Almond milk may be the biggest thing to fly-off grocery store shelves since, well, sliced bread.
The toasty-tasting non-dairy product is produced by crushing roasted almonds into a buttery compound, and then adding water, stabilizers, vitamins, and a sweetener. A cup of almond milk contains about 60 calories, which is considerably lower than soymilk (90 calories) and less than half that contained in 2% milk (130 calories).
Enamored consumers have so far been willing to pay premium prices for almond milk. A 32 oz. container of almond milk costs approximately $1.80. That’s a few cents less than soy milk (still the leading dairy alternative), but far more than the cost of cow’s milk, which is roughly $1.25 per 32 oz. container.
Sales of almond milk and other milk substitutes topped $100 million last year. That’s trivial compared with the roughly $13 billion spent on cow’s milk. Still, its sales were up 15% year-over-year. Sales of cow’s milk are mired in a decades-old decline.
The increase in almond milk sales is driven by several factors aside from good taste and trendiness. Increasing awareness of dairy allergies and a steady, though modest increase in vegan lifestyles play a role, for example. In addition, there has been some cannibalization of sales from soymilk after some studies suggested that estrogen-like compounds in the latter might predispose consumers to breast cancer.
The biggest factor however, has been the decision by grocery stores to sell almond milk in the refrigerator case, right next to cow’s milk. When that happened in 2009, consumer demand began to skyrocket.
“The beauty of the almond milk category is that almonds are so familiar to consumers, and there’s an expectation of great taste there,” Brooke Hansen a marketing expert at Silk, the second-leading brand of almond milk, said in an interview.
Almond Breeze, produced by Blue Diamond Growers of Sacramento, is the market leader. Blue Diamond rolled-out Almond Breeze in 2009 shortly after market testing showed huge uptake in Hispanic populations, which have high rates of lactose intolerance. Silk, which already had a soymilk product on the market, released its version of almond milk in January, 2010. Since then, the two entrants have been duking-it out in a marketing war reminiscent of the longstanding battle between Coke and Pepsi.
Almond Breeze remains the market leader, with 2010 sales of $57.8 million. Sales of Silk were $47.1 million in 2010.
The surge in sales of almond milk has caught the attention of the dairy industry, by the way. Last spring, the National Milk Producers Federation, a lobby for dairy farmers, fired-off a letter to the FDA in which it requested that the regulatory agency ban the word “milk” from the names of these non-dairy products. The letter suggested that they should be called “plant-derived imitation products.”
How do you suppose Blue Diamond and Silk would feel about that?