Rabobank: dairy can learn from non-dairy
28 May 2018The time is right, Rabobank believes, for the dairy sector to reflect on the success of alternative dairy products and to consider applying those lessons to dairy.
Dairy alternatives are on the rise as consumers are increasingly going dairy-free, particularly when it comes to fluid ‘milk’ used on things like cereal or in coffees, notes Rabobank. More recently, biotechnology has entered the arena, brewing milk proteins through biofermentation. The time is right, the company believes, for the dairy sector to reflect on the success of alternative dairy products and to consider applying those lessons to dairy, and its thoughts are contained in the latest RaboResearch dairy report Dare Not to Dairy - What the Rise of Dairy-Free Means for Dairy… and How the Industry Can Respond.
Dairy alternatives have competed in the dairy space for decades, but competition has intensified as dairy alternatives broaden in types, styles, and categories of product, Rabobank says, noting that global retail sales growth for dairy alternatives has soared at a rate of 8% annually over the last ten years. With retail sales valued at $15.6bn, dairy-free ‘milk’ represented 12% of total fluid milk and alternative sales globally in 2017, according to Euromonitor.Nutrition, price, and flavour tend to favour dairy, Rabobank believes, but changing consumer perceptions around health, lifestyle choices, curiosity, and perceived sustainability are increasingly drawing more people to select ‘dairy-free’ products.“Global demand for dairy is expected to grow by 2.5% for years to come, with demand for non-fluid categories offsetting weak fluid milk sales,” said Tom Bailey, RaboResearch Senior Analyst – Dairy. “While it’s not essential to diversify into dairy alternatives, it would be wise for the dairy industry to at least learn one thing from the success of dairy alternatives, which may be putting the consumer first and trading in the old grass-to-glass model for glass-to-grass.”The challenge for dairy lies mostly in fluid milk, according to Rabobank, where retail sales in western Europe ($18.6bn) and the US ($12.5bn) declined at an annual rate of 5% and 3%, respectively, in the five years to 2017, according to Euromonitor.The results over the last five years have, says Rabobank, favoured dairy players who have invested in milk alternatives across the supply chain – from planting almond trees to buying brands. The investments in dairy alternatives have, it says, shown returns above standalone dairy.Related news
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