For dairy farmers and processors, the refrigerated dairy case is more competitive than ever before – and it could become even more crowded based on current trends.
According to USDA’s Economic Research Service, per capita consumption of fluid milk was a record-low 18 gallons per person in 2016, and it’s expected to remain low with fluid milk sales in June 2018 down 4 percent from prior-year levels and down 2 percent year-to-date.
At the same time, household scanner data from Information Resources Inc. (IRI) suggest that sales of plant-and nut-based beverages will reach a record high in 2018.
A recent analysis by USDA using IRI scanner data from 2015 to July 2018 was used to estimate market shares of dairy and plant-and nut-based beverages, review regional trends in plant- and nut-based beverage consumption and estimate the prices of the competing products.
According to Farm Bureau analysis of IRI household scanner data, in 2017, more than $1.6 billion dollars of plant- and nut-based beverages were sold in the milk case. These sales were up $141 million, or 9 percent, from 2015 levels.
On a value basis, the market share of nut-and plant-based beverages has increased from under 10 percent in 2015 to more than 13 percent through July 2018. During this same time, the market share of traditional milk beverages has dropped from over 90 percent in 2015 to under 87 percent in 2018.
These market shares include only nut- and plant-based beverages that are sold in the dairy case right alongside, and directly competing with, refrigerated milk. There are also nut- and plant-based beverages that are shelf-stable and labeled “ready to drink.” When including those additional beverages, the market share grew from 13 percent in 2015 to 16 percent through July 2018, with over $2.1 billion in annual sales in 2017.
Within the category of plant-and-nut-based beverages, almond beverages represented 67 percent of the market through July of 2018, up from a 61 percent market share in 2015 (figure 1).
The growth in almond beverages has likely come at the expense of soy-based beverages and traditional milk. The market share for soy-based beverages has declined from 19 percent in 2015 to approximately 11 percent through July of 2018.
Regionally, the Northeast region leads the way, with $325 million in sales, followed by the Southeast and California at $260 million and $220 million, respectively (figure 2).
The Plains region and the South-Central region see the lowest sales at $95 million and $150 million, respectively.
In terms of market share, these products enjoy the highest share in California, at 16 percent. This is followed by the West and the Northeast at 15 percent and 14 percent, respectively. Like the U.S. average, in all these regions almond-based beverages have the largest market share.