Milk Alternatives: for those who think I'm crazy
Oct 18, 2013;
Remember back in the day when milk used to come in just a few varieties; there was 2%, 1%, skim, etc., and maybe some lactose-free or goat milk if you were shopping somewhere fancy.
Above is a shot of the milk alternatives aisle at Whole Foods. In addition to the above varieties, Whole Foods also stocks an entire section of milk alternatives. In this section is where you will find, ahem:
- Soy Milk
- Almond Milk
- Coconut Milk
- Almond/Coconut Blend Milk
- Rice Milk
- Flax Milk
- Hemp Milk
- Quinoa Milk
Plus a chocolate variety for most of these. The sheer fact that these are still on the shelf at Whole Foods is proof that each of these milk alternatives are worth their width in profit. They are selling at a respectable pace and they are making Whole Foods money. If a milk alternative can sell for $1.50 a cup (Hemp Milk) or 4x - 8x the price of 2%, then a premium rice alternative should not seem that crazy. If you're not convinced yet, please read on. We are going to take a look back in time to the year 1996 when the first milk alternatives were on the market and the brand who would take them mainstream (Silk Soy Milk) was about to hit the shelves.
Note: The below is taken directly, with only slight paraphrasing and interpretation, from Barry Silverstein's article in the December 31, 2007 issue of branchannel, titled: Silk Soymilk - smoooth
In 1993, soy milk was sold primarily in health food stores, in weird, rectangular aseptic packaging so that the milk could be kept indefinitely on the shelf. Soy milk was a fringe product. It didn’t need refrigeration, and so it wasn’t placed anywhere near the cow milk in the dairy case—the industry didn't even consider it a competitor.
In 1996 a small company, White Wave, came along with the goal of changing the rules. Their idea was to produce refrigerated soy milk and compete head-to-head with cow milk. Most thought they were crazy.
How White Wave did it was brilliant. They created a dry soy mixture and shipped it off to the same dairies that processed cow milk. The dairies added water, packaged the product in Silk’s handsome containers, shaped like traditional milk cartons, and distributed it for them. The dairies used downtime in their processing plants to make the soy milk and generate a little extra revenue.
The technique separated Silk from other soy milks. White Wave decided to be conservative, however, and first market Silk through natural food stores, where they believed the product would find a more “natural” customer base. But White Wave was emboldened when, in October 1999, the FDA announced that soy was considered a heart-healthy food that could lower bad cholesterol. At this time, White Wave lobbied traditional grocers to place Silk in the dairy case, next to the cow milk. The company guaranteed to remove the product if it did not sell. It sold like gangbusters.
Silk first created and then dominated the refrigerated soy milk category. The brand went from zero market share in 1996 to 85 percent market share in 2003. As you might expect, Silk’s success did not go unnoticed. In 2001, Dean Foods Co. acquired White Wave for $154 million.