Vegan drinks are stirring up the dairy industry

More and more people are giving up classic cow’s milk and drinking plant-based substitutes made from soy or oats. Manufacturers like Oatly, who now even want to go public, are benefiting from the boom.

From Till Bücker, tagesschau.de In addition to conventionally produced milk, organic or pasture milk in particular has become a permanent fixture on the refrigerated shelves of supermarkets and health food stores. But even those who want to do without cow’s milk can fall back on more and more plant-based alternatives. Although they look like normal milk, they are made up of water and legumes, grains or nuts. According to the EU regulation, they may not be advertised in this way either, since the term milk only refers to products of animal origin. Even references to it could soon be banned. But regardless of whether it’s soy, oat, almond, coconut, cashew, pea or pistachio drinks: For a long time they were considered niche items for people with allergies or intolerances such as lactose intolerance. In the meantime, however, they are also popular with many other consumers – especially vegans. Every tenth liter of milk now comes from substitute products.

Classic cow milk less popular

Around one million people and thus more than 1.5 percent of the population in Germany are vegans, said Markus Keller, managing director of the Research Institute for Plant-Based Nutrition, recently in the Deutschlandfunk . In addition, there are very many so-called flexitarians or flexigans who do not live completely without animal foods, but only want to significantly reduce their consumption. For this reason, too, fewer and fewer consumers are drinking classic cow’s milk. According to the Federal Agency for Agriculture and Food (BLE), per capita consumption last year was just under 50 kilograms per capita. For comparison: According to the Milk Industry Association (MIV), it was 56.3 kilograms in 2014. The market for substitute products, on the other hand, is growing steadily and is even larger than that for vegan meat. Milk products based on soy, oats or almonds have a share of ten percent in this country. Almost every third organic product sold is of plant origin.

Oatly goes public

According to a study by ING Bank, revenues in the European Union and Great Britain will increase from the current EUR 3.4 billion to EUR 5 billion in 2025. The management consultants of the Boston Consulting Group also expect worldwide sales five times as high in 2035 as today. Oatly is often cited as the market leader in popular milk alternatives. The Swedish group, which has exclusively supplied more than 15,000 Starbucks branches in the USA with oat beverages since March, is now aiming to go public in New York and would be the second vegan producer there after Beyond Meat. This week the company filed for an IPO with the US Securities and Exchange Commission. According to media reports, Oatly could reach a valuation of ten billion dollars, something that usually only tech companies can manage. According to their own statements, the Swedes are not yet making any profits and made a loss of $ 60 million in 2020. However, the company was able to more than double its turnover to 421 million dollars. The products are now filling the shelves in more than 20 countries. In Germany, too, Oatly is the best-selling oat milk, which is colloquially referred to as that.

Every fifth Danone product is said to be vegan

But there is great competition. The French yoghurt group Danone, manufacturer of well-known brands such as Activia, Dany Sahne and Actimel, has become the world’s largest supplier of plant-based dairy products through takeovers. Around four years ago, the French company bought the vegan pioneer WhiteWave Food, bringing in the Alpro and Provamel brands, which overall lead the market for milk alternatives in Germany.

With its Alpro brand, Danone is the market leader for milk alternatives. Image: picture alliance / dpa Because the milk giant has ambitious goals: “Every fifth Danone product in Germany will be vegetable by 2025,” said Germany boss Richard Trechman recently to the “Handelsblatt”. The plant in Ochsenfurt near Würzburg is currently being rebuilt so that vegan items can also be produced there.

Numerous companies are catching up

In addition, other milk processors have entered the business. Ehrmann tempts you with pudding made from chickpeas, Müller Milch offers plant-based drinks and even Dr. Oetker tests vegan pudding. The oatmeal manufacturer Kölln also has oat drinks in its range. Grocery chains such as Aldi, Lidl or REWE have long had their own vegan drinks on their shelves. The dairy cooperatives Deutsche Milchkontor and Arla also want to follow suit – despite criticism from farmers and the associated concerns about a further decline in demand for classic cow’s milk. Two years ago, the Schwarzwaldmilch dairy founded a joint startup with Black Forest Nature GmbH. Their organic oat drink Velike finally came onto the market in 2020. Speaking of startups: Numerous young companies have recognized the opportunity and manufacture herbal products. The well-known Samwer brothers from Rocket Internet surprisingly recently joined the Berlin startup Vly as investors.

Healthy and Sustainable?

Milk substitute products are considered healthy and sustainable. But is it really like that? The oat drink manufacturer Oatly at least refers to the sustainability of its product. Compared to cow’s milk, one liter of the oat drink causes 80 percent fewer greenhouse gas emissions, 79 percent less land use and 60 percent lower energy consumption. This is also confirmed by a study by the University of Oxford in 2018. Researchers evaluated the data from almost 40,000 farms around the world. Compared to soy, oat, rice and almond drinks, cow’s milk slipped into last place in terms of both CO2 emissions and water and land consumption. One liter corresponds to a greenhouse effect of around three kilos of carbon dioxide, while a liter of soy or almond milk is only a third or a quarter as much, respectively. In terms of animal welfare, too, the plant-based drinks do naturally well. But their balance sheet is not entirely flawless either. Experts point to the high water requirement for almond milk, for example. Whether plant-based items are healthier than animal milk is controversial. Some consider normal dairy products a staple and irreplaceable food because they contain necessary proteins, calcium, and B vitamins. On the other hand, the lower-calorie alternatives are often fortified with it and have a lower fat content. In addition, there are often no cholesterol, growth hormones or pesticides to be found in them. The ingredients can, however, vary depending on the manufacturer.