Almond Milk Growth Brings Change for Suppliers

Here’s a hot take: almond milk is a trend.

In fact, it’s more than just milk. According to Innova Market Insights, global new dairy products that feature almonds as an ingredient — including yogurt, cheese, ice cream and milks — grew 26 percent in 2016.

But as more almond-based products enter the marketplace, is that growth having a material impact on suppliers?

Specifically, almond milk has enjoyed broad appeal for its versatility; it brings value as an ingredient for cooking, as a tool for baristas creating espresso drinks, and as an alternative for dairy intolerant consumers and for those who simply enjoy the taste. In a survey conducted by FoodNavigator of 1,000 adults who consumed non-dairy products at least three days a week, flavor was identified as the most important influencer of purchase (48%). Price (37%), health benefits (36%), ingredient source (33%) and all-natural credentials (30%) were also key factors.

“More than anything, almond milk drinkers say their top reason for choosing it is simply taste preference,” said Molly Spence, director of North America at the Almond Board of California, in an email. “Innovation in flavors and formulations will provide even more choices for consumers looking to try a new non-dairy milk product.”

For suppliers, the increasing demand for almond milk and other almond-based products is generally good news. Last year, acreage used for almond cultivation in California increased 7 percent, according to the California Almond Acreage Report from the U.S. Department of Agriculture (USDA). The group projects that almond production will reach 3 billion pounds annually by 2021. Of that, organic almond production represents around 1 percent of the total.

The rise of almond milks has also accompanied a steady decline in traditional dairy. Mintel projects overall U.S. dairy milk sales to fall 11 percent from 2015 to 2020, to $15.9 billion, while estimated plant-based dairy alternatives to grow to $3 billion during that time. In some cases, dairy operations have converted either a portion or all of their operations for plant-based milk production.

According to Mintel, almond milk represents roughly 64 percent of the U.S. plant-based milk category. Over a 52-week period ending on March 25, refrigerated and shelf-stable almond milk in MULO grew by 8.9 percent and 4.7 percent respectively, compared to market losses of 11.4 percent and 11.9 percent respectively for refrigerated and shelf-stable soy milk, according to SPINS. Within the specialty and natural channels alone, sales of refrigerated almond milk products grew 7.7 percent during the period. If non-dairy milk blends that feature almond milk are included, the growth is even larger.

Even as plant-based alternatives trend upwards, there has been limited action by almond producers to specifically target that segment of the industry. Spence said that the Almond Board of California does not promote almonds as an alternative milk source, but rather its goals are to “ensure we correct any misperceptions and answer questions about it.”

These questions can range from nutritional content to liquid consistency to incorporating almond milk as an ingredient in recipes. She also noted that the Almond Board of California has not been involved in the creation of any guidelines or code of standards as they relate to the use of almonds in almond milk products.

Even accounting for its recent growth, however, almond milk is still just a small piece on the spectrum of almond-based products. In 2016, confectionery (23 percent), bakery (20 percent) and snacks (18 percent), as well as bars (12 percent) and cereal (nine percent), together accounted for 82 percent of all new almond product introductions.

“Snacking on almonds is where the bulk of usage comes from, and we don’t see that changing,” said Spence.