Is Plant-Based Milk Replacing Dairy Milk?
Research suggests that consumption of plant-based milk is on the rise in the United States. However, it remains unclear whether consumers are reducing their demand for conventional dairy milk at the same time. Some studies have found that certain types of plant-based milks (e.g., soy milk) may be purchased in lieu of certain types of dairy milks (e.g., flavored dairy milk), depending on the price of the dairy product. Then again, the demand for dairy and plant-based milk may also be a result of factors beyond price, such as consumer preferences, tastes, and product availability.
In this study, researchers at The Humane League tried to investigate whether the increase in plant-based milk demand in the U.S. is what is driving the decrease in conventional dairy milk. They looked at this topic from three different angles:
- Are sales of plant-based milk enough to explain declining dairy milk sales?
- Is the demand for plant-based milk influenced by the price of dairy milk (for example, do people buy more plant-based milk products when conventional milk prices increase)?
- What is the relationship between dairy milk prices and demand over time, and what does this say about the influence of “alternative” dairy products?
To answer these questions, the authors first investigated historical sales data of plant-based milk alternatives and dairy milk, although their data were limited to specific years and only included whole and 2% dairy milk. Next, they investigated existing research on the price-to-demand relationship between plant-based milk products (including soy, almond, coconut, and “other” plant-based milks) and conventional dairy milk products. Again, their data were limited by the studies available on this topic. Finally, they looked specifically at price and consumer demand trends within the dairy milk sector, comparing the years 2002-2006 with the years 2015-2019.
The researchers were able to state that around 20% of the decline in dairy milks could be attributed to higher plant-based milk sales, but this alone was not enough to explain the decline in dairy milk consumption in the years they studied. In general, dairy milk sales were relatively unaffected by changes in plant-based milk prices, while the demand for plant-based milk varied — for example, it rose when skim milk prices increased but lowered when the prices of higher-fat dairy milk increased. However, the authors also established that the price relationship between the two were complex, and a like-for-like analysis was impossible, making their analysis difficult.
Interestingly, the authors found that dairy milk demand has been dropping steadily overall, despite price decreases. To make matters more confusing, between 2015-2019, the demand for dairy milk tended to increase when the prices also increased. These findings run contrary to economic theory. They suggested that dairy milk demand may be explained by factors other than price, such as consumer preferences, ethics, and household income. However, this is merely speculation, as they were unable to investigate other explanations.
Overall, then, the researchers could not support the hypothesis that dairy milk declines in the U.S. are directly a result of rising demand for plant-based milk products, at least not in terms of pricing. Again, though, it is important to bear in mind that the authors were limited in their data, and in many cases, the trends weren’t directly comparable.
The research team made some helpful suggestions for those wishing to investigate these consumer trends further, including focusing on other plant-based alternatives such as butter and ice cream as well as non-food products like leather. There is also a need to investigate what is driving consumer demand in the dairy sector, if it can’t be explained by price. Finally, as advocates, we can take heart from the fact that pricing is not a significant issue for those making milk purchases. And although we can’t say for certain, it may be the case that our campaigns for animal welfare, health, and the environment could be at least partially responsible for pushing consumers away from conventional milk products.