In recent times, the onset of allergies and dairy intolerances along with the paradigm shift toward plant-based diets has amplified the importance of several dairy-free alternatives to cow milk that are rich in vitamins and minerals. As per NIH (National Institutes of Health), experts have estimated that about 68% of the worldwide population has lactose malabsorption. To that end, the growth of the oat milk market is expected to remain positive in the near future. 

The rapidly expanding vegan population has made way for the rising consumption of soy-free milk options, further surging the preference for oat milk considering its high carbohydrate content as well as froth-generating characteristics. Lately, the increasing scope for enhancing nutritional benefits has steered the higher consumption of plant-based beverages. 

Several leading oat milk manufacturers are placing targeted efforts on investment-oriented strategies for ramping up their production capacities. In November 2021, Danone invested $49 million to convert one of its French dairy production units, the Villecomtal-Sur-Arros facility, into an oat milk factory emphasizing manufacturing products under its Alpro brand. This move marked the firm’s continued growth in catering to the demand for dairy-free products.

The expansion of the oat milk industry is also supported by the growing consumption of unsweetened milk products and the amplified focus on bringing newer formulations in dairy-free and plant-based products. To illustrate, in September 2022, Elmhurst 1925 reformulated its unsweetened oat milk offering for the benefits of fiber, calcium, whole grain, potassium and healthy fat for its consumers. The launch of this creamier milk is in line with the company’s mission to keep innovating as well as improving its product lines. 

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Powered by the rising consumer inclination towards animal cruelty-free ingredients, the oat milk market size will exceed USD 490 million by 2026, says Global Market Insights Inc.

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Flavored Oat Milk to Record Significant Consumer Preference Driven By a Rising Stream of Innovations

In addition to offering an impressive nutrient profile and delicious flavor, when it comes to texture and taste, oat milk is thin and has a naturally sweet flavor, similar to almond and skimmed milk. However, vanilla, cinnamon, dates and other natural sweeteners have begun to be added lately for flavor enhancement. Moreover, the rapidly expanding millennial population and its rising obsession with new dairy flavors has opened new avenues for several flavor innovations. 

In effect, many F&B manufacturers are seeking various measures to introduce new products to cater to the increasing demand for flavored oat beverages, subsequently assisting the growth of the oat milk industry. For example, in January 2020, Nestlé’s Nesquik launched its new vegan plant-based oat milk. The new product comprises a blend of pea protein and oat milk and specifically matches the nutritional profile of mammary fluid milk.

Meanwhile, in July 2021, a new plant-based entity, Happi Oat Drinks, launched two flavors, strawberry and chocolate, as an addition to its flavored oat drinks. Both new flavors are enriched with vitamins B6, B9, B12, A, C and D, and are free from gluten. The increasing popularity of ready-to-drink flavored beverages and the paradigm shift toward plant-based dairy alternatives has contributed to easy access to oat milk in Walmart and other retail stores.

What Does The Future Hold For the Oat Milk Market?

The consumption of oat milk is expected to have a consistent rise in the coming years, powered by the increasing instances of R&D activities led by key industry players for unlocking the potential of the product in multiple applications. For instance, in May 2022, PepsiCo worked alongside academia and other partners for developing an understanding of oat genomes to cater to open-source applications in the fields of health and sustainability.

In light of the rising number of lactose-intolerant individuals, the demand for oats has gained immense momentum since it is dairy-free and helps in cutting back the amount of animal product consumption. In fact, plant-based milk, especially oat milk, has been associated with positive impacts on cardiovascular health. It is also expected to register a higher preference over other plant-based milk varieties, such as soy milk, given its higher carbohydrate content.

Of late, several leading participants in the oat milk business are incorporating other ingredients, including emulsifiers, salt, gums, oils and sugar for stabilizing the milk and retaining its taste.  Besides nutrition, each brand of oat milk offers varied nutrient profiles such as being sweetened, fortified, unsweetened or flavored.  

The demand for oat milk is also projected to witness a prolific rise with the increasing innovations in packaging, including the addition of illustrations as well as scanners on cartons to direct users to websites for oat milk recipes for more customer engagement. In May 2021, Blue Farm introduced waterless oat milk to cut its packaging by 90%. The rising preference for recyclable glass bottles will also play an ideal role in assisting market development.