US Plant-Based Milk Market Shrinks, Challenging Growth Narrative

The U.S. dairy alternative and plant milk market has shrunk in volume for three consecutive years through 2024, with more losses expected. The market's shrinkage challenges the common narrative of continuous plant-based growth. For the 52 weeks ending April 19, dollar sales for the overall plant-based milk category totaled $2.3 billion, a 2.1% decrease, according to Beverage Industry. The retail contraction creates a clear tension: cow's milk consumption has declined for decades, and plant-based options are often seen as a growth engine. Yet, the overall U.S. plant-based milk retail market is currently shrinking in volume. Weekly average purchases of cow's milk, for example, fell 12% from 0.41 gallon per household per week in 2013 to 0.36 gallon in 2017, according to ers. The long-term shift away from dairy should logically fuel plant-based sales, but the retail figures tell a different story. The plant-based milk industry faces a critical juncture. It needs to innovate and differentiate beyond simple health or environmental claims to reverse retail declines and capture sustained growth. Consumers aren't just swapping dairy for plant-based at home; they're adopting them selectively, especially in foodservice. The situation points to a deeper challenge than mere availability.

The Long Arc of Dairy's Decline and Early Plant-Based Gains

The per-person U.S. supply of cow's milk fell 1.0% annually between 1995 and 2009, according to ers, creating a significant market void. Plant-based alternatives initially capitalized on this, with purchases of almond, soy, and other plant-based products increasing 36% from 0.028 gallon to 0.038 gallon per household per week between 2013 and 2017, according to ers. The early growth demonstrated market potential. In Europe, plant-based milk is the most purchased alternative, outpacing plant-based meat, according to ProVeg International. The robust performance abroad highlights a potential for growth that the U.S. retail market has yet to fully realize, despite the ongoing shift away from traditional dairy.

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