2017 ADPI/ABI Annual Conference

Dairy industry sees rise of plant-based milk as ‘serious threat’

03-May-2017 - Last updated on 05-May-2017 at 08:24 GMT

There's an "anti animal protein" movement that will have a negative impact on the dairy industry if it doesn't innovate, the CEO of Select Milk said. ©iStock/RusN

Various dairy industry leaders gathered at the ADPI/ABI Annual Conference in Chicago last week to discuss the outlook for and challenges to the US dairy industry, including the rising presence of plant-based dairy alternatives.

“I think the threat is very serious,” co-founder and CEO of Select Milk Producers, Mike McCloskey, said. “I think that many people have stolen the identity of milk over the years and we as an industry have sat back and not responded like we should have.”

Sharing a simpler point of view on the rising competition dairy faces from plant-based milk alternatives, Sheryl Meshke, co-president and CEO of the Associated Milk Producers Inc., said, “If you think of the word ‘milk’ as a brand, they stole our brand which really conveys the fact that it’s a powerful nutrient-packed product.”

Consumers seek value-added

The market share of plant-based dairy alternative products is approximately 10% the size of dairy milk with $1.9bn in sales in 2015 compared to $17.8bn of sales generated by fluid dairy milk, according to Mintel.

However, it is not that consumers are specifically rejecting dairy cow’s milk, the real issue lies within the lack of innovation from the dairy industry in past years, with the exception of Greek yogurt, McCloskey said.

“The consumer isn’t really looking for plant-based milk, the consumer is looking for some added value and we have that, but we have not innovated, pushed, and protected the wholesomeness and the nutritional value of milk like we should have,” McCloskey said.

Fund it like a brand

The way to push back against the rising order of plant-based milk alternatives is to make fluid milk a relevant part of the consumer’s day like it once was. The way to regain that consumer relevance is by brands sharing transparent messaging and sharing knowledge about the nutritional value of milk within brands, Meshke said.

“We need to be more relevant to the millennial consumer,” she said.

“We have found that they [millennials] want the story, they want the cause, they want to know more about everything, It’s been very rewarding that they want to work for a cooperative and a farm to form initiative.”

To achieve this sufficiently funding the “wholesomeness” and nutritional value of milk is the only way to compete against “very well-funded” plant-based NGOs, McCloskey explained.

“We need to fund it like we fund a brand,” McCloskey said. “You have to put in the money that it’s going to take to take it back.”