KeHE predicts: Nuts and grains to watch in the dairy aisle
Barley, hemp, pistachio and buckwheat will be ones to watch – and not just in the milk category, KeHE Distributors predicts in its 2022 macro trends report.
“Over the years, brands have been able to respond to the non-dairy consumer shift by providing suitable alternatives such as nut, rice and soy, but as consumer needs continue to evolve, so do these types of dairy alternatives,” Josh Lopez, growth solutions manager at KeHE, told FoodNavigator-USA.
The high-traffic dairy aisle, particularly refrigerated plant-based milks, still offers the most potential in the long-term, he adds, but other categories like creamers, yogurts, butters, dips and spreads, cheeses and frozen desserts offer immediate growth potential.
Vying for the spotlight
“Oats are now in the spotlight because they have a wide range of health and nutritional benefits, are allergen-friendly, and are a sustainable and environmentally friendly grain,” Lopez says.
According to SPINS data for the 52 weeks up to Nov. 28, 2021, oat-based products as dairy alternatives were up close to 77%, driving growth across major categories. Lopez highlights the exponential growth of Endangered Species’ newer oat milk baking chips and chocolate bars and OATzarella’s plant-based cheeses and frozen cheesecakes during the same period.
To capture shelf space from more established dairy alternatives or larger consumer packaged goods, he says that competing companies will have to deliver “a differentiated product that addresses a specific allergy or nutritional-related problem and has a compelling story and mission.”
Last year, dairy giant Danone debuted its Silk Greek Style Coconutmilk Yogurt Alternatives and added So Delicious cheese slices and spreads to its shreds. This month, it plans to roll out Silk Nextmilk and So Delicious Wondermilk, made with coconut oil and cream, soy, oat and chicory root to taste and perform like dairy across applications.
In the smaller vegan cheese category, startups like Grounded Foods – that ferments hemp seeds and cauliflower to create alternative goat cheese, cream cheese and cheese sauce – are competing with first movers Miyoko’s Creamery, Daiya, Follow Your Heart and Kite Hill, which are already well established in the market.
Breaking into the segment
New companies breaking into the segment promote brand ethics, allergen solutions and nutritional attributes across packaging and social media but are also focusing on mimicking the dairy experience.
Chilean startup NotCo made a splash in the US with its NotMilk in 2020, using artificial intelligence to simulate animal-derived milk with a blend of cabbage, pineapple juice, pea protein, chicory root fiber, coconut oil and sunflower oil. It already has its sights set on meeting challenges in other dairy alternative categories.
“We’re only beginning so I would say that in five years from now, we’re going to have a stretchy, melty, cheesy cheese that is not cheese,” Matias Muchnick, CEO and founder of NotCo shared in the October FoodNavigator-USA October Broadcast Series, hinting that consumers may be surprised by the ingredients.
Take Two Foods repurposes spent grain from the beer-brewing process to create its dairy-free Barleymilk. High in fiber and protein, it contains more calcium per serving than dairy milk and is enriched with vitamin D.
“Although still in its infancy, barley as an alternative has a lot of potential in years to come and brings a lot of appealing factors – especially for Gen Z shoppers,” says Lopez, citing 2021 Mintel findings that these younger consumers are highly influenced by environmental and animal welfare ethics.
Other Take Two products in the pipeline: yogurts, ice cream, cheese and creamers.