Plant-based Beverage Trends and Innovations

plant-based milk latte

The dairy alternative market continues to grow as consumers look for different options in plant-based beverages

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KerryDigest Fast Facts:

  • The dairy alternative market continues to grow in the U.S., with consumers considering plant-based beverages to be a healthy alternative to traditional dairy.
  • As more alternative dairy products launch, brands are looking for new ways to gain appeal.
  • One thing helping plant-based products stand out is the use of new and novel bases.
  • Our research shows the progression of plant-based dairy trends, as well as our predictions about the alternative dairy bases that will soon be in demand.

KerryDigest Full Scoop:

It’s no secret consumers are increasing their consumption of plant-based products. The dairy alternatives market in the United States is currently a US$2.4 billion industry according to Nielsen, and NPD Crest data predicts the dairy alternative beverage market will grow 9.8% by 2023. In our Winning with Plant-based research, we found that over half of consumers who purchase plant-based items do so without having any actual dietary restrictions; they are buying plant-based products because they perceive them as being a better, healthier option.

But the alternative dairy space is getting more crowded. What started out as a few options—namely soy and almond—has now expanded to a variety of choices for consumers including beverages made from rice, coconut and oat. For brands curious about what’s next in the plant-based beverage category, we look at current market conditions and recent alternative dairy product launches in order to make predictions about the future—including new and emerging alternative dairy bases.

Almond and soy launched the dairy alternative category

Almond and soy were the first two dairy alternatives to go mainstream. Consumers liked the concept of a “non-dairy beverage” and generally found the taste and texture of these two bases acceptable as a replacement. However, in recent years consumers have begun to look for products that are better for the planet, more closely mimic the taste and texture of traditional dairy and are healthier and more nutritious. This more selective criteria has helped increase the appeal of other plant-based dairy alternatives.

plant-milk-trends-quotespouring milk over granola

Oat is a current darling of dairy alternatives

In the U.S., oat beverages reached US$252 million in sales in 2020, according to Nielsen and is the fastest-growing dairy alternative on the market, with widespread adoption in both retail and foodservice applications. Small retailers and top chains alike have added oat-based options to their menus. RTD experiences include flavored oat lattes and oat beverages with functional ingredients such as collagen and adaptogens.

The appeal of oat in beverages is multifaceted. It’s perceived as being more sustainable than almond dairy alternatives, since the production of oat bases uses significantly less water than that of almond bases. Consumers and baristas like that oat provides a hint of natural sweetness without overpowering the taste of espresso, syrups and other ingredients. And, oat is a nut-allergy-friendly option with a creamier texture than many plant-based dairy alternatives, some of which can have watery attributes.

Consumers and baristas like that oat milk provides a hint of natural sweetness without overpowering the taste of espresso, syrups and other ingredients. pouring cream in latte

Banana and barley are up and coming dairy alternative innovations

A growing number of companies are trying to make their mark on the alternative dairy space. For instance, Impossible Foods, which has been focused on meat alternatives, recently announced they are creating a new plant-based beverage, although they are keeping under wraps their formulation.

In addition to new technologies and manufacturing processes, new bases are also up for exploration. As we look to the future and what’s in store next for dairy alternatives, two newer bases gained significant traction this year: barley and banana.

Over the past 12 months, 11 products containing barley launched, according to Innova New Product Database. For one such product, Take Two Foods up-cycled spent barley from beer brewing to make a sustainable nutrient-rich barley beverage. Take Two says their barley is highly nutritious and contains, “complete protein, fiber, calcium, good fats and 50% less sugar than other flavored plant-based” beverages. This desirable profile highlights the potential of barley as a sought-after plant-based dairy alternative.

The same time period gave rise to 16 banana and banana beverage product launches, according to Innova. One company, Mooala is now offering their Original Bananamilk in a shelf stable format. While Mooala’s banana beverage is a blend of banana and sunflower seeds, another product, Banana Wave, is made of banana and oat. These formulations showcase the popularity and potential of plant-based blends, especially alternative beverages that combine traditional bases with new and novel ones.

Brands interested in testing out other alternative plant bases may want to consider ingredients such as chia, hemp and avocado, which are also disrupting the plant-based beverage category.

As you innovate in the plant-based dairy space, consider partnering with Kerry. Explore our Solution Finder to see how we can co-create with you to build plant-based dairy products with great taste and functional benefits. To learn more, contact us.

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