The plant-based drink is said to overtake soy and almonds

What started as a trend in the US and UK led by a handful of players, with Swedish brand Oatly doing much of the heavy lifting in the early days, has grown into a global industry worth more than $3.2 billion is developing and growing rapidly, although still dwarfed by the global $7.2 billion almond milk and $8.6 billion soybean industries.

The Australian market is made up of players of varying sizes, from ASX-listed Noumi’s Milklab and Sanitarium-owned Alternative Dairy Co, to smaller start-ups like Inside Out, which got their start at local farmers’ markets. The trendy milk alternative is seen by some as a lucrative business opportunity, which inspired cricketer and entrepreneur Steve Smith to launch his own version, Oat Milk Goodness (OMG).


The brand of oat milk most commonly seen in coffee shops is the blue and red cartons from The Alternative Dairy Co. Their manufacturer, the church’s Seventh-day Adventist Sanitarium, has been making plant-based milk through So Good Soy Milk for 35 years , but was late when they launched their own offering via Alternative Dairy Co. in November 2019. Yet, according to Sanitarium internal data, it has become the preferred choice of baristas in every Australian state.

“We looked at the US and UK markets and knew oats were going to be the next big thing. So we took our time and made sure that when we launched something it was going to be great,” said Rachel Glasbergen, senior business leader for Sanitarium Cafe and Foodservice.

“Actually, it comes down to three things: the taste, the creamy mouthfeel and its performance. All of these things are very similar to dairy.”

Five years ago, people were drinking non-dairy milk for lactose intolerance and ethical reasons. Now it is often simply because it is better received. “We’ve really seen now that it’s all about flavor, and they actually feel healthier… They don’t feel bloated,” Glasbergen said.

“Seriously, we love dairy, we’re friends … but it only gives the consumer choice.”

According to Sanitarium internal data, The Alternative Dairy Co is the preferred barista choice in every Australian state.

According to Sanitarium internal data, The Alternative Dairy Co is the preferred barista choice in every Australian state.

It’s not just plant-based milk drinkers who are changing lanes: food data shows that oat milk is winning over many regular milk drinkers, who enjoy it non-dairy for the similar palate experience. In that sense, oats aren’t necessarily considered the drinker’s “stealer” from the other plant categories.

“The whole pie is growing, so right now we haven’t seen oats at the expense of almonds and soy,” Glasbergen said.


Ethical Drinkers

The ethical element of plant-based milk plays a notable role in consumer choice. Alternative milk producers are aware of the global trend towards sustainability in purchasing decisions. The first oat milk barista to break onto the Australian scene, Minor Figures started out as a cold brew maker in London but was forced to change after their coffee boss, James Wise, went vegan.

“He couldn’t try any of our products,” said Melbourne-based co-founder Jonathan Chiu. “It wasn’t very strategic, but it just led to oat milk.” Today, the oat milk range (Everyday, Everyday Light, Barista, Barista Light, Barista Organic) accounts for 90 percent of Minor Figures’ sales.

A University of Oxford study shows that a glass of oat milk consumes a third of the emissions required for a glass of cow’s milk and a fraction of the land or water use. Oat milk has found some fans among former almond milk drinkers after it was revealed how much water (371 liters) it takes to make a single liter of the nut-based beverage.

Minor Figures — whose CEO includes Stuart Forsyth, a co-founder of KeepCup — has leaned even more heavily on its sustainability credentials (they’re B-Corp certified and carbon neutral) to win over the latest generation of consumers.

“We don’t have the marketing budgets of Sanitarium or those bigger companies,” Chiu said. “All these years later, it’s still in the spirit of the business … I think authenticity is probably more likely to resonate with younger consumers.”

The strategy seems to be working: Ona Coffee chose Minor Figures as their oat milk supplier from day one. While aroma and flavor are the defining factors, the specialty roaster is picky and thoughtful about the brands it works with — for example, it’s stayed away from Oatly, in part because of the way they’ve positioned themselves against the dairy industry, he says murfet

“We look through the lens of our values ​​- we value excellence and innovation as well as community and sustainability, these are core values ​​of our company,” he says.

The popularity of oat milk has skyrocketed in the last two years — and it has more to come.

The popularity of oat milk has skyrocketed in the last two years — and it has more to come.Credit:Brook Mitchell

“Oat milk companies are really good with the community at bringing baristas into this community, hosting events… Oat milk companies market theirs [product] way better than anyone soy or almonds.”

After oat milk, what’s next?

Aside from the usual suspects, consumers shouldn’t be surprised when they see new plant-based dairy products made from hemp, peas, potatoes or rice, as new players push the boundaries of this category.

Sanitarium’s Glasbergen announces that Alternative Dairy Co is fine-tuning a coconut milk specifically aimed at New Zealanders. “Kiwis love the taste. Almond as a segment isn’t that big in New Zealand…it’s important for us to get coconut into the market so we can have the full range there,” she says.

But everyone agrees that oat milk’s popularity will continue in 2023, especially in Australia. It’s predicted that its acceptance will overtake soy within 12 months, Chiu says, and almond — still the most popular plant-based milk currently — within 18 months, Glasbergen says.

Adventurous drinkers might want to try “unicorn milk,” an emerging type of plant-based milk that’s a blend of soy, almonds, and oats to create something that’s “pretty close to dairy,” according to Murfet. “It will stay,” he says.

Meanwhile, Murfet has a little advice for some baristas he sees having an oat milk sin.

“On the [the oat milk carton], it says ‘shake well every time,'” he says. “We’ve done tests where if you don’t shake it, the last bits are all solid and it often coagulates, and the beginning of it is always watery.

“If only baristas would shake [the carton]… They always forget.” The plant-based drink is said to overtake soy and almonds

Brian Lowry

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