Plant-based milks: the unassuming oat has its eye on the top spot

Plant-based milks: the unassuming oat has its eye on the top spot

By
Laura Robinson
February 4, 2020

From almonds and peas to hemp and bananas - you name it, somebody’s milked it.

The global plant-based milk market is estimated to surpass $30 billion by 2029, buoyed by a surge in dairy-free and vegan diets. But for the savviest consumers, the plant-based label alone is no longer enough. Alternatives need to be nutritious, delicious and tread lightly on our planet.

This is where oat milk comes into its own. Oats are naturally gluten free, high in fiber and loaded with vitamins and minerals. Their natural starchiness gives the milk a creamier texture. They even have a lower environmental impact than many other alternatives. Given these strong credentials, Forbes recently proclaimed that 2020 will be oat milk’s biggest year yet.

The figures certainly seem to back this up. Retail sales of oat milk in the US have soared from $4.4 million in 2017 to $29 million in 2019, surpassing almond milk as the fastest-growing dairy alternative. Big Food - and even dairy companies like HP Hood and Chobani - are launching their own oat-based brands to capitalise on this trend. But as a couple of failed product launches show, companies need a crystal-clear understanding of their consumer segment to strike white gold.

Trend drivers: health, lifestyle and sustainable switches

Health, wellness and plant-based eating are clear megatrends behind a wider shift towards “better for you” products. But when it comes to plant-based milks, some have claimed that influencers’ obsession with clean eating has driven the demonisation of dairy. From brunch coffees to post-workout smoothies - alternatives have become a symbol of the glowy, healthy but indulgent Instagram lifestyles we crave.

But why oats? Buying plant-based milk also reflects our desire to switch to a more conscious and sustainable way of living. But studies have shown that their environmental impact can vary greatly. While almond and rice are water-guzzling crops, the unassuming oat needs very little in terms of water and land use. Existing acreage, currently dedicated to animal feed, could be repurposed for human consumption as demand develops - without having to increase production. And oats are also a champion cover crop, helping to control erosion and soften the soil.  

Product options: Coffee, flavoured drinks and yoghurt

While oat milk’s creamy consistency and froth-ability has made it a popular choice in coffee-based concepts, some mixologists have been getting creative. From lavender and turmeric oat milk lattes to evening hour cocktails, oat milk’s subtle flavour makes it a perfect choice when looking to create premium options for vegan customers. In retail, flavoured ready-to-drink variants are also enjoying a good growth rate. Looking to attract casually sporty, nostalgic millennials, Nesquik launched “GoodNes”, a new oat milk brand with marketing messages focussed on the product’s plant-based protein and low sugar content.

But of course, the beverage category is just the beginning. The plant-based yoghurt segment has also witnessed a 39% growth rate. Seeking to strengthen its market dominance, US brand Chobani went head-to-head with Danone when launching their new oat-based range last year. A reported 9% rise in sales in the last quarter of 2019 seems to suggest this gamble paid off.  

Getting it right, getting it wrong: Oatly and Quaker Oats

Ten years ago, hardly anyone outside of Sweden had heard of oat milk. So when Tony Petersson took over the reins of Malmo-based Oatly in 2012, he brought a leading marketer on board to give the brand a millennial and mainstream makeover. Beyond a modern design and a chatty, human tone of voice, the real stroke of genius was developing a coffee-shop friendly product and letting baristas guide the way. As commuters enjoyed their cappuccino to go - in all its frothed-to-perfection glory – a product shortage and ensuing consumer frenzy made international news. Estimates now indicate that Oatly brought in $230 million by the end of 2019.

With 142 years of experience in oats, Quakers burst into the milk arena as a confidence contender. PepsiCo marketers focussed on functional benefits, positioning their product as a higher fibre, lower-sugar heart-friendly alternative. But the product failed to impress and was dropped less than a year after launch. So what can we learn? For some, it was the underdeveloped formula, obtuse health claims and ugly plastic packaging that sounded the death knell. For others, it was the lack of values behind the brand. Unlike companies like Oatly - whose genuine passion for everything oaty shines through - value-driven millennials saw this as Big Food making an opportunistic land grab and voted with their wallets.

Pick your positioning – and communicate it clearly

The tide of public opinion can turn very quickly. So the most successful brands need to be constantly aware of emerging consumer preferences and proactively communicate to build trust and loyalty.

After a US study found traces of weed killer in various oat-based products, Oatly was quick to communicate that their products were certified glyphosate residue free. This month, Kelloggs followed suit by setting a goal to phase out glyphosate from its supply chain by 2025.

Then there’s the question of fortification. For brands seeking to attract health-oriented, vegan millennials, adding calcium or vitamin B12 could be seen as a big plus. While other consumer segments might value a more “natural” product, positioned as a genuine alternative, rather than a milk imitation.

Either way, it’s clear that brands that get it right have a lot to gain. Experts are confident that consumers will soon tire of the battle of the dairy alternatives. And when the dust settles, oat milk looks set to emerge victorious.

Business opportunities

Manufacturers

  • Consider how you could use oat milk – or other plant-based milks - to create non-dairy and vegan alternatives of existing products.
  • Rather than selling new products straight into major retailers, see if you can identify alternative distribution channels to develop a loyal fan base. Think of places and people that your target group know and trust.

Food Service

  • Experiment by developing and featuring a range of premium non-dairy drinks – from naturally flavoured lattes and milkshakes to smoothies and evening hour cocktails.
  • Try switching out dairy for oat-milk or other plant-based alternatives in a few of your menu items – from breakfast bowls and baked goods to curries and creamy pasta dishes.

Retailers

  • Consider how you could integrate oat milk or dairy-free alternatives into your grab-and-go offer, so free-from customers and ethic-oriented millennials can still enjoy their early morning caffeine hit.
  • Research shows that consumers sometimes buy more than one plant-based milk for different purposes. Try stocking a few staple alternatives – including oat milk – and then test out some more unusual alternatives, with specific functional benefits.

Written by
Laura Robinson

From policy geek to digital consultant, Laura has always enjoyed bringing people together through words or tools to drive positive change. She is most proud of finally taking the leap into entrepreneurship by founding Pink Pear Agency - a network of passionate specialists who help food businesses grow innovative projects and share their stories with the world. Laura is currently interested in project development and management, digital tools, content strategy and copywriting.

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  • Access Member Directory
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From almonds and peas to hemp and bananas - you name it, somebody’s milked it.

The global plant-based milk market is estimated to surpass $30 billion by 2029, buoyed by a surge in dairy-free and vegan diets. But for the savviest consumers, the plant-based label alone is no longer enough. Alternatives need to be nutritious, delicious and tread lightly on our planet.

This is where oat milk comes into its own. Oats are naturally gluten free, high in fiber and loaded with vitamins and minerals. Their natural starchiness gives the milk a creamier texture. They even have a lower environmental impact than many other alternatives. Given these strong credentials, Forbes recently proclaimed that 2020 will be oat milk’s biggest year yet.

The figures certainly seem to back this up. Retail sales of oat milk in the US have soared from $4.4 million in 2017 to $29 million in 2019, surpassing almond milk as the fastest-growing dairy alternative. Big Food - and even dairy companies like HP Hood and Chobani - are launching their own oat-based brands to capitalise on this trend. But as a couple of failed product launches show, companies need a crystal-clear understanding of their consumer segment to strike white gold.

Trend drivers: health, lifestyle and sustainable switches

Health, wellness and plant-based eating are clear megatrends behind a wider shift towards “better for you” products. But when it comes to plant-based milks, some have claimed that influencers’ obsession with clean eating has driven the demonisation of dairy. From brunch coffees to post-workout smoothies - alternatives have become a symbol of the glowy, healthy but indulgent Instagram lifestyles we crave.

But why oats? Buying plant-based milk also reflects our desire to switch to a more conscious and sustainable way of living. But studies have shown that their environmental impact can vary greatly. While almond and rice are water-guzzling crops, the unassuming oat needs very little in terms of water and land use. Existing acreage, currently dedicated to animal feed, could be repurposed for human consumption as demand develops - without having to increase production. And oats are also a champion cover crop, helping to control erosion and soften the soil.  

Product options: Coffee, flavoured drinks and yoghurt

While oat milk’s creamy consistency and froth-ability has made it a popular choice in coffee-based concepts, some mixologists have been getting creative. From lavender and turmeric oat milk lattes to evening hour cocktails, oat milk’s subtle flavour makes it a perfect choice when looking to create premium options for vegan customers. In retail, flavoured ready-to-drink variants are also enjoying a good growth rate. Looking to attract casually sporty, nostalgic millennials, Nesquik launched “GoodNes”, a new oat milk brand with marketing messages focussed on the product’s plant-based protein and low sugar content.

But of course, the beverage category is just the beginning. The plant-based yoghurt segment has also witnessed a 39% growth rate. Seeking to strengthen its market dominance, US brand Chobani went head-to-head with Danone when launching their new oat-based range last year. A reported 9% rise in sales in the last quarter of 2019 seems to suggest this gamble paid off.  

Getting it right, getting it wrong: Oatly and Quaker Oats

Ten years ago, hardly anyone outside of Sweden had heard of oat milk. So when Tony Petersson took over the reins of Malmo-based Oatly in 2012, he brought a leading marketer on board to give the brand a millennial and mainstream makeover. Beyond a modern design and a chatty, human tone of voice, the real stroke of genius was developing a coffee-shop friendly product and letting baristas guide the way. As commuters enjoyed their cappuccino to go - in all its frothed-to-perfection glory – a product shortage and ensuing consumer frenzy made international news. Estimates now indicate that Oatly brought in $230 million by the end of 2019.

With 142 years of experience in oats, Quakers burst into the milk arena as a confidence contender. PepsiCo marketers focussed on functional benefits, positioning their product as a higher fibre, lower-sugar heart-friendly alternative. But the product failed to impress and was dropped less than a year after launch. So what can we learn? For some, it was the underdeveloped formula, obtuse health claims and ugly plastic packaging that sounded the death knell. For others, it was the lack of values behind the brand. Unlike companies like Oatly - whose genuine passion for everything oaty shines through - value-driven millennials saw this as Big Food making an opportunistic land grab and voted with their wallets.

Pick your positioning – and communicate it clearly

The tide of public opinion can turn very quickly. So the most successful brands need to be constantly aware of emerging consumer preferences and proactively communicate to build trust and loyalty.

After a US study found traces of weed killer in various oat-based products, Oatly was quick to communicate that their products were certified glyphosate residue free. This month, Kelloggs followed suit by setting a goal to phase out glyphosate from its supply chain by 2025.

Then there’s the question of fortification. For brands seeking to attract health-oriented, vegan millennials, adding calcium or vitamin B12 could be seen as a big plus. While other consumer segments might value a more “natural” product, positioned as a genuine alternative, rather than a milk imitation.

Either way, it’s clear that brands that get it right have a lot to gain. Experts are confident that consumers will soon tire of the battle of the dairy alternatives. And when the dust settles, oat milk looks set to emerge victorious.

Business opportunities

Manufacturers

  • Consider how you could use oat milk – or other plant-based milks - to create non-dairy and vegan alternatives of existing products.
  • Rather than selling new products straight into major retailers, see if you can identify alternative distribution channels to develop a loyal fan base. Think of places and people that your target group know and trust.

Food Service

  • Experiment by developing and featuring a range of premium non-dairy drinks – from naturally flavoured lattes and milkshakes to smoothies and evening hour cocktails.
  • Try switching out dairy for oat-milk or other plant-based alternatives in a few of your menu items – from breakfast bowls and baked goods to curries and creamy pasta dishes.

Retailers

  • Consider how you could integrate oat milk or dairy-free alternatives into your grab-and-go offer, so free-from customers and ethic-oriented millennials can still enjoy their early morning caffeine hit.
  • Research shows that consumers sometimes buy more than one plant-based milk for different purposes. Try stocking a few staple alternatives – including oat milk – and then test out some more unusual alternatives, with specific functional benefits.

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From almonds and peas to hemp and bananas - you name it, somebody’s milked it.

The global plant-based milk market is estimated to surpass $30 billion by 2029, buoyed by a surge in dairy-free and vegan diets. But for the savviest consumers, the plant-based label alone is no longer enough. Alternatives need to be nutritious, delicious and tread lightly on our planet.

This is where oat milk comes into its own. Oats are naturally gluten free, high in fiber and loaded with vitamins and minerals. Their natural starchiness gives the milk a creamier texture. They even have a lower environmental impact than many other alternatives. Given these strong credentials, Forbes recently proclaimed that 2020 will be oat milk’s biggest year yet.

The figures certainly seem to back this up. Retail sales of oat milk in the US have soared from $4.4 million in 2017 to $29 million in 2019, surpassing almond milk as the fastest-growing dairy alternative. Big Food - and even dairy companies like HP Hood and Chobani - are launching their own oat-based brands to capitalise on this trend. But as a couple of failed product launches show, companies need a crystal-clear understanding of their consumer segment to strike white gold.

Trend drivers: health, lifestyle and sustainable switches

Health, wellness and plant-based eating are clear megatrends behind a wider shift towards “better for you” products. But when it comes to plant-based milks, some have claimed that influencers’ obsession with clean eating has driven the demonisation of dairy. From brunch coffees to post-workout smoothies - alternatives have become a symbol of the glowy, healthy but indulgent Instagram lifestyles we crave.

But why oats? Buying plant-based milk also reflects our desire to switch to a more conscious and sustainable way of living. But studies have shown that their environmental impact can vary greatly. While almond and rice are water-guzzling crops, the unassuming oat needs very little in terms of water and land use. Existing acreage, currently dedicated to animal feed, could be repurposed for human consumption as demand develops - without having to increase production. And oats are also a champion cover crop, helping to control erosion and soften the soil.  

Product options: Coffee, flavoured drinks and yoghurt

While oat milk’s creamy consistency and froth-ability has made it a popular choice in coffee-based concepts, some mixologists have been getting creative. From lavender and turmeric oat milk lattes to evening hour cocktails, oat milk’s subtle flavour makes it a perfect choice when looking to create premium options for vegan customers. In retail, flavoured ready-to-drink variants are also enjoying a good growth rate. Looking to attract casually sporty, nostalgic millennials, Nesquik launched “GoodNes”, a new oat milk brand with marketing messages focussed on the product’s plant-based protein and low sugar content.

But of course, the beverage category is just the beginning. The plant-based yoghurt segment has also witnessed a 39% growth rate. Seeking to strengthen its market dominance, US brand Chobani went head-to-head with Danone when launching their new oat-based range last year. A reported 9% rise in sales in the last quarter of 2019 seems to suggest this gamble paid off.  

Getting it right, getting it wrong: Oatly and Quaker Oats

Ten years ago, hardly anyone outside of Sweden had heard of oat milk. So when Tony Petersson took over the reins of Malmo-based Oatly in 2012, he brought a leading marketer on board to give the brand a millennial and mainstream makeover. Beyond a modern design and a chatty, human tone of voice, the real stroke of genius was developing a coffee-shop friendly product and letting baristas guide the way. As commuters enjoyed their cappuccino to go - in all its frothed-to-perfection glory – a product shortage and ensuing consumer frenzy made international news. Estimates now indicate that Oatly brought in $230 million by the end of 2019.

With 142 years of experience in oats, Quakers burst into the milk arena as a confidence contender. PepsiCo marketers focussed on functional benefits, positioning their product as a higher fibre, lower-sugar heart-friendly alternative. But the product failed to impress and was dropped less than a year after launch. So what can we learn? For some, it was the underdeveloped formula, obtuse health claims and ugly plastic packaging that sounded the death knell. For others, it was the lack of values behind the brand. Unlike companies like Oatly - whose genuine passion for everything oaty shines through - value-driven millennials saw this as Big Food making an opportunistic land grab and voted with their wallets.

Pick your positioning – and communicate it clearly

The tide of public opinion can turn very quickly. So the most successful brands need to be constantly aware of emerging consumer preferences and proactively communicate to build trust and loyalty.

After a US study found traces of weed killer in various oat-based products, Oatly was quick to communicate that their products were certified glyphosate residue free. This month, Kelloggs followed suit by setting a goal to phase out glyphosate from its supply chain by 2025.

Then there’s the question of fortification. For brands seeking to attract health-oriented, vegan millennials, adding calcium or vitamin B12 could be seen as a big plus. While other consumer segments might value a more “natural” product, positioned as a genuine alternative, rather than a milk imitation.

Either way, it’s clear that brands that get it right have a lot to gain. Experts are confident that consumers will soon tire of the battle of the dairy alternatives. And when the dust settles, oat milk looks set to emerge victorious.

Business opportunities

Manufacturers

  • Consider how you could use oat milk – or other plant-based milks - to create non-dairy and vegan alternatives of existing products.
  • Rather than selling new products straight into major retailers, see if you can identify alternative distribution channels to develop a loyal fan base. Think of places and people that your target group know and trust.

Food Service

  • Experiment by developing and featuring a range of premium non-dairy drinks – from naturally flavoured lattes and milkshakes to smoothies and evening hour cocktails.
  • Try switching out dairy for oat-milk or other plant-based alternatives in a few of your menu items – from breakfast bowls and baked goods to curries and creamy pasta dishes.

Retailers

  • Consider how you could integrate oat milk or dairy-free alternatives into your grab-and-go offer, so free-from customers and ethic-oriented millennials can still enjoy their early morning caffeine hit.
  • Research shows that consumers sometimes buy more than one plant-based milk for different purposes. Try stocking a few staple alternatives – including oat milk – and then test out some more unusual alternatives, with specific functional benefits.

From almonds and peas to hemp and bananas - you name it, somebody’s milked it.

The global plant-based milk market is estimated to surpass $30 billion by 2029, buoyed by a surge in dairy-free and vegan diets. But for the savviest consumers, the plant-based label alone is no longer enough. Alternatives need to be nutritious, delicious and tread lightly on our planet.

This is where oat milk comes into its own. Oats are naturally gluten free, high in fiber and loaded with vitamins and minerals. Their natural starchiness gives the milk a creamier texture. They even have a lower environmental impact than many other alternatives. Given these strong credentials, Forbes recently proclaimed that 2020 will be oat milk’s biggest year yet.

The figures certainly seem to back this up. Retail sales of oat milk in the US have soared from $4.4 million in 2017 to $29 million in 2019, surpassing almond milk as the fastest-growing dairy alternative. Big Food - and even dairy companies like HP Hood and Chobani - are launching their own oat-based brands to capitalise on this trend. But as a couple of failed product launches show, companies need a crystal-clear understanding of their consumer segment to strike white gold.

Trend drivers: health, lifestyle and sustainable switches

Health, wellness and plant-based eating are clear megatrends behind a wider shift towards “better for you” products. But when it comes to plant-based milks, some have claimed that influencers’ obsession with clean eating has driven the demonisation of dairy. From brunch coffees to post-workout smoothies - alternatives have become a symbol of the glowy, healthy but indulgent Instagram lifestyles we crave.

But why oats? Buying plant-based milk also reflects our desire to switch to a more conscious and sustainable way of living. But studies have shown that their environmental impact can vary greatly. While almond and rice are water-guzzling crops, the unassuming oat needs very little in terms of water and land use. Existing acreage, currently dedicated to animal feed, could be repurposed for human consumption as demand develops - without having to increase production. And oats are also a champion cover crop, helping to control erosion and soften the soil.  

Product options: Coffee, flavoured drinks and yoghurt

While oat milk’s creamy consistency and froth-ability has made it a popular choice in coffee-based concepts, some mixologists have been getting creative. From lavender and turmeric oat milk lattes to evening hour cocktails, oat milk’s subtle flavour makes it a perfect choice when looking to create premium options for vegan customers. In retail, flavoured ready-to-drink variants are also enjoying a good growth rate. Looking to attract casually sporty, nostalgic millennials, Nesquik launched “GoodNes”, a new oat milk brand with marketing messages focussed on the product’s plant-based protein and low sugar content.

But of course, the beverage category is just the beginning. The plant-based yoghurt segment has also witnessed a 39% growth rate. Seeking to strengthen its market dominance, US brand Chobani went head-to-head with Danone when launching their new oat-based range last year. A reported 9% rise in sales in the last quarter of 2019 seems to suggest this gamble paid off.  

Getting it right, getting it wrong: Oatly and Quaker Oats

Ten years ago, hardly anyone outside of Sweden had heard of oat milk. So when Tony Petersson took over the reins of Malmo-based Oatly in 2012, he brought a leading marketer on board to give the brand a millennial and mainstream makeover. Beyond a modern design and a chatty, human tone of voice, the real stroke of genius was developing a coffee-shop friendly product and letting baristas guide the way. As commuters enjoyed their cappuccino to go - in all its frothed-to-perfection glory – a product shortage and ensuing consumer frenzy made international news. Estimates now indicate that Oatly brought in $230 million by the end of 2019.

With 142 years of experience in oats, Quakers burst into the milk arena as a confidence contender. PepsiCo marketers focussed on functional benefits, positioning their product as a higher fibre, lower-sugar heart-friendly alternative. But the product failed to impress and was dropped less than a year after launch. So what can we learn? For some, it was the underdeveloped formula, obtuse health claims and ugly plastic packaging that sounded the death knell. For others, it was the lack of values behind the brand. Unlike companies like Oatly - whose genuine passion for everything oaty shines through - value-driven millennials saw this as Big Food making an opportunistic land grab and voted with their wallets.

Pick your positioning – and communicate it clearly

The tide of public opinion can turn very quickly. So the most successful brands need to be constantly aware of emerging consumer preferences and proactively communicate to build trust and loyalty.

After a US study found traces of weed killer in various oat-based products, Oatly was quick to communicate that their products were certified glyphosate residue free. This month, Kelloggs followed suit by setting a goal to phase out glyphosate from its supply chain by 2025.

Then there’s the question of fortification. For brands seeking to attract health-oriented, vegan millennials, adding calcium or vitamin B12 could be seen as a big plus. While other consumer segments might value a more “natural” product, positioned as a genuine alternative, rather than a milk imitation.

Either way, it’s clear that brands that get it right have a lot to gain. Experts are confident that consumers will soon tire of the battle of the dairy alternatives. And when the dust settles, oat milk looks set to emerge victorious.

Business opportunities

Manufacturers

  • Consider how you could use oat milk – or other plant-based milks - to create non-dairy and vegan alternatives of existing products.
  • Rather than selling new products straight into major retailers, see if you can identify alternative distribution channels to develop a loyal fan base. Think of places and people that your target group know and trust.

Food Service

  • Experiment by developing and featuring a range of premium non-dairy drinks – from naturally flavoured lattes and milkshakes to smoothies and evening hour cocktails.
  • Try switching out dairy for oat-milk or other plant-based alternatives in a few of your menu items – from breakfast bowls and baked goods to curries and creamy pasta dishes.

Retailers

  • Consider how you could integrate oat milk or dairy-free alternatives into your grab-and-go offer, so free-from customers and ethic-oriented millennials can still enjoy their early morning caffeine hit.
  • Research shows that consumers sometimes buy more than one plant-based milk for different purposes. Try stocking a few staple alternatives – including oat milk – and then test out some more unusual alternatives, with specific functional benefits.