Plant-based dairy products have been gaining momentum in recent years, and the Plant Based Food Association recently reported that the category is now number one among the entire $7.4 billion plant-based food market, with plant-based milk registering $2.6 billion in sales on its own. 

But it’s not just milk finding its way into baskets. Plant-based cheese, yogurt, ice cream, butter and more are driving the alt-dairy category. And this is still an evolving category with more and better products hitting the market all the time, meaning supermarkets need to stay up on the latest and greatest items. 

Laura Perkins, vice president of purchasing for Lakewood, Col.-based Natural Grocers, has observed steady growth in the category this past year and has a very positive outlook regarding dairy alternatives in the retail space.

“Part of this can be attributed to an increased consumer population seeking alternatives for environmental, animal welfare or nutritional intolerances,” she said. “Vegan and dairy-free options are an excellent source of protein without some of the common ‘undesirables.’”

At her stores, oat-based items are very strong performers right now, with sales of alt-based cheeses, sour creams, cream cheese and butter also continuing to increase. Conversely, soy-based items have been slowing. 

Kyle Kirkpatrick, director of center store for The Giant Company, the Carlisle, Pa.-based operator of Ahold Delhaize USA’s Giant/Martin’s supermarkets, noted that while the stores continue to see growth in plant-based dairy alternatives, it is not at the same pace that it has increased over the last couple of years.

“The pandemic impacted fresh and center store categories in various ways. For plant-based dairy alternatives in particular, the category experienced slower growth as innovation was put on hold to prioritize core assortment impacted by supply constraints,” he said. “We continue to see new milks. Oat milk has been a segment that is showing strong growth, but plant-based cheese is losing steam.”

Education matters

Vegans and vegetarians are generally the most interested in plant-based dairy products, but increasingly, more and more sales are attributed to customers who are just plain curious, or those looking for replacements out of necessity, like those who are lactose intolerant.

“Our crew is trained with the latest and greatest information on new products across all categories—including dairy-free alts,” Perkins said. “We keep all plant-based items merchandised together within the category so they can be easily found. We also believe in consumer transparency and education. We say “no” to GMO’s and can talk in detail with customers who want to know if it’s not dairy, then what is it, and answer with confidence.”

Shelf-talkers and in-store signage have both been very successful for Rastelli Market Fresh.

“On our dairy and cheese, we have plant-based signage on the doors and tags highlighting plant-based options,” Mentzer said. “We have also been very successful doing weekly demos in the front of the store focusing on plant-based products. This way we tend to have guests who normally would never consider trying them, actually tasting these alternative products upon entering the store. The power of sampling can’t be underestimated. It’s our number one marketing tool to get products into people’s carts.” 

Enough space for all

With new products being added to the category almost monthly, supermarkets need to make tough decisions on what gets the shelf space available.

With 163 stores in 21 states, Natural Grocers’ team members work closely together to communicate the latest trends and share what sells well, so stores can make decisions on what plant-based dairy products to carry in a more educated way. 

“It’s more than just shelf space or supply and demand,” Perkins said. “It’s about really listening to our customers, crew and our suppliers to find that perfect sweet spot. We listen to our customers, we do the research, and we find suppliers that can deliver the qualities that meet our standards and gain the approval of our customers. Then we find the perfect placement within each store.”

Natural Grocers stores have a dedicated set for non-dairy beverages in the refrigerated areas and dedicate the space appropriate to sales for the other areas like yogurt, spreads, cheeses, etc.

Chris Mentzer, director of operations for Rastelli Market Fresh, with locations in Marlton and Deptford, N.J., noted that plant-based dairy has been a staple at the stores since they opened eight years ago.

“We have seen steady growth and have added additional SKUs as warranted,” he said. “The pandemic actually helped with this category. With wide supply chain shortages on regular mainstream products, it forced some customers to turn to alternative options. While it doesn’t always have broad appeal, plant-based products in general benefited in this scenario because they were readily available, and consumers were able to fill the void.”

The Giant Company finds that there are three different types of consumers for alt-based dairy products—the vegan, the lactose intolerant, and the flexitarian. 

“We do not market to them individually; instead, we try to reach all of them via our circular, digital pages, loyalty programs, and email,” Kirkpatrick said. “Space is determined based on potential sales and the need for pack out. We need to continue make sure that we communicate and separate. These items can get lost on shelf, so we need to highlight them with tags and signs.”

With plant-based foods outpacing total food sales this past year, don’t be surprised to find even more alt-dairy products hitting the market in the near future.  

Source : Supermarket news 05th Oct 2022 by Keith Loria