The Next Wave Of Innovation For The Dairy-Free Milk Market

As the global market for milk alternatives gathers pace, nut milks are crowding the shelf space that soy once dominated, while new and experimental products flood the category.  

There are a number of dominant brands leading the almond milk category including Califia Farms in the US, which announced a $50m investment last September, Alpro and Blue Diamond.

But innovation in the sector is now visible, with the global market becoming much more competitive. Adam Lowry, the entrepreneurial success story behind Method cleaning products, has just entered the dairy-free market with the launch of Ripple, a pea milk which the brand claims to have 8 times more protein than almond milk.

A recent report by beverage industry publication BevNET, explores emerging trends within the segment, how these are directing the market, and which brands are leading the way – especially with new products and flavours.

According to BevNET: “As this category has grown, branding and innovation have become more important elements for both large producers and for smaller upstarts. While, on the innovation front, some brands are turning away from high pressure processing, others are looking beyond traditional almond milk, using cashews or pistachios as ingredients.”

Globally, the market is predicted to reach almost $11 billion by 2019, with Asia-Pacific holding over 50% of the share, and as more consumers choose plant-based options either because of personal preference or because of recommendations from health or nutrition professionals, lactose intolerance and other health concerns are likely to continue to be the key drivers for new product development.

Here, we look at the trends BevNET has highlighted as having the greatest influence on the segment and what this means for the future of the nut milk industry.

To HPP or not to HPP?

As safety concerns surrounding High Pressure Processing continue to rise, some companies including American brands Pop and Bottle and Three Trees are moving away from the controversial method used to extend shelf life.

BevNet argue that High Pressure Processing doesn’t add any huge flavour benefits to nut milks and so for many, the food safety risks outway the benefits.

Rachel Hurn-Maloney, founder of Alt-Milk, a fresh cold-pressed almond milk brand, said that a high percentage of their consumers say that they prefer the taste of fresh almond milk which, when served with coffee, gives it a much smoother and creamier flavour.

“We have seen that most of our customers are lifetime customers, who tell their friends, and don’t go back to long life,” she told Welltodo. “We’ve also seen our cafe partners doubling their almond milk orders every few weeks because the customers truly notice the difference in their coffee.”

However, she does acknowledge that a number of challenges are involved in getting a high quality, fresh product to customers – the main issues being perishability & product education.

“These are becoming easier,” she points out, but for some big brands and retailers it’s not enough to sway them.

Leading american-based almond milk producers like Blue Diamond and WhiteWave, both use the High Pressure Processing method, which is often called for by larger retailers who want to maintain and deliver the nutrition and flavours from raw ingredients, as well as extend product shelf life.

Flavour Innovation

Building on almond milk’s increasing mainstream appeal, a handful of brands are beginning to play with new flavours, as well as experiment with the nutritional benefits of using alternative nuts including pistachios and cashews.

California-based natural beverage and food company Califia Farms is charging forward on innovation, producing a range of flavoured almond milks including hazelnut, vanilla and toasted coconut, as well as pairing almond milk with cold brew coffee to deliver on-the-go, single serve beverages that tap into dual markets.

The business, which reported an annual sales growth of 177 percent for its almond milk products for the period ending on March 2, recently secured $50 million in minority investment from Stripes Group, a New York-based private equity firm, whose portfolio includes stakes in a number of food-related businesses.

“Stripes Group is perfectly aligned with our culture of rapid innovation and sustainability, and they are deeply supportive of our commitment to provide delicious, mindful nourishment that enables people to live healthier lives with plant-based products,” Califia Farms CEO Greg Steltenpohl said in a statement. “Plus, we love Stripes Group’s excellent track-record of supporting entrepreneurs in their efforts to build unique brands.”

While In the UK, cold-pressed juice company Imbibery, stocked in a number of gyms and cafes across London, see innovative nut milks that taste great as well as have nutritional benefits, as being an important and popular part of their offering.

The brand’s Mind Mylk, which contains matcha, cashew and chia seeds was developed in order to help heighten productivity levels and it’s a customer favourite, especially for those with specific nutritional needs.

“Nut mylks are very popular with people who have intense workout regimes as they are great sources of protein,” explained co founder Lily Rogath, who says they have seen an increase in demand for nut milks in that area.

And like Rogath and her business parter Meryl Zises, other entrepreneurs are spotting the opportunity to leverage this demand.

In the US, cold-pressed juice brand Juisi, has recently launched NÜMOO, a range of organic, dairy-free nut milks in a bid to differentiate themselves and redefine the dairy-free milk category. The line includes Strawberry Pecan, Strawberry Pistachio, and Espresso Pistachio Latte use almond, cashew and pecan nuts and retails between $4.99 to $7.99.

NÜMOO is positioning itself as a brand that ‘transcends the dairy-free lifestyle’ and is made for consumers who grew up on flavoured milk, but now seek products that are healthy and made with clean ingredients, Juisi co-founder Joe Savino told BevNET.

Product Diversification

As more consumers voice concerns about allergens and intolerances to dairy, a growing number of manufacturers are responding by expanding their portfolios to cover a range of new products made with nut milk.

The recent launch of a new line of almond milk ice cream by global giants Ben and Jerry’s, highlights just how seriously the big players are taking the nut milk category.

“There’s clearly been a demand for a non-dairy line,” Ben & Jerry’s representative Lindsay Bumps told Fortune. “We have worked for a couple of years to make these non-dairy flavors deliver on what our fans expect – from taste and texture,” she added.

And plenty of startups are jumping on the trend. The Coconut Collaborative and Kite Hill both producing almond milk yogurts to satisfy growing consumer demands.

As brands get to grips with the multitude of opportunities in the space, the nut milk category is going through a period of transition, with players both big and small trying to figure out what works and what doesn’t, as well as deciding how to position products with respect to their USP. While more consumers begin to embrace nut milks as a lifestyle choice, rather than just in response to allergies and intolerances.

“Moving forward the focus will be on higher-quality alternatives,” suggests Hurn-Maloney. “And due to the sensitivity of the product I believe there will be a lot of research and development into extended shelf life,” she adds.

Whichever route nut milk manufacturers decide to take demand is rapidly increasing, so for now, the most pressing challenge revolves around upping distribution in order to get it into more peoples’ mouths.

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