From a standing start in January 2019, Planet Oat (owned by dairy co HP Hood) generated retail sales of $234m in the 52 weeks to Sept 4 (IRI data spanning Planet Oat's oatmilk, creamers and frozen desserts), up 60% year-on-year, with a volume share in oatmilk of 38% ahead of Oatly at 20% and Chobani at 17%.
According to HP Hood, Planet Oat oatmilk has the largest group of buyers at nearly 9.4 million, followed by Chobani Oat at 5 million.
The brand has also started to pick up traction in foodservice, building a successful partnership with ‘Dunkin secured in 2020 and forging some soon-to-be announced tie ups with other high-profile QSR brands, SVP marketing and R&D Chris Ross told FoodNavigator-USA.
Feeling 'uncomfortable at all times'
But there is zero room for complacency, insisted Ross, who says if you’re not feeling “uncomfortable at all times” in the cutthroat world of CPG you’re probably heading for a fall.
The experience of PepsiCo - which jumped in, and rapidly out, of the category with the ill-fated Quaker Oat Beverage – is a case in point; while Coca Cola – for all its market clout and expertise – has not yet gained any meaningful traction with its Simply Oat offering.
Oatly, meanwhile, has been growing at an impressive clip in the US, but has experienced some well-publicized operational challenges, and continues to generate significant net losses; while Danone – a leading player in plant-based milks overall through its Silk brand, has not (yet) made it into the top three in the oatmilk subsegment, and has not set the world on fire with its Nextmilk offering (which combines oatmilk with coconut and soy).
40% less sugar
“There are lot of great brands in this space,” said Ross, “and I have nothing but the utmost respect for all of them, but I think we managed to hit a couple of things right out of the gate with an approachable brand and an outstanding product that is creamy - without oils - and has fewer calories and less sugar [at 4g for its original oatmilk, Planet Oat has 40% less sugar than Chobani Oat and Oatly – both with 7g].”
HP Hood – which manufactures its core oatmilk products in-house at facilities in New York and California (it uses a co-packer for its shelf-stable product and frozen desserts) – also spread its bets from a procurement perspective enabling it to weather pandemic-fueled supply chain challenges and last year’s sub-optimal oat crop more effectively than some other players, said Ross.
“I think that our preparedness allowed us to ride this out, but we’re all facing similar challenges in the market.”
Oatmilk the only segment bringing new users to the plant-based milk category
Going forward, while sales growth is slowing as the category matures, not helped by pricing, which all players have had to take recently, there’s still a lot of runway for oatmilk, which is “arguably the only segment that's really bringing new users into the category right now,” said Ross.
Asked about space allocation, he said that some retailers are still allocating more space to the overall plant-based milk set, while others that were ahead of the game on building out the category are now devoting more space to oatmilk within their sets as it continues to drive category growth.
Private label, meanwhile, has not yet taken a meaningful slice of the oatmilk market, he added, although that could change over time.
For oatmilk, he said, the key driver remains coffee: “I’m a big believer in what I call an anchor moment. So for almondmilk, that was smoothies, and for oatmilk it’s coffee. And from there, it moves to cereal and other categories. But there are households that might have dairy milk, almondmilk and oatmilk in the fridge for different occasions or family members.”
Marketing: ‘I think there's a little bit of playfulness and quirk that exists in all of the brands in the oatmilk category’
On the marketing front, meanwhile, while Ross didn’t grab his guitar and burst into song at the Super Bowl to wax lyrical about milk without cows, several brands have adopted more playful approaches to oatmilk vs some other parts of the plant-based milk category, said Ross, who has deployed a furry blue alien to spread the word about Planet Oat in recent ads.
“I think there's a little bit of playfulness and quirk that exists in all of the brands in the oatmilk category [where Quaker Oat’s more heart health-focused approach didn’t seem to resonate]. I think there's also an optimistic celebratory lens to Planet Oat… there's a joyfulness that captures the imagination.”
‘Foodservice is a very strategic channel for us’
As to future growth opportunities, there’s a ton of opportunity in foodservice, said Ross: “We've got a great barista product that we launched literally on the eve of the pandemic, so not great timing. But we’re one of the primary suppliers at ‘Dunkin, we have a presence in a number of other smaller foodservice operators, and we have three or four active projects going on with QSR chains with a with a meaningful presence in coffee right now, so foodservice is a very strategic channel for us.”
‘I'm a big believer in the value of Instacart’
In retail, while Planet Oat is the market leader with solid ACV, there is still room to grow through new accounts and adding SKUs to existing accounts, especially in larger pack sizes, while Planet Oat has also forged solid partnerships with retailers’ e-commerce platforms, he added.
“We also have a great partnership with Amazon and I'm a big believer in the value of Instacart.”
Animal-free dairy: ‘Consumer understanding is going to be critical’
So what does HP Hood – a key player in dairy milk and plant-based milk – think is the key to reaching the 60% of consumers that are not currently buying any plant-based milk at all, and is the emerging ‘animal-free’ milk segment (featuring whey proteins made with microbes, not cows) the answer?
“As a marketer and innovator, I’m excited about animal-free dairy, but consumer understanding is going to be critical,” said Ross. “The question for consumers is what is it and why do I want it?”
Reaching the habitual milk buyer…
As for that stubborn 60% of shoppers, he said, it’s not that they are staunchly opposed to plant-based milk or animal-free options, it’s just that dairy milk is a habitual purchase and they are not really paying attention to other options... yet.
“I feel like there’s a large group of people that are just apathetic about milk in general, so you could innovate all day long, and it's not going to get their attention, but I do think over time, we will get some of them.”
Plant-based milk by numbers
Dollar sales, 52 weeks to June 12, 2022:
- Total plant-based milk: +6.4% to $2.299bn
- #1 Almond milk: -1.02% to $1.277bn (excludes blends)
- #2 Oat milk +50.52% to $527.44m (excludes blends)
- #3 Soy milk: -0.09% to $165.09m (excludes blends)
- #4 Coconut milk: -8.16% to $82.1m (excludes blends)
- #5 Pea milk: +27.37% to $60.13m (excludes blends)
- #6 Rice milk: -11.72% to $37.15m (excludes blends)
- #7 Cashew milk: -13.6% to $29.01% (excludes blends)
Source: SPINS natural enhanced and multioutlet channels, 52 weeks to June 12, 2022 (excludes Whole Foods, Trader Joe's, and c-stores)
Image credit: Chobani