Who needs milk?

Sales of non-dairy drinks are rising at a rapid rate in Scandinavia on the back of increased marketing by retailers and new product launches, finds a new report.

Scandinavians are the largest milk drinkers in Europe but consumer demand for non-milk drinks is being fuelled by the rising incidence in food allergies and growing awareness of the health benefits of dairy alternatives. The supermarkets are responding to this by making non-dairy drinks widely available in their stores, says the report from Organic Monitor​.

High market growth rates have encouraged a number of Scandinavian companies to start production of non-dairy products. Sweden is the leading producer in the region and also the source of two-thirds of the oat drinks sold in Europe. A number of new oat drinks have been launched in the last year, including new flavours of the leading Oatly brand made by Ceba Foods, as well as a novel yoghurt-like oat drink.

While the Swedish market is the largest in the region, accounting for a half of total revenues, the Norwegian market is projected to show the highest growth as the number of retailers offering non-dairy drinks continues to increase. Norwegian revenues are forecast to double between 2003 and 2009.

Like the rest of Europe, soya milk is the preferred milk substitute in most Nordic countries, followed by oat-based drinks. These two segments account for over three-quarters of non-dairy drink volumes. Organic varieties have 52 per cent market share of all non-dairy drinks but this share is declining, reveals the report, reflecting a move away from the early days when non-dairy products were usually organic.

In Europe overall, non-dairy drinks expanded by 22.1 per cent in 2002 to €228 million with the highest growth being observed in the British and German markets.

This growth has been driven by some important changes in the non-dairy drinks industry since the mid 1990s. Initially it was consumers suffering from allergies who bought non-dairy drinks as a dairy milk substitute. There was also high interest from vegetarians, vegans, and consumers who wanted to reduce or avoid livestock products. But consumer appeal has widened considerably in recent years due to lifestyle changes and as the health and nutrition benefits of non-dairy products have come to light.

Soya-based products in particular have benefited from scientific research linking soya consumption to low levels of cholesterol and reduced incidence of ailments like breast cancer and osteoporosis.

Increasing competition has also become a feature of the non-dairy products industry. The high market growth rates have attracted a number of new entrants although the European industry remains highly concentrated with one leading company dominating each product segment, according to OrganicMonitor research. Belgian firm Alpro, the soymilk brand, is the market leader however its market share is being eroded by new entrants, especially in the Italian and German markets.

There has also been growing interest from US companies, such as Galaxy Nutritional Foods which has joined up with Fromageries Bel to distribute its soy- and oat-based drinks in Europe.In Scandinavia, this competition along with new product development is going to fuel growth in the sector.

For details on how to buy your copy of the 1401-50 The Scandinavian Market for Non-Dairy Drinks report, click here​.