Start a Plant Milk Company

Plant-based milk or dairy-free/alternative milk is a plant beverage with a color resembling that of milk but made from plants such as almonds or soy. Plant milks are non-dairy beverages made from a water-based plant extract for flavoring and aroma it is consumed as an alternative to dairy milk predominantly consumed by vegans, people who care about the environmental impact of cow’s milk, and in recipes like coconut milk in curries. There are also health benefits to plant-based milk such as for lactose-intolerant people.

This is a still-developing market, it is still quite expensive locally but it is growing especially due to social media “influencing” where the tide is turning against cow’s milk in some quarters. The opportunities are in cheaper local alternatives to expensive imported “milks” such as Oatly but also in the B2B market supplying coffee shops so people can brag on social media that they had a 50/50 oat and almond milk hybrid in their latte macchiato. Right now the fastest way to market for a new entrant will most likely be contract manufacturing a private label house brand.

Different types of plant based milks
The most common types of plant-based milks are almond milk, coconut milk, rice milk, and soy milk. Other plant milk include hemp milk, oat milk, pea milk, and peanut milk. There are plant-based milks made from grains, pseudocereals, legumes, nuts, seeds and even hybrid blends of mixing the two together.

How plant-based milks are made
Now many people dabble with making their own plant-based milks usually oats, from a business perspective it’s not really viable to do it that way due to the scale required to keep the cost low. The raw materials would also be purchased in large quantities. Here a barista-style oat milk is made, the oil is added as the milk will be foamed, you can watch the video below that to see why. They are also using oat flour which unlike homemade crushed oat milk does not need to be filtered.

I think it is firstly important to research the local market to make sure there is sufficient demand. For example, Woolworths already has a comprehensive dairy alternative range that is cheaper than imported international brands.

How big is this market
This is a premium product that sells at a significant premium to cows’ milk. In South Africa, it used to be sold predominantly in specialty health and wellness stores but we are seeing more and more plant-based milks such as oat milk sold in mainstream stores. I think it is still a niche market locally, however, we have seen in recent years people being influenced on social media by “celebrities” they follow overseas so all these foreign concepts (good and bad) have influenced the locals’ minds.

In the UK the market is worth around R8 billion a year (400m pounds) and as much as 1 in 3 people drink it which means it has gone mainstream with oat-based being the milk of choice. While we have seen UK trends happen in SA I doubt the same will happen here where most people can’t even afford cow’s milk.

There is not a lot of data on the local market, Milk SA the local milk promotion body reckons local trends are following the US and that globally milk consumption has declined for decades whereas consumption of non-dairy alternatives has increased.
Some of the reasons for this include maintaining a balanced diet and healthy lifestyle, lactose-free alternatives. One of the main goals of plant-based milk diets was to consume fewer animal products, publicity and beliefs about bad animal treatment and perceived lesser effect on the environment than cows milk.

Now the milk body recommends that local (cows milk) producers should develop lactose-free versions.  It is still made from cow’s milk, but it’s been treated with the lactase enzyme, so there’s no remaining lactose. However this has happened and I don’t think it is that popular, I think people if they have the resources will go for plant-based over lactose-free cow’s milk because their motivations are mainly ethical rather than medical (digestive issues).

I have also seen large quantities of lactose-free cow’s milk end up in the surplus and salvage stream, not expired, not damaged, and selling at a significant discount to retail. This is one of the metrics I monitor to determine how well a product is doing. When pallets of fresh undamaged products are being dumped in the surplus market, it usually points to some kind of miscalculation in the market, it’s either a matter of not selling well, canceled orders, or lack of demand / overproducing (overestimating demand).