By Jana Manolakos
Once relegated to the far corner of the health food section, milk alternatives like oat, almond, peas and barley have come mainstream and have pushed the dairy industry into a tight corner of its own.
According to Nielsen data that looked at the food and beverage segments in 2020, US sales of oat beverages outperformed dairy milk, with a 212% increase in the 31-week period ending October 3, while dairy milk increased by 9%. It even outperformed almond milk, a market front-runner for years. In Canada, sales of alternative milk beverages increased by 20.9%.
Interest in plant-based foods continues to grow
At a conference hosted by the Canadian Institute of Food Science and Technology in October, Jenna Kuori, Business Development Manager for Plant-Based Proteins, Ingredion Canada, explained that sustainability, functionality and taste are key drivers for innovating in the plant-based alternatives space.
She referenced a 2020 Food and Health Survey by the International Food Information Council, which showed that 34% of consumers consider sustainability when purchasing food. “Sustainability is becoming increasingly important in terms of product claims and positionings,” she said. “It encompasses products and processes that are, first, good for the planet, so they are environmentally-friendly and clean label. This includes non-GMO and organic claims, animal welfare and other ethical considerations, as well as food security.”
Second, she added, health and nutrition also drive consumer choices, with 43% of consumers in that same survey assuming that plant-based is healthier than non-plant-based. “This includes enhanced and added nutrition, higher protein, and reduced sugar,” she explained.
And finally, taste is a major consideration when innovating in the plant-based space. “The product needs to deliver in terms of nutritional and plant-based requirements, while achieving superior texture, flavour, and mitigation of any off notes,” she says.
The landscape for dairy and dairy-alternative products in Canada has changed significantly over the last few years. Canada’s Food Guide has pivoted from stressing the importance of dairy to adopting more plant-based and fruit- and vegetable-based foods.
“And looking at the compound annual growth rate of product launches in Canada over the last five years, we see a 5% growth in milk-alternative products versus a 1.6% in traditional milk products,” adds Kuori.
What does the surge in plant-based beverages mean for the Canadian dairy industry?
According to Sylvain Charlebois, it spells trouble. Charlebois is a renowned expert on food distribution policy who leads the Agri-Food Analytics Lab at Dalhousie University.
Canada’s dairy supply is managed through the Canadian Dairy Commission, which sets quotas calculated on a monthly basis that balance supply with demand. However, Charlebois points out that recent trade deals signed with Asia and Europe allow more dairy products to enter the Canadian market tariff-free. “These measures created a breach in our supply management system,” says Charlebois. “Which is why the Federal Governmentopted to throw nearly $2 billion over eight years at dairy farmers. But the real menace may be on the domestic front, with consumers clearly longing for choice,” he adds.
Charlebois believes that the surge in non-dairy beverages is taking a heavy toll on farms and processing plants. “Saputo recently announced the closure of two plants, one in New Brunswick and the other one in Trenton, ON. Meanwhile, Canada’s largest dairy cooperative, Agropur, is facing financial headwinds. Difficult decisions are looming at Agropur and the storyline is all about how the market is flirting with plant-based alternatives,” he says.
And while a majority of younger consumers are leading the trend on alternative beverages, in large part because of their belief in the value of sustainability, it may not be that clear cut.
Lesley Srivastava, a senior account manager for Canadian food processing giant Cargill, says that agriculture is responsible for approximately 8% of the world’s total greenhouse gas emissions, with about half coming from livestock and half from crop production. “Diesel and gas are used to plant and cultivate, harvest and transport crops, producing CO2. Large quantities of natural gas are used to manufacture fertilizers that promote plant growth.” Once applied, those fertilizers produce nitrous oxide, a greenhouse gas 300 times more dangerous to the environment than carbon dioxide.
“To reach our greenhouse gas reductions by 2030, we need to find a way to balance that target with policy, profitability and sustainability,” she adds.
On another front, in 2020 almost 30,000 metric tons of California almonds made their way into Canada. That’s good news for the industry, but bad news for the environment. It takes over 8,637 L of water to grow 1 lb. of almonds, a costly endeavour in the face of California’s water shortage.
For Dairy Farmers of Canada (DFC), their ethical and sustainable practices are expressed in the Blue Cow logo. It’s seen on dairy products made from Canadian milk they say have met high standards in animal care, food safety, milk quality and sustainable production.
The industry recently teamed up with environmental organizations to promote sustainability in the dairy sector aimed at improved farming productivity, waste reduction, tree plantings and responsible resource management. The marketing campaign, Here for Tomorrow, features projects underway on Canadian farms working on sustainable outcomes.
Rob Kowal, president of Kriscor & Associates, a Canadian company providing functional and nutritional ingredients to food manufacturers, says the market for milk alternatives has contributed to a glut in innovative products entering the space.
From Canadian rock icon Bryan Adams’ investment in BC-based Bettermoo(d) to dairy giants like Gay Lea pushing coconut whipped toppings and newcomers like Not Milk, a pea protein and sunflower oil drink that claims to taste just like milk, next-generation producers are riding the wave of consumer demand for lactose-free and trans fat-free, easily digestible proteins and beverages, pushing milk products to ‘moove’ on over.