Rise of Oat Milk May Lift Demand

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Rise of Oat Milk May Lift Demand

Oat milk is all the rage these days, but will that mean anything at the farmgate?

That depends how far the fad goes and how big the trend becomes, said food industry expert Sylvain Charlebois of Dalhousie University.

“Things shift very slowly, but they do shift,” said Charlebois.

“If there is any market shift, farmers will have to look at it as a gain (but) don’t expect to see that category explode in the next two years.”

Oat milk, in the form of brands like Oatly, is getting a lot of attention and shelf space at grocery stores these days. The bigger trend of consumers demanding more plant-based proteins feeds well into the oat milk story.

It also fits nicely with the growing proportion of Canadians who come from backgrounds in which lactose intolerance is widespread.

And it fits into a trend of consumers reducing soybean consumption and looking for non-soy, non-dairy products.

“It’s seen as a healthy alternative,” said Charlebois.

The alternative-protein, non-dairy milk substitute market has long been dominated by soy products, but some people have or develop allergies to soy. That has created space for other non-milk dairy substitutes, such as almond products, but oat products have not played a big role until recently.

The market impact on oats is hard to see so far. The amount consumed today doesn’t require huge tonnages of oats, so the trend will have to grow for a while before farmers see an impact on price.

One analysis firm predicts that demand for oat-based drinks will grow by more than eight percent for most of the next decade.

Oats have always been associated with “healthy” attributes, as the basis of oatmeal and high quality horse feed, as the first food product to be allowed to carry a U.S. health claim, as a “low-carb” grain, and as an unprocessed “whole food.”

But its market power has not always reflected that saintly reputation as consumer trends away from breakfast cereals have been a drag on products like Quaker oatmeal and Cheerios.

And the horse feed market, once so reliable and willing to pay virtually anything for top-quality oats for racehorses, has evolved to be able to mix in cheaper grains like corn into oat-based feed.

Charlebois said market demand might grow slower than farmers want and fail to make a noticeable impact as demand grows, but once consumer demand is established, it tends to remain for a long time.

As oat milk gets integrated into coffee shops, grocery stores and health foods, the product should help overall oat demand become more stable.

“It’s getting on a lot of people’s radar,” said Charlebois.

“It’s getting some momentum.”