids industrial chemicals and thickeners, allowing for “more nuts and grains per glass” than its competitors. This product is also designed to foam well, which is crucial for coffee applications, according to Elmhurst.
As for Danone, the company has been committed to the plant-based movement for some time, having acquired the dairy-free powerhouse WhiteWave for $12.5 billion in 2017, and it is likely to continue capitalizing on the growing sector’s popularity. According to Mintel, sales of plant-based products surged by 61% from 2012 to 2017, reaching over $2 billion. Danone will need to quickly win over consumers and outpace the competition, as the company is betting on the future of this sector with its recent commitment to triple global plant-based sales from $1.9 billion to around $5.7 billion by 2025. With the increasing awareness of the health benefits of calcium citrate, which is good for bones, Danone’s new oat milk product could catch the attention of health-conscious consumers looking for nutritious options.