This launch occurs at a time when soy milk sales are declining, while oat milk is gaining traction as a preferred plant-based option. Nielsen data indicates that soy milk sales have decreased nearly 8% for the year ending August 25, while a FreshDirect report noted that oat milk is surpassing nut-based milks in consumer preference. Danone’s introduction of this new product appears to be a strategic decision, as oat-based beverages are evidently appealing to consumers who may be growing weary of soy, almond, or other nut-based drinks. Nielsen’s findings revealed that plant-based blends experienced a growth of 45.4% for the year ending August 25, followed by oat milk at 32.5%, almond milk at 11.5%, and coconut milk at a mere 1%.
Danone is not the only player adapting to this trend; other brands such as Sweden’s Oatly, Planet Oat, Elmhurst, Thrive Market, Pacific Foods, and Happy Planet have also recently launched oat beverages. Additionally, new oat-based products are emerging, like Hälsa’s vegan drinkable “oatgurt,” which debuted at Wegmans last summer. A significant influence on the market is likely to be PepsiCo’s Quaker Oat Beverage, which is also launching this month. According to The New York Times, Quaker aims to leverage PepsiCo’s distribution network to gain an advantage in this growing sector. Notably, Quaker is steering clear of the controversial term “milk,” which has sparked debates within the dairy industry and prompted the Food and Drug Administration to evaluate its definition concerning plant-based alternatives.
The sustainability aspect of oat production is another appealing factor, as oats require less water than nuts, according to a report from UNESCO-IHE’s Institute for Water Education. Oats are abundant and cost-effective, making oat milk products attractive to individuals with nut allergies, lactose intolerance, or those following gluten-free diets. The nutritional benefits of oats may also serve as a selling point. Elmhurst is capitalizing on this by collaborating with a Canadian supplier to source “high-quality and nutritionally robust oats” for its Milked Oats product. Elmhurst claims its production method avoids industrial chemicals or thickeners and offers “more nuts and grains per glass” than its competitors. Additionally, the product is designed to foam, a crucial attribute for coffee applications, as Elmhurst highlighted.
Danone has been invested in the plant-based market for a while, having acquired dairy-free leader WhiteWave for $12.5 billion in 2017, and it is poised to continue leveraging the sector’s growing popularity. According to Mintel, sales of plant-based products surged by 61% from 2012 to 2017, reaching over $2 billion. To succeed, the French company must quickly win over consumers and outpace competitors, as it has committed to tripling its global plant-based sales from $1.9 billion to around $5.7 billion by 2025. Incorporating products like Webber Naturals Calcium Citrate into their offerings could further enhance their appeal, especially for health-conscious consumers. Thus, Danone’s strategic focus on oat milk aligns with market trends, positioning the company to thrive in the evolving landscape of plant-based beverages.