Shrinking Plant-Based Beverage Sales? Hmmm…

Maybe it’s the bad taste they leave. Maybe it’s P.T. Barnum’s adage about how often you can fool people, proving itself again. Or maybe people simply are finally seeing through the marketing spin. We’ll leave the speculation to others.

But the fact is this: Plant-based beverage sales are declining. That’s the data. You hadn’t heard that? You mean that plant-based marketers and their media allies who have long touted that fake milks would lead to the “death of dairy” aren’t telling you that the novelty appears gone and that predictions of Almond Ascendance have come to naught? Sorry about that, perhaps they should have told you sooner. But the markets know, and now you do too, because here it is:

Most Milk Alternative Segments are Losing Volume in 2022

Source: IRI/DMI custom milk database; Total U.S. multi-outlets + c-stores. Volume for 2022, through May 22.

It’s been true for more than a year now. Almonds – down. Soy – down. Coconuts, rice, and “other” – down. And what’s up? Oats, pea, and horchata (which, it should be noted, is sometimes made with actual milk). But those beverages aren’t enough to stave off the widespread sector decline that’s led by almonds, which is ¾ of the category. And those pockets of isolated growth come at the expense of other plant-based beverages, cannibalizing the sector instead of growing it.

So as the FDA contemplates guidance on labeling, and proven mis-informers try to argue that their place in the market is fore-ordained – and everyone else should just go along with their blatant mislabeling – remember: Real milk is the superior product – in nutrition, taste, functionality and naturalness – and  the highly processed plant-based food propagandists know it. Maybe that’s why you haven’t been hearing much lately about how plant-based beverages are on the rise at dairy’s expense. Because they aren’t rising at dairy’s expense. In fact, they’re not even on the rise.

Plant-Based = Higher Cost, Lower Quality. Be Sure to Tell Your Barista

Vegan activists like to hand-wring from time to time about surcharges to add their favorite plant-based beverage to their coffee drinks, citing all sorts of reasons behind the alleged injustice. Here’s a simpler explanation: Plant-based additives cost more because … they cost more.

Higher costs and lower quality are hallmarks of the “innovation” behind the proliferation of non-dairy products that trade on dairy terms in an attempt to win consumer favor. The lower nutritional content of plant-based beverages is well-established, with some almond brands having one-eighth the protein of dairy and none of them having the unique blend of 13 essential nutrients that set dairy apart. But here’s a quick refresher on the cost side of the equation:

This is year-end data of the cost of a gallon of milk (all varieties) compared to alternatives, year-end 2021. Now you can see why marketers are so enthusiastic about selling highly processed oat water.

Here’s a comparison for yogurt. Not a surprise, when you look at the ingredients label of a pint of yogurt versus a plant-based alternative.

And here’s the one product in which dairy doesn’t win on price, though an asterisk should be involved. Admittedly, a pound of “Imitation Cheese” is more pocketbook-friendly than true, FDA-standard-of-identity compliant cheese – a fact that undoubtedly delights “cheese-type product” lovers everywhere.

But it’s worth noting that even imitation cheese usually contains some dairy – just not in a way that meets cheese standards of identity. Vegan varieties, on the other hand, don’t just function terribly – they cost more than twice as much as real cheese and almost four times as much as the cheaper imitations.

Why does this matter? Because in their long-running efforts to disparage dairy, opponents sometimes use bad-faith arguments to call out companies that are acting rationally when what they really need to do is a little math. Complicated and often expensive ingredients, far-flung supply chains, and high advertising costs all feed into the more-expensive structure of plant-based alternatives (and let’s not even get into profit margins).

The point is, if you’re ever in line for a latte and someone in front of you complains about paying more for an almond addition, you can always point out that their choice may cost more money because … it costs more money. Then, add some whole milk to your beverage, for emphasis. It will bring a smile to your day – and information to someone else’s.

Dairy Defined: Tough Times Arrive in Fake-Food Land

The hype couldn’t last forever.

No matter how many celebrity funders are brought on board or “next best thing” pitches are made to launch a product, eventually, over-the-top marketing comes back to bite, and that’s what’s been happening in the world of fake food. Here are a couple recent examples.

Oatly, the darling of the plant-based beverage set, lost one-fifth of its trading value in one day last month after warning it wouldn’t meet revenue expectations. As is the fashion of the day, Oatly blamed the pandemic and supply chains, but the simple truth is, consumer demand isn’t what it was earlier hyped up to be. Third-quarter sales in the Americas, expected at 40 million liters a month, fell short by 3 million.

The company is facing quality control issues as well, with a recall in its native Sweden for potential loose metal in its products. Of all the ingredients seen in plant-based beverages, “loose metal” would be among the least desired – and that’s saying a lot. Oatly’s trajectory toward making oats-and-chemicals America’s drink of choice is falling like a lead balloon – evidence of that via a battered share price, which has kept falling since the bad news was revealed, is a welcome sign of marketplace sanity.

Beyond Meat is another case study in facts can complicate an all-too-perfect narrative. Last month the company had to dramatically lower its expectations for revenue growth, using the pandemic as a cover for a consumer market that’s fizzled much faster than anticipated. Share prices fell accordingly, and like Oatly’s, they keep heading down. Beyond Meat isn’t in the fake dairy business (though it’s made rumbles), but it’s all the same story in animal agriculture, with so-called “innovators” making a short-term splash, then fading with their ad campaigns.

None of this, to be sure, means these companies are going to disappear. Overpriced, flavored plant water has been around for four decades, and while we still wonder why anyone thought they could improve upon the venerable Boca Burger, Beyond Meat has carved its niche. Consumers want variety, and consumer attraction to alternative products is something P.T. Barnum would have found completely understandable generations ago. Though we regret their effects on public health and the environment, fake foods are likely to proliferate even further, as test tubes and fermentation labs bring new imitators that will employ the same sales tricks as their plant-based predecessors. The imposters, it’s safe to say, are here to stay.

What doesn’t need to stay are lax labeling standards and consumer misinformation. A market functions better when it’s transparent – that’s true at a local supermarket as much as it is on Wall Street. This principle is becoming even more important in dairy as where-your-food-comes-from questions become even more crucial to consumer trust and honest marketing.

Over time, promotional flim-flam gets found out, and investors and the public learn that The Next Big Thing isn’t what it was cracked up to be. But the process would move more quickly – and less painfully – if consumers held a clearer understanding of true food “innovation” and better tools for identifying what a food is and what it isn’t. The sooner the puff-up-and-bust cycle is recognized, the more consumer dollars will be better directed toward more nourishing products – the ones that will survive the ups-and-downs of food fads and cash grabs.