Dairy vs. plant-based (STKL)
At the “Discover Dairy & Dairy Alternatives: Trends & Innovative Products” session at the National Products Expo, the alternative dairy space was called one of the fastest-growing plant-based categories. Cheese alternatives were predicted to be the “next frontier” in innovation for the space. Clean and simple ingredient labels were predicted to be the future of the dairy alternative space. Of the reasons consumers gave for consuming plant-based milk, ‘animal-based product avoidance’ indexed highest among baby boomers while ‘dairy avoidance’ indexed highest among Generation Z.
The most common label claim for dairy was non-GMO at $3.9B of sales compared with $3B for organic, $1.8B for no-added hormones, $494M for grass-fed, and animal welfare of $351M. The fastest-growing label claim in the plant-based dairy space is organic ingredients at $555M, up 19% YOY. Non-GMO was the #1 claim at $3B up 17%, gluten-free at $2.7B up 18%, and vegan at $1.6B up 15%.
Oat milk will overtake almond milk as the #1 plant-based milk, and a cleaner label/simpler ingredients is one reason. Dairy avoidance and environmental concerns are some of the reasons plant-based milk will continue to gain share from dairy. SunOpta is a leading supplier of plant-based milk. For a replay or to download the slides of our SunOpta Black Book presentation, CLICK HERE.
Dairy ban fails to pass (OTLY)
The European Parliament has shelved Amendment 171 after growing opposition from proponents of plant-based milk, environmentalists, and animal welfare groups. Critics of Amendment 171 described it as censorship of plant-based dairy products. The law would have prevented selling vegan milk in cartons, vegan butter in blocks, or displaying allergen information on products like plant-based cheese. Producers would also be prevented from displaying the climate impact of the food and presenting images of their own products.
The dairy industry backers of Amendment 171 wanted to prevent the plant-based producers from using descriptions like yogurt style, cheese alternative, or cream imitation. Currently, terms like milk, butter, and cheese are banned for plant-based products. When Sweden banned plant-based milk from using the word milk, Oatly ran a widespread marketing campaign that drew attention to the ban. The campaign boosted interest and trial that ended up driving further consumer adoption for a replay or downloading the slides of our Oatly pre-IPO Black Book CLICK HERE.
30-minute Priority Delivery (KR, DASH)
Instacart announced its “30-minute Priority Delivery,” a new online grocery service that will be launched in more than 300 stores in over 15 major U.S. cities. The participating chains include Ralphs, Safeway, Sprouts Farmers Market, and Stater Bros. Customers will be able to receive their online grocery orders as soon as 30 minutes. Instacart plans to expand the offering to more retailers and cities in the coming months. The company is also seeking to expand its 45 minute and 60-minute delivery offerings to more cities. Daniel Danker, VP of Product at Instacart, joined the company from Uber Eats in March. Danker said, “With today’s launch of Priority Delivery, we’re redefining the ‘quick run to the store’ and bringing the grocery express lane online for customers.” NielsenIQ’s survey last month showed a growing interest in quicker deliveries. 27% of shoppers considered same-day delivery in September 2020 compared to 23% a year earlier. For click-and-collect, 28% of customers chose same-day pickup in September 2020 compared to 20% a year earlier. 61% of consumers polled said they would prefer to have their products delivered as quickly as possible. In comparison, 39% said they preferred having their deliveries consolidated even if it caused a delay in shipments. It is no surprise that consumers prefer faster deliveries; the question has always been they would pay enough of a premium. The delivery companies seek more volume and use technology to reduce inefficiencies to reduce the required premium. The near-term need for order flow will weigh on margins while the market size grows.
