Demand for dairy alternatives is giving their conventional dairy counterparts a run for their money, and causing innovation and disruption in the marketplace. Increased interest is these products stem from many drivers, including the avoidance of dairy allergens; desire for clean label products; compatibility with vegetarian, vegan and flexitarian lifestyles; and concerns about sustainability and animal welfare.
Global sales of dairy alternatives reached nearly US$12 billion in 2017 and are expected to skyrocket to $41 billion by 2025, according to Grand View Research’s January 2019 “Dairy Alternatives Market Size, Share, Industry Trend Report 2019-2025,” which noted rising consumer focus on nutritional values such as low calories, and high proteins and vitamins offered by milk substitutes or dairy analogs will likely have a positive impact on the market.
Consumer Preferences Shifting
According to Mintel’s “The Protein Report - Meat Alternatives in the US,” published January 2017, 46%of Americans believed plant-based proteins are better for people than animal-based proteins, and 76%said plant-based foods are healthy. Consumers purchased plant-based alternatives for several reasons, including their desire to avoid processed foods (39%), manage weight (31%) or promote muscle growth (16%)—all arguably health-related reasons that have the capability to boost dairy alternative sales.
“While less than 10% of consumers identify as vegan or vegetarian, a growing number are pursuing ‘flexitarian’ or ‘lessitarian’ eating habits,” commented Pam Stauffer, global marketing programs manager, Cargill. This shift in consumer preference is putting the spotlight on plant-based ingredients and driving innovation across a multitude of product categories at the retail and restaurant levels. In fact, Mintel’s “Food & Drinks Trends 2017” reported a 25% increase in vegetarian product launches between 2012 and 2016, and a 257% increase in vegan options during the same time.
“According to Mintel, in the last 12 months alone, there have been 4,662 new products launched with a dairy-free claim globally, and the U.S. accounts for just under 22% of these launches,” noted Anne Marie Butler, Edlong Corp.’s research and development applications manager, Europe.
A 2018 Nielsen study commissioned on behalf of the Plant Based Foods Association (PBFA) found sales of plant-based foods grew by a whopping 20% in the 52 weeks ending June 16, 2018, reaching a total of $3.3 billion. With total food sales growing at just 2%, the data depict a picture in which plant-based products are no longer just a niche market.
“The new data confirm what we are hearing and seeing every day from our members: Sales are up, investment is increasing and new jobs are being created in the plant-based foods industry,” Michele Simon, PBFA executive director, said in a statement.
According to Nielsen data, plant-based milk continues to be a leading category, representing $1.6 billion at 9% growth—up 3% from the previous year. Other plant-based dairy alternatives (excluding plant-based mils) including cheeses, creamers, butter, yogurts and ice creams are experiencing explosive growth, up 50%. Plant-based yogurts rang up $162 million in sales, up 55%, followed by plant-based cheeses at $124 million (43%) and plant-based creamers at $109 million, up an impressive 131%.
However, improvements in plant-protein formulation options, coupled with greater formulation expertise, offer product developers the opportunity to capitalize on this consumer appetite for plant proteins in a variety of dairy alternative products, added Christine Addington, senior dairy technical service specialist, Cargill. “Plant-based milks certainly pioneered the category, and we see heightened interest now spreading to other dairy segments including plant-based yogurts, cheeses and ice cream,” she said.
Michael Ivey, national sales director, Butter Buds Food Inc., agreed, noting he’s seen increased demand for dairy alternatives in the snacks and seasonings, nutritional beverages/bars, ice cream and frozen yogurts categories that have been historically dominated by dairy. “Consumers want the same eating experiences they get with using dairy, only without the allergen,” he said.
The success of the plant-based industry, however, will be based on how well manufacturers can provide consumers with the great tastes and textures they enjoy from animal-sourced products.
Category Snapshot: Plant Milks
According to Mintel’s 2017 “US Non-Dairy Milk Market” report, nondairy milk sales grew an impressive 61%between 2012 and 2017 to reach $2.11 billion. While almond (64%), soy (13%) and coconut (12%) remain staples in the category, new nondairy milk types are sparking excitement as consumers look to diversify their nondairy milk repertoire. New varieties have experienced fast growth in popularity as 63% of those who have purchased pecan milk said they bought more pecan milk in 2017 than in 2016, while 58% of quinoa milk consumers said they bought more quinoa milk in 2017 than the year prior.
“While almond, coconut and soy milks remain the most popular types of non-dairy milk, other nut and plant bases are gaining traction, including pecan, quinoa, hazelnut and flax milks,” said Megan Hambleton, beverage analyst, Mintel. “Both established and new brands are taking advantage of the growing nondairy milk segment, innovating with alternative nondairy bases. Innovation will be a catalyst to drive the category forward … as both mainstream bases like almond and alternative plant bases offer added functional benefits and unique flavors.”
According to Mintel, new plant bases such as cashew and rice will allow new entrants into the nondairy milk category to eventually surpass the soy milk segment, one of the first nondairy milk segments to really take off with consumers.
New Hope’s NEXT Trend Database, which tracks products and claims at Natural Products Expo trade shows, found innovation activity for newer plant-based milks. NEXT data revealed plain oat milk's share of growth increased an impressive 376% between 2016 and 2018, followed by flavored flax milk (136%), plain cashew milk (83%) and other plant-based milks (69%).
NEXT found substantial negative share growth for flavored hemp milk, flavored cashew milk, flavored coconut milk and plain coconut milk (-80, -34, -26 and 17%, respectively. Almond milk, a pioneer in the plant-based milk category, witnessed declines of share growth for flavored almond milk and plain almond milk (-14.6 and -10.95%, respectively).
As newer and more uncommon plant proteins are used in formulating dairy alternatives, the need grows for ingredients that address challenges such as mouthfeel and lingering off-flavors. Therefore, formulating a plant-based product requires product developers to rethink and recreate the entire organoleptically pleasing and culinary functioning structure, noted Jim Jones, Ph.D., vice president of customer innovation, AAK. “Every plant-based ingredient interacts and behaves differently than its animal-based counterpart, and the combinations of vegetable proteins and structures can result in very different end results,” he said.
“What started out as replacing the milk protein with soy has expanded into several new ingredients such as almonds, peas, garbanzo beans, cashews, legumes, rice, oats, tapioca starch and fava bean powder,” Jones said, noting soy has decreased while the other ingredients are taking a larger share of the market.
He also pointed to increased interest and usage of niche ingredients such as quinoa, macadamia and hemp. While the choice of protein is important, other ingredients such as the choice of vegetable fats, oils and emulsifiers are needed to create great-tasting products. “While coconut, rapeseed, canola, sunflower, soy, palm and shea are the dominant fats and oils used in plant-based dairy globally, sal, avocado, mango and CBD are recent trending oils that may have potential,” Jones said.
Consider plant-based fats and oils as an example. “You might think it’s enough to find a solution that mimics the profile of a milk fat, however it is not that simple,” Jones said. “The food matrix in a plant-based product is completely different from a dairy product. This is why the plant-based cheese industry is struggling with the textural issues of pasty, grainy, drying mouthfeel, slicability, shredability, stretch and melt.” AAK recently launched AkoPlanet, a specialty vegetable fats and oils to address these industrywide issues and is co-developing solutions for plant-based cheese and frozen dessert companies with its customers.
Ingredient replacement in dairy alternatives can be especially challenging because they lack milk fat, which provides much of the texture and mouthfeel associated with dairy-based products. To make up for that loss in mouthfeel, formulators must rely on texturizers to build back the creamy, rich texture consumers expect.
Ingredients like native starches, chicory root fiber and pectins can help. “These label-friendly ingredients also provide functionalities such as stability, mouthfeel enhancement and syneresis control, while standing up to the harsh processing parameters that often exist in non-dairy applications,” Addington said.
Cargill offers several formulation solutions for building back creamy, rich texture. Its Oliggo-Fiber chicory root fiber comes in a variety of forms, including differing degrees of solubility, polymerization, relative sweetness and fiber content, molecular weight and branching structures. Some are particularly good at mimicking fat, creating a creamy or milky mouthfeel. The addition of chicory root fiber to dairy alternative frozen desserts also helps with freezing point depression. “In reduced-sugar applications, chicory root fiber also serves as a bulking agent, helping to create a rich, full-bodied product, and when paired with high-intensity sweeteners, it acts as a masking agent,” Addington said.
The company recently launched a line of SimPure starches that leverage unique functional benefits from a variety of botanical sources. “In plant-based applications, Cargill’s SimPure starches work well in vegan pudding and yogurt applications, along with dairy-alternative beverages, providing a creamy and indulgent mouthfeel.”
Pectin is used in many dairy alternative beverages, especially low-pH applications, by helping protect the proteins and keep them in suspension. Cargill offers pectins specifically designed to surround protein molecules, preventing them from breaking down and keeping them in solution. “Cargill’s pectins, sometimes used in combination with gellan gum or carrageenan, help maintain mouthfeel and prevent protein sedimentation throughout the product’s shelf life,” Addington noted.
“Recognizing the role that natural, dairy-free dairy flavors can play in overcoming taste and texture drawbacks in dairy alternatives is essential for both improving taste and shortening the commercialization of product launches,” Butler said. “Flavors can be added at the beginning of the development process to bring a dairy alternative base to neutral, to mask grassy or beany notes, and to counter astringency or chalkiness. Natural, dairy-free dairy flavors also can be used to add the fatty mouthfeel that is often missing in plant-based products.”
Edlong recently conducted two different sensory evaluations of a beverage containing both rice and pea protein. They trialed two different versions, each containing different natural, dairy-free dairy flavors. “Using a combination of milk and sweet dairy flavors we were able to make a significant impact by decreasing the cardboard notes and the residual bitterness in the finished application,” Butler said. “These findings demonstrate how developers can expand product range with the addition of natural, dairy-free dairy flavors.”
A Formula for Success
As Ivey noted, plant-based ingredients often lack dairy-based characteristics that are distinctly associated with fats such as richness, mouthfeel and masking. Fortunately, today’s range of ingredients provide product developers the necessary tools to create the satisfying taste and indulgent richness consumers expect from traditional dairy applications in dairy-free formats.