(Animal-free) Cream in Your Coffee? Dairy Alternatives in the Coffee Space

June 2022

The overlap between coffee and dairy, especially in the critical coffee markets of Asia and North America, means that trends in plant-based dairy will play a key role in the future of coffee. Particularly important will be the emergence of animal-free cultivated dairy, which will represent an entirely new phase in the evolution of dairy alternatives and one in which the coffee industry will place a crucial role in winning mainstream acceptance.

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The Future Role of Dairy Alternatives in the Coffee Whitener Space

Dairy is closely linked to the future of the coffee industry and dairy alternatives increasingly are too

Dairy is intimately tied into the future of coffee. RTDs and instant mixes generally feature dairy ingredients, as do many pods and a rapidly growing amount of foodservice coffee. This means that coffee is absorbing trends from the wider dairy space, particularly a move towards dairy alternatives. These alternatives will become increasingly important in the coffee space as well.

Functionality is the key focus area for alternatives

The emergent flexitarian demographic cares about their health and the environment, but of the two it is health that it the priority for them. Because dairy alternatives often provide both this is therefore largely a question of emphasis. Positioning of successful dairy alternatives in the future will therefore require articulation of their health benefits to wellness-focused consumers.

Oat is the milk to watch for now but it will not be for long

No plant base has gained share so fast as oat in the past few years, yet already competitors are already seeking to displace it. The next wave of plant-based milks will likely be blends that de-emphasise any one ingredient and focus on mimicking the taste of animal dairy. It is animal-free dairy however that is the segment to truly keep an eye on given its massive disruptive potential.

The mix of dairy offerings in the future will be more complex and customised

No single dairy alternative will ever gain total control of the market. Animal-free dairy has potential to be the largest long term but it is unlikely to ever entirely replace animal dairy. Nor will it even fully displace the plant-based milks, each of which have their supporters for taste and health reasons. Instead, where supply chains allow, the future will be one of numerous dairy options and consumers customising their beverage as they see fit.

Introduction: The future role of dairy alternatives in the coffee whitener space
The fortunes of coffee and dairy are inexorably linked
Milky coffee is particularly important in East Asia and North America
Dairy alternatives are gaining share within the coffee space
The “health halo” comes before sustainability for consumers of dairy alternatives
Coffee companies, in contrast, tend to be led by sustainability concerns
Functional plant-based creamers have performed the best
Fortified products with additional functional benefits are becoming more important
Plant-based is on the rise, but what plant specifically?
Milks based on a single plant base will become less common in the future
Animal-free dairy will be the game changer in the alternative milk space
“Dairy Free” resonates more than “plant-based” among consumers
Coffee and the adoption curve: The case of oat milk and implications for animal-free

Hot Drinks

This is the aggregation of Coffee, Tea, and Other Hot Drinks.

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