The dairy alternatives category is growing aggressively in many areas of the world. Latin America, however, lags behind. In this region with a relatively high level of lactose intolerance among the population, growth opportunities await dairy alternatives – plant based milks, spoonable non-dairy yogurts, non-dairy ice cream and frozen yogurt, and non-dairy cheese – that successfully marry and market two key purchase drivers, flavor and health.
The level of NPD in dairy alternative drinks in Latin America has been steadily increasing since 2013. Consumers name health as an important feature, with 43 percent of Mexican consumers surveyed saying they do/would buy dairy alternative drinks because they are healthy, and 29 percent considering health aspects an important factor when making a purchase. Clean label features associated with health (natural, organic, no artificial ingredients, GMO free) are most influential, followed by protein content. Product development also appeal to consumers following plant based and other trending diets.
Eating for Me, an Innova Market Insights Top Ten Trend for 2019, highlights opportunities for consumers to align their food choices, including selection of dairy alternatives, with their personal dietary needs and desires:
- Allergies and free from – Gluten free is becoming more prevalent, lactose free is a natural association, and dairy and soy free address allergies.
- Vegan – Companies increasingly add claims such as vegan where they might have made lactose free claims in the past. More consumers are buying dairy alternatives because they are following a vegan/plant based diet, rather than because they are lactose intolerant. Dairy alternatives launched in Latin America with a vegan claim reached 27 percent of the total in 2018, up from seven percent in 2013.
- Protein – Protein consumption continues to be a key dietary trend and dairy alternatives tend to be naturally low in protein. In 2018, 28 percent of dairy alternatives launched in Latin America had a high/source of protein claim.
- Sugar-related – Consumers are becoming more aware of the need to consume less sugar; companies are responding with low/no/reduced sugar options. In 2013, 20 percent of products made a low/no/reduced sugar claim, increasing to 31 percent in 2018.
- Fortified – Many dairy alternatives lack the vitamins and minerals of dairy milk, so companies fortify their products to make them comparable. In 2018, 28 percent of dairy alternatives launched in the region were fortified, up by 131 percent since 2013.
- Clean – No additives/preservatives claims jumped over 100 percent from 2013 to 2018.
The category is dominated by multinationals which have acquired local companies operating in the region in order to enter the market quickly with established brands.
Nestlé, which acquired Ecuadorian company Terrafertil, produces Nature’s Heart milks fortified with various vitamins.
Nesfit (Nestlé) Whole Rice and Almond Drink (Brazil) is fortified with fiber, a nutrient not naturally found in dairy products.
US based startups are attracted to health-related growth opportunities in Latin America.
Good Karma Foods highlights the plant protein and omega-3 fatty acids content in its Good Karma Flaxmilk Plus Protein (Mexico). The product is also soy free, dairy free, gluten free, and nut free, for consumers seeking allergy benefits. Pea protein is a popular ingredient for boosting protein content and enables companies to make soy free and dairy free claims. Ripple Nutritious Pea Milk (Mexico) positions itself as a vegan source of protein and omega-3 fatty acids, in addition to high calcium, low sugar, gluten free, soy free, and nut free. Lala Vita Almond Drink With Protein (Mexico) includes vegetable protein, has no added sugar, is low cholesterol, and is also fortified to support several health claims: calcium and vitamin D for strong bones and teeth, vitamin A for skin and eye health, and vitamin B complex for harnessing the energy from food.
Smaller regional companies are diversifying dairy alternative drinks into a wider range of non-soy based products (only 39 percent of dairy alternative drinks launched in 2018 were soy based) that include nut milks, as well as cereal, grain, and seed milks. Dairy alternative drinks made with ancient grains are more widely available in Latin America than in other regions. Share of product launches with quinoa, for example, doubled from 2013 to 2018. Pure Natural Concepts Quinoa Drink With Mango Flavor (Uruguay) includes claims for reduced sugar, vitamin/mineral fortification, soy free, dairy free, gluten free, no artificial colors, flavors or preservatives. Gramolino Amati Natural Amaranth Drink With Passion Fruit And Goldenberry (Ecuador) describes amaranth as “king of superfoods.”
Health positioning is a natural fit with dairy alternatives and offers tremendous growth potential in Latin America.
Category Insider: Dairy Alternatives – Latin America is a report from Innova Market Insights, which brings together consumer research, market sizes, company analysis and a review of new product trends and activity to demonstrate just how the picture has been changing and to suggest where the future opportunities can be found.