Big Names in Plant Based

Plant-based truly is a bubble that seems like it will never burst – with an ever-increasing amount of multi-national brands recognising the demand for plant-based alternatives, the key players in the category have become household names in a matter of years. Oatly and Alpro, arguably the ‘Kings’ of plant-based, take up top positions in the competition with supermarket own brands falling closely behind with increasingly popular and affordable choices. With new launches by Mighty Pea making their way to the shelves, the category is set for a promising future.

The UK plant-based milk industry is now worth £600 million (Kantar 52 w/e 4 Dec 2016 vs 29 Nov 2020). Though “The big four” of oat, soya, almond and coconut proving to be the most popular plant-milks, overcoming the key category product challenges: taste, texture and affordability, an increasing amount of more niche and newer bases such as pea, hemp, cashew and even exotic sounding tubers such as tiger nut are increasingly popping up on the shelves.

An explosion in Oat…

Having been on the plant-based radar for longer, almond milk remains the most popular cow’s milk alternative with nearly a fifth of UK shoppers purchasing the drink during 2020 (The Grocer, 2020).

Hot on its tail is oat milk, proving increasingly popular in the UK predominantly due to its likeness to cow’s milk in terms of taste and texture, offering a creamier milk substitute alternative to almond.

An increased consumer focus on green credentials has also contributed to the rise of oat drink sales as well. The relative ease of sourcing oats within Europe means production results in lower food miles than both almond and soy, less water consumption and a smaller carbon footprint; all of which appeal to the eco-conscious customer.

Bigger production capabilities

Oatly are amongst the big-name brands to recognise the opportunity for oat on home soil, having just purchased what is soon to become the largest oat-drink production facility in Europe – a move sure to attract more overseas interest in UK exports.

This new site plans to produce 300 million litres of oat milk a year and utilise locally grown UK oats. The factory will lower the environmental impact for Oatly’s UK costumers and harness the surplus of UK oats that we have been exporting. This new site appears to be a win for Oatly, its consumers, and the UK plant-based movement.

The Key Players – Big and Small

Innovation is at the heart of the plant-based dairy sector with tough competition from an increasing number of brands. UK consumers have demonstrated their commitment to buying plant-based products which many multi-national brands can’t afford to miss out on.

Challenger brands to note include Minor Figures, Innocent, Rude Health, Koko, Plenish, Rebel Kitchen and dairy giant Arla with its range of JÖRĐ plant milks. Whilst sitting towards the premium tier of the category could potentially prove problematic in competing with own-label, each of these brands does have a well developed and executed USP – meaning we’d expect to see continued growth going forwards so long as their communications strategies continue to highlight these key points of difference.

The influence of customer loyalty cannot be underestimated either. Take Alpro, for instance; valued at £250.6m as of 2020, the brand is currently leading the plant-based category with affordable products targeted towards their loyal customer base that continue to purchase their long-time favourite SKUs whilst also buying new product releases. Oatly have also benefitted from establishing a devoted customer following, with their Barista range accrediting them a strong reputation as the consumer favourite for hot drinks, leading to a current market valuation of £84.53m.

Another Framptons ally, Mighty Pea, have also seen great success as newcomers to the oat market, having launched their newest SKU in January 2021 in nationwide supermarkets. After securing funding from The Future Fund government loan this month (June 2021) to the value of over £1 million, we can expect to see further innovations from the brand with new launches and further funding scheduled for later this year.

Room for more

Oat might be close to taking the plant-based lead at the moment but category innovation by brands such as Good Hemp could be introducing new competition in the space. Good Hemp, for example, have debuted a world first hemp seed cream whilst Nestlé have launched their Wunda pea milk, with initial releases introduced in France, the Netherlands and Portugal. Although pea arguably has a harder job to do in terms of convincing the customer it will taste and perform like a milk, it is nutritionally closest to dairy in terms of a high protein content and benefits from a low environmental impact – both factors likely to vastly increase its popularity.

Barista blends

‘Barista’ as a sub-category in itself has arguably been one of the most effective innovations within plant-based, a creamier formulation of drink specifically designed for use in coffee and hot beverages at home and in foodservice. Despite currently being the go-to for barista milk alternatives, Oatly could soon face competition from pea milk brands who benefit from the naturally thick texture of pea, which lends itself to the barista formulation. We’re also increasingly seeing Barista ‘blends’ emerging in the plant-based space, with brands such as Rebel Kitchen blending different plant bases to produce a product that delivers on taste and performance.

So, what does this mean for the future of the category?

A category rooted in new product development, plant-based shows no indication of leaving innovation behind. As plant-based milks have become increasingly popular and accessible, the quality standards of consumers have risen in turn: they are less willing to compromise on taste, texture or prices that sit outside their increasingly high expectations. As an ingredient that many feel deliver well on these three key areas, oat looks to dominate the category and overtake current leader, almond. This is not to say oat should be complacent, however, as pea-milk brands come closer to perfecting a desired taste; coupled with its thick barista-ready texture and positive environmental impact, pea could just be the next big-thing in plant-based.