Bottled water beats plant beverages in draining milk’s market share
When it comes to the declining consumption of milk, one substance stands out among the increasing number of competitors.
Water. Yes… water.
“Though we often think that plant-based beverages are to blame for this decline, the data suggest otherwise. In fact, consumers are largely substituting bottled water — not plant-based beverages — for fluid milk,” Jen Walsh, vice president of insights and strategies at Dairy Farmers of Wisconsin, said during a presentation on Jan. 22 at the Dairy Strong conference in Madison, Wis.
For the past several decades, fluid milk consumption has decreased. According to Walsh’s group, customers bought 75 million fewer gallons of milk in 2017 than they did in 2016. The reasons range from innovation in the beverage aisle at the grocery store to demographic changes to decreased cereal consumption. In addition to bottled water, people drink more coffee, tea, juice and plant-based beverages.
Walsh said bottled water’s popularity has grown exponentially over the years because of large marketing budgets, innovations like flavored, sparkling and infused waters, portability without refrigeration and an ever-growing focus on health and wellness. Most people have now been taught not to drink their calories.
Beyond the bottled water craze, Walsh said it’s important to understand how customers perceive plant-based drinks in relation to milk so that milk can remain competitive in the marketplace. In general, people are largely uncertain of the differences on many beverage ingredient labels, she said.
Customers believe almond beverages are healthier than milk when comparing the nutrition labels of the two products without knowing which label belongs to which product, Walsh said. This belief occurs because calories and sugar content are lower in almond beverages.
But instead of repeatedly assessing a product for what it doesn’t have, as customers typically did 20 years ago, they now tend to keep their focus on the functional benefits of these beverages, with the exception of always trying to avoid sugar, Walsh said.
“Though those of us in the dairy industry know that the sugar found in milk is lactose, consumers do not share this understanding,” she said.
In the beverage climate of 2020, sustainability is a top priority for customers, Walsh said. Unfortunately, most customers know little about how milk compares to other beverages in this regard.
“There is a lot of ambiguity and uncertainty in consumers’ minds on this topic, which to me seems like a great opportunity for education,” Walsh said. “We know that sustainability is becoming more important to consumers in their purchase decisions, and sustainability will become an expectation for companies to offer consumers. Taste, price, convenience will always be important, but they will no longer be enough in the future.”