Soymilks struggle under pressure

November 12, 2010

Dairy alternatives, kefir drinks and dairy-based drinks reported a mixed bag of results this year. The kefir and milk substitutes category benefited from new alternative dairy options, while flagship soymilk brands all reported declines.

Kefir and milk substitutes grew 7.7 percent to $536.9 million in food, drug, convenience, gas and mass merchandise outlets, excluding Wal-Mart for the year ending Sept. 5, SymphonyIRI, Chicago, reports. However, category leader Silk Soymilk, from WhiteWave Foods, Broomfield, Colo., reported a 12.7 percent decline in sales and a 9.7 percent drop in its 41.7 percent market share of the category in the measured channels during the time period. While Silk Light Soymilk remained basically flat, Silk Plus Soymilk’s sales sunk 32.1 percent. 8th Continent Soymilk also recorded a decline of 8.6 percent during the time period.

The only Top 10 soymilk to report an increase was private label soymilk, which grew 9.7 percent in measured channels for the year ending Sept. 5, SymphonyIRI says.

Slumping soymilk sales are not surprising for the time period. Retail sales of soy-based beverage and food products declined in 2009 to $4.5 billion for the first time in a decade, according to “Soyfoods: The U.S. Market 2010,” a report released by SPINS, Schaumburg, Ill., and Soyatech LLC, Southwest Harbor, Maine. A 6.5 percent decline of soymilk sales, the leading soyfoods category, significantly affected sales losses, while other leading categories such as meat alternatives, energy bars and meal replacements maintained positive sales growth, the research groups said.

The report points out that the U.S. market for soyfoods felt the effects of the overall economic downturn in 2009.

Euromonitor International, London, also saw a decline of 3.8 percent in retail volume in U.S. soymilk sales in 2009, but it is reporting an expected increase of 9.5 percent in retail volume for 2010. The main reason for the increase this year is the improvement in economic prospects, says Francisco Redruello, a senior packaged foods analysts for Euromonitor.

“Soymilk is expensive,” he says. “Milk grew by 1 percent from 2008 to 2009 while soy was declining, so milk was a more affordable price.”

Milk sales also could have benefited from some negative media reports on soy, Redruello says. While soy has become known for its heart health benefits, opposing viewpoints on some of the health benefits of soy emerged. Whether substantiated or not, the conflicting reports received the attention of media outlets and it had an impact on the perception of soymilk with consumers, he says.

New alternatives

Soymilk’s decline has opened the door for new dairy alternatives for consumers who are looking for healthy options and willing to pay a premium for them, Euromonitor’s Redruello says.

Last year, Blue Diamond Growers, Sacramento, Calif., launched Almond Breeze, which grew 606.3 percent in measured channels for the 52 weeks ending Sept. 5, SymphonyIRI reports. Blue Diamond Almond Breeze grew to the No. 4 spot in the kefir and dairy substitutes category, rolling out nationwide at the end of 2009 after a limited release in the Southeast and West Coast. It now holds 7.5 percent market share. Almond Breeze is all natural and available in Original, Vanilla and Unsweetened Vanilla varieties, and each of the varieties is fortified with calcium and vitamins A, D and E.

This year, WhiteWave Foods launched Silk Pure Almond, and in its short time in the market has gained 5.1 percent market share, SymphonyIRI reports. The company also added Silk Pure Almond Vanilla.

In August, Whole Foods Market, Austin, Texas, expanded its all organic and domestically sourced non-dairy beverage line with the launch of the company’s first almond milk line – including what the company says is the industry’s first private label refrigerated organic almond milk – and light soymilk in Original and Vanilla varieties under its value-priced 365 Organic Everyday Value brand. The company continues to offer its 365 Organic Everyday Value Soy and Rice Milk with new graphics to streamline the package design across the category.

Pacific Natural Foods, Tualatin, Ore., expanded its dairy alternative lineup with the release of three varieties of hemp beverages this year. Unsweetened Original, Unsweetened Vanilla and Chocolate Hemp are a natural source of omega 3 and omega 6 fatty acids, calcium, protein, vitamins and amino acids, the company says. Pacific Natural Foods also offers almond, hazelnut, oat and rice beverages in different flavors and sizes.

Globally, dairy alternative drink product launches experienced a surge in 2008 with a 43 percent increase in launches from 2007, according to Innova Market Insights’ Database. Product launches for 2009 were slightly above those recorded for 2008 (7 percent increase), and 2010 product launch data up to and including September indicates that numbers similar to 2009 will be recorded, the Duiven, The Netherlands-based research group says.

A similar scenario exists for U.S. launches, with a 42 percent increase in product launches in 2008 compared to 2007, and product launch numbers for 2009 and projected number for 2010 have not increased significantly since the initial surge in 2008, Innova says.

Collectively dairy alternatives, such as soy, goat, rice, almond, hemp, oat and quinoa beverages, made up 20 percent of global dairy and dairy alternative drink launches tracked by the Innova Database in 2007 and 23 percent in 2008 and 2009. For the domestic market, new dairy alternatives reached 17 percent of the new dairy and dairy alternative drink launches in 2007, 37 percent in 2008 and 36 percent in 2009, Innova says.

Individually, most dairy alternatives reported increases in product launch activity. Globally, soymilk reported a 10 percent increase in product launches in 2009 from 2008, and in the U.S. market recorded a 6 percent increase in launches during the time period, Innova says. Goat milk reported an 11 percent decrease globally in new products in 2009 from 2008 after a big surge in 2008, while it saw an 82 percent decrease in U.S. launches during the time period. While rice milk launches increased 1 percent globally in 2009 from the prior year, in the United States rice milk launches plunged 39 percent in 2009 from the year before after a surge in 2008, Innova says. While almond milk launches increased 13 percent globally in 2009 vs. 2008, the U.S. market recorded an 83 percent decrease in new products during the time period, Innova says.

Hemp, oat and quinoa beverages are emerging dairy alternatives with minimal product launch activity to date, Innova says. Globally, hemp milk reported a 125 percent increase in product launches in 2009 from 2008, and in the domestic market it saw double that percentage increase in releases during the time period. New oat milk launches grew 24 percent globally in 2009 from 2008, while the U.S. market saw no change in the number of new oat milk releases. Quinoa, which is a grain growing in popularity due to its purported health benefits, reported a 700 percent increase globally in new product launches in 2009 from 2008. In the United States, only two new quinoa beverages launched in 2009.

Dairy-based options

For kefir drinks, global product launches tracked an 8 percent increase by the Innova Database in 2009 from 2008 and a 12 percent decrease in the United States from a small base.

While kefir beverages represent a small part of the U.S. beverage market compared to countries in Europe, the segment is growing. Known for its probiotic kefir products, Lifeway Foods, Morton Grove, Ill., saw sales of its Lifeway Kefir grow 17.2 percent in measured channels for the year ending Sept. 5, according to SymphonyIRI.

This year, Lifeway Foods expanded its line of ProBugs Organic Whole Milk Kefirs for kids with Strawnana Split. The Strawberry-Banana flavored smoothie is high in protein and calcium and contains 10 live and active probiotic cultures, the company says. Lifeway also debuted a line of Organic Green Kefirs with Phytoboost, the company’s exclusive blend of phytonutrients. Available in Kiwi Passion Fruit and Pomegranate Acai Blueberry, the cultured-milk smoothies contain 10 live and active probiotic cultures as well as extracts from 10 green vegetables and green tea. Lifeway also introduced Chocolate Truffle Lowfat Kefir and Greek Style Original Kefir and Strawberry Kefir. The company also offers new Helios Goat Milk Kefir in Blueberry, Vanilla and Plain varieties.

For kefir in a smaller format, Lifeway launched a new line of 3.5-ounce BioKefir shots specifically designed to support immunity, heart health and digestion. Lifeway BioKefir shots contain enhanced kefir and are sold in five flavors: Pomegranate-Blueberry, Kiwi-Passion Fruit, Blackberry, Black Cherry and Vanilla. All BioKefir shots contain Lifeway’s ProBoost blend of 12 probiotic cultures with more than 20 billion units of live and active probiotic activity in every 3.5-ounce shot, the company says.

This summer, Odwalla, a subsidiary of The Coca-Cola Co., added Strawberry Protein Monster to its line of protein-fortified smoothies. Strawberry Protein Monster combines organic soymilk and 25 grams of milk protein with strawberries as well as vitamins B6 and B12, calcium and zinc. The variety joins Vanilla and Chocolate Protein Monster flavors. Odwalla Protein Monster drinks grew 87.1 percent in measured channels for the 52 weeks ending Sept. 5, SymphonyIRI reports.

Coca-Cola also announced plans to expand its Powerade brand in 2011 with the launch of Powerade Protein Milk. Made with low-fat milk, the beverage is 99.4 percent lactose-free and fortified with 22 grams of protein, 35 to 37 grams of carbohydrates, 18 vitamins and minerals and nine amino acids. Powerade Protein Milk aims to support rapid recovery, the company says. The beverage will be available in Chocolate, Vanilla and Strawberry varieties, and will be packaged in 14-ounce black bottles.

Shamrock Farms, Phoenix, also released Rockin’ Refuel, a protein-fortified, low-fat milk that helps rebuild muscles after exercise, the company says. Available in Chocolate, Strawberry and Vanilla flavors, Rockin’ Refuel offers 20 grams of protein, naturally occurring electrolytes and calcium in a 12-ounce bottle.

Nestlé Nesquik also is hoping to energize its sales with the launch of Nestlé Nesquik Banana Strawberry. Made with low-fat milk, Banana Strawberry is fortified with calcium and vitamins A and D and contains 8 grams of protein per serving. BI