Why plant-based milks are on the rise

The Coffee Commune

Plant-based milks are on track to overtake cows’ milk in Australian cafés – but what is it about these non-dairy alternatives that’s driving demand?

We recently ran a poll on our Instagram asking followers about their preferred milk when ordering a coffee. One third of respondents said they prefer plant-based milk over dairy or lactose-free varieties. Oat milk led the plant-based pack with 63 per cent of the vote, followed by almond milk at 27 per cent.

This follows recent data from café analyst Sean Edwards, which showed that plant-based milk is tipped to be in half of all drinks in Australian cafés in the next few years, with oat milk the fastest growing dairy alternative.

So why the sudden move away from dairy?

With a shift towards a more conscious, sustainable way of living, as well as a rise in vegans and “flexitarians” in general, the market for plant-based products as a whole has grown.

“This is indicative of an evolving consumer base that’s getting more complex in its taste preferences,” says Raihaan Esat, General Manager of International Coffee Traders.

“And it’s not only with dairy alternatives, but with additional products like turmeric, beetroot, charcoal and even mushroom lattes.”

Yes, you read that right, mushroom lattes – a drinkable powder made from dried mushrooms that gets added to your regular coffee.

As well as a rise in the adoption of plant-based diets, lactose intolerance is on the rise in Australia, affecting roughly two in every three Australians.

Environmental concerns are also a big driver, with plant-based milks considered a much ‘greener’ alternative than cow’s milk – for the most part. It must be said that not all plant-based milks are good for the planet; some require vast amounts of water to harvest, and soybeans contribute to massive deforestation in countries like Brazil and Argentina.

Another factor to consider is the panic buying that took place during the first wave of lockdowns in 2020, with shoppers switching to plant-based milks that had a longer shelf life than their dairy counterparts.

Is plant-based milk really milk?

Plant-based milks are all made the same way – by grinding nuts, beans, grains or legumes, or coconut, into a pulp and combining it with water.

While they are non-dairy beverages, plant-based companies use the term “plant-based milk” because it’s easier for consumers to understand – something that dairy farmers aren’t particularly happy with.

“It’s falsifying a product to make it seem like a product which is popular,” WA Farmers dairy president Ian Noakes told the ABC. “You don’t win the market otherwise.”

And while the Australian Competition and Consumer Commission did crack down on the use of labels like “beef”, “pork” or “chicken” for alternative meats, there is currently no restriction on the use of dairy terms like “milk” and “creamy” when labeling plant-based milk products.

But it’s not all doom and gloom for dairy farmers. The Australian Bureau of Statistics reports that dairy milk consumption in Australia has remained relatively stable, even as Australians have bought more dairy substitutes, suggesting that while dairy has lost market share, it hasn’t lost ground in volume.

“Plant-based beverages receive a lot of attention, but milk from Australian dairy is still enjoyed by the majority of shoppers,” said Dairy Australia analyst Sofia Omstedt

What this means for cafés

For cafés, the rise in popularity of plant-based milks means more stock to hold – and a stronger, more robust workforce to deliver it.

Today, most cafés are expected to provide consumers with a wider variety of milks than they did five years ago, which is an added expense.

“The strain on a café to carry seven different dairy variations and syrups, powders and additives to satisfy the customer’s demands…it’s likely that cafés will start to look more like chemistry labs than coffee shops,” says Raihaan.

Raihaan says it’s not just about stock – it also affects workflow.

“Baristas have gone from just coffee and milk to creating a more artisanal product,” he says. “They are now required to be able to mix all kinds of cocktails with large amounts of variation.

Think back to five years ago, when the only choices of milk were full cream or skim. A café could produce lots of cups of coffee quite efficiently, because you could steam a big jug of full cream milk and be confident that you could quickly produce four or five coffees with that jug.

“Now you see the docket orders on the coffee machine and every single one is different.”

Raihaan says the amount of customisation options in the current environment demands a higher skill level to craft a product with more complexity.

“Each coffee order is a more specialised product and requires individual preparation,” he says. “They can’t be bulk-prepared like they used to be. At the same time, nobody wants to wait more than five minutes for a cup of coffee, so you have to keep the speed up, even though we’re dealing with an infinitely more complex product.”

For consumers, the sharp rise in plant-based milks is another reason why you might see the price of a cup of coffee increase – which comes back to understanding the ecosystem behind the coffee industry.

“With so many milks up for choice,” Raihaan says, “consumers need to be prepared to pay more for their morning brew.”

The Coffee Commune