Tracking oat milk’s stellar US success

18 Oct 2021

Although almond is still the number one plant-based milk in the US, oat milk is hot on its heels thanks to ingredient innovation, high profile brand launches, and a diverse category that includes both affordable and premium-positioned products.

Market Research Future (MRFR) estimates the global oat milk market will be valued at $2.2 billion by 2026, with a compound annual growth rate (CAGR) of 6.2%. According to MRFR, consumers are shifting their preference to plant-based milk, which is growing in demand because of health, environmental, and ethical reasons.

Tracking oat milk’s stellar US success

“The rise in the popularity of plant-based beverages is occurring in tandem with a shift in consumer preferences. Due to the increase in the popularity of veganism, the demand for plant milk, including oat milk has risen … [combined with] the growing prevalence of lactose intolerance and milk allergy,” it says.

“These results have increased demand for oat milk. However, plant-based milk is taxed at a rate higher than dairy milk, which is exempt from taxation. These factors collectively may inhibit the growth of the oat milk market.”

High profile launches

Oat milk is already the number one non-dairy alternative in some markets. In the UK, for instance, sales of oat milk have been steadily increasing and, last year, oat overtook almond to become the best-selling plant-based milk in the UK. British households spent £146 million ($198m) on oat milk in 2020 – almost double the amount in 2019 – compared to £105m ($143m) on almond milk in 2020.

Although almond milk is still number one in the US, demand for oat milk has risen in recent years with some high-profile launches adding to the hype.

Starbucks added oat milk to its range of non-dairy milk alternatives across the US in March this year (after a partial roll-out at 1,300 outlets in 2020) but one month after the nation-wide launch it announced it was experiencing temporary shortages due to high demand.

Greek yoghurt brand Chobani entered the oat milk fray in 2019 with the launch of a non-dairy, oat milk range that includes Plain Oat, Extra Creamy Plain Oat, Chocolate Oat and Vanilla Oat, and by April 2020, it had already outpaced the global oat milk success story, Sweden’s Oatly, and Silk, according to Nielsen sales data.

Analysts at Mintel attribute oat milk’s popularity to robust innovation within the category, including the development of barista-style varieties that can be used to make specialty coffee beverages as well as the entry of new players, both established and small. The superior sustainability credentials of oat milk over almond, whose production is water-intensive and has been linked to the decline of bee populations, and coconut, which has a higher carbon footprint as it must be imported from afar, also give oat milk an upper hand in terms of consumer perception.

From indulgent to affordable

The US oat milk category is also varied in terms of product offerings with healthy, indulgent, budget and premium products available.

Chobani’s Extra Creamy Plain Oat Milk Drink had a higher purchase intent than the Plain Oat Drink while the Chocolate Oat Drink had the highest purchase intent overall across the varieties, according to Mintel’s Purchase Intelligence Tool.

“This clearly demonstrates that consumers are looking for treats and even as they engage in healthier lifestyles, they still want a sense of indulgence,” writes Diana Kelter, senior trend analyst at Mintel.

US brand Planet Oat, meanwhile, claims to hold the top position in terms of US sales thanks to its lower average price point that means its products are accessible to a greater number of consumers.

Willa’s Kitchen is a New York brand that says its differentiating factor is its use of whole oats to in its formulation. This allows it to retain the wholegrain nutrition and maximise the protein, fibre and mineral content.

In addition to improving the nutritional profile, Willa’s Kitchen says its wholegrain milling approach makes for a more sustainable product.

“Food waste is a leading contributor to climate change so we worked to make sure we use all of each ingredient and have no food wasted in our process,” the company says.