The Big Boom of Alt-Milk

Our daughter, who goes to grad school out East, had spent a wonderful sojourn at our home in Chicago, leaving behind the remainders of all the healthy-ish food she’d bought to get through the week at a house where dinner is often prosciutto and wine. Poking through the fridge after she left, I found almond butter, kale, fat-free Greek yogurt, and an open quart carton of oat milk.

We made it through everything but the oat milk. I smelled and tasted it periodically, and it never seemed to go bad, a quality I found both reassuring and slightly creepy. I didn’t know what to do with it, as I usually drink coffee black, rarely eat cereal, and let professionals make my smoothies. After three weeks, I guiltily upended it into the sink. 

But then, while working on this article in a coffee shop, I ordered an oat milk cappuccino and had my Green Eggs and Ham moment. Not only would I drink it in a boat with a goat, but I kind of liked it better than the dairy version. Soon, I tried pouring some into a blender with greens and fruit, and saved myself $10 on the morning smoothie. 

I’m pretty late to the party. Remember the great oat milk shortage of 2018? Back then, the exclamation-marked name of a Swedish company—Oatly!—was on everyone’s lips. The market for this creamy concoction had grown more than 300 percent from 2019 to 2020, zooming past soy milk and second only to almond as the country’s favorite plant-based dairy alternative. Coffee shops went into bidding wars to obtain cases of this liquid gold (more of a beige, really) and replaced the pithy aphorisms on their sidewalk sandwich boards with three simple words: “We have Oatly!” 

“The worldwide market for plant-based milks is expected to balloon to more than $50 billion by 2028, from its current size of about $20 billion.”

The worldwide market for plant-based milks is expected to balloon to more than $50 billion by 2028, from its current size of about $20 billion. According to the Plant Based Foods Association, these products now account for about 15 percent of the total milk market. When Oatly! made its initial public offering in 2021, it raised $1.4 billion, and this one company alone was given a valuation of $10 billion.

Many new producers are getting into the alt-milk market—not just with oats and almonds but also cashews, hazelnuts, coconuts, and many other species that have never nursed their young. A number of lifestyle trends appear to be driving this astonishing growth. Health and environmental concerns are pushing more people to adopt diets that reduce or eliminate animal products. Americans don’t eat breakfast cereals as they once did. Reports on the adverse health effects of growth hormones used in dairy cattle further tarnished milk’s wholesome image.

There’s also been an uptick in lactose intolerance across the globe. Some studies suggest that more than 65 percent of the human population, primarily in Asia and Africa, cannot properly digest dairy because their bodies don’t produce enough of the enzyme lactase. Now add in the global ubiquity of specialty coffee culture: Today, you can pretty much parachute into any country in the world and find an artful latte just as easily as a pizza.

“Coming from Asia, I grew up with a heritage of drinking soy milk,” says Jenny Eu, the Taiwanese American founder of Three Trees, a San Francisco–based producer of premium milks made from nuts and seeds. “But in the U.S., there was nothing ‘clean’ in the marketplace—all of them had gums and additives. Like a lot of Chinese people, I had a home soy milk maker.”

In the aughts, soy was the preferred nondairy milk, so much so that drinking it was considered something of a California health-food cliché. But it was also a magnet for bad press, perhaps at the instigation of the dairy industry. Soy milk can be more caloric and less vitamin-rich than cow’s milk; it also contains isoflavones, a type of plant estrogen. In 2009, the actor Jeremy Piven, famous for his role in the HBO comedy Entourage, claimed that his supposed 12-glass-a-day soy milk habit caused him to develop gynaecomastia, aka “man boobs.” Though he later walked back the comments as a joke, the damage to soy milk’s reputation was done.

Enter almond milk. In 2011, sales of almond milk nearly doubled, and it comfortably established itself as the leading dairy alternative. (It currently has a nearly two-thirds share of the alt-milk market.) In 2017, the preeminent East Coast milk producer Elmhurst Dairy rebranded itself as Elmhurst Milked and went into the almond (and other nut) milking business, ditching dairy forever. “People were drinking almond milk at home. They started to look for that same experience in a coffee shop, but the beverages that aren’t made for coffee can curdle, and can’t handle latte art,” explains Debra Kaminski, the director of foodservice marketing for Pacific Foods.

Though many consumers know the Portland-based natural foods company Pacific Foods for its line of organic soups and broths, it began as a co-packer making tofu and soy milk back in 1987, and is considered one of the pioneers of plant-based milks in America. Though Kaminski was initially hired for her marketing expertise to work on soups in 2011, she began receiving enthusiastic queries from customers asking for an almond version of the company’s Barista Series Soy milk that would perform as well in coffee.

“I had these mystery bottles of product samples and would go into coffee shops all over Portland and ask the baristas what they thought of our products,” Kaminski says. She brought baristas’ input back to Pacific’s product developers, who found that tweaks to the production process and some added stabilizers would keep the beverages from separating in coffee.

Similarly, though oat milk had been nationally available in the U.S. as early as the mid-’90s from makers like Pacific Foods, it was still a niche product, unlike in Europe where it was proving popular with coffee drinkers. That changed quickly. In 2016, Oatly crossed the pond for its American debut, making their initial appeal to baristas and becoming a favorite in coffee shops before hitting retail shelves. Oatly took the food engineering a step further, adding rapeseed (canola) oil to the product to ensure a luscious, full head of foam and a creamy mouthfeel. 

In doing so, they also helped define a counter market for premium plant-based milks free of all food science tricks. “I look at some of these milks and think, ‘Is this anything you’d find in your kitchen pantry?’ ” says Eu of Three Trees. “They add vegetable oil, essentially cooking oil, which is”—she pauses, searching for the right word—“gross.” 

“I look at some of these milks and think, ‘Is this anything you’d find in your kitchen pantry?’ ”—Jenny Eu, Three Trees

Eu, who earned her MBA from Stanford and previously worked for Wallaby yogurt, says she has “always had a passion for good food.” She began playing around with nut milks, first making them with her soy milk machine, and in 2013 she began selling them locally in the Bay Area. Her goal was to make a product as natural and nourishing as possible, which also means high in fat. “Fat is good in the plant-based world,” she says. “It can be heart healthy.” Her almond milk contains precisely two ingredients—almonds and filtered water—and has 9 grams of fat per serving, higher than whole dairy milk.

Three Trees also makes a pistachio milk and a blended oat milk with flax, pumpkin, and sunflower seeds to increase its good fats and protein. Rounding out the line is an almond milk with black sesame and dates that is the sludgy, gray smoothie you never knew you needed in your life. What you won’t find are any “natural flavors,” which Eu says “are derived from something. We have this high ingredient standard, and we encourage our consumers to read the labels.” 

Eu describes her consumers as a “psycho-graphic” who share her interest in wellness and a mostly plant-based diet. So they don’t mind that the milks separate and must be shaken into creaminess, and that they will curdle if poured into coffee. “I don’t think the Oatly consumer is reading the ingredient list,” she notes, adding, “but it tastes great and mixes in coffee really well.”

Many new companies are now trying to find ways to carve out a little bit of that Oatly market. Michelle R. Johnson, an award-winning barista and coffee expert, is one of four founders of Ghost Town Oats, the first Black-owned and barista-owned oat milk company in the U.S. The company is still raising funding and counting on a summer or fall launch later this year. “We need some added layers, like cultural backgrounds, when we talk about coffee shops,” Johnson says. “We have to get past that image of the guy with the handlebar mustache and plaid shirt being pretentious.” 

Johnson was convinced to join this startup after her own lived experience in the coffee sphere led her to do some deep research into Black consumers and plant-based diets. “Black people are two-thirds more apt to go vegan than anyone else,” she says. “So how do you tap into that market?”

The team realized they needed to combat the smug air of elitism and wealth surrounding the topic of wellness. “We want to meet people where they are, meet the people who have been abandoned in these ghost towns, and bring them oat milk,” she says. “You don’t have to go full vegan if you don’t want to, but at least we’re providing some healthy alternatives to dairy.” 

Like most oat milks served in coffee shops, Ghost Town Oats will be packaged in aseptic shelf-stable cartons so it can be stocked in a storeroom. This is one topic that deeply divides consumers. Indeed, on the very high end of the market, producers who decry the use of plastics and petrochemicals offer their plant milks as a canvas for highlighting all kinds of ingredients purported to benefit health and wellness. 

aMYLK starts with a base of organic almonds or hazelnuts, and may then include such add-ins as catuaba bark, blue butterfly pea powder, and crushed freshwater pearls. Owner Amy Colville and her small staff make all the milks by hand in a small hydraulic press and sell them around Portland, Oregon, for $19 a liter. “I know it sounds a little woo-woo, but all our intention and energy go into it,” Colville says. “We come to the door with an elevated energy.”

Colville, a former Division 1 athlete, had a stress-induced health crisis that doctors could only call an “autoimmune mystery illness.” Her body broke out in a rash, her eyelashes fell out, and for the first time in her life she began to develop digestive issues. She found that cutting lactose, among other things, from her diet had a big effect. But also, on a more psychological level, she says the intentionality with which she switched to foods that are good for the body and good for the environment made a difference in her overall health. While her core line consists of straightforward offerings like plain, vanilla, or matcha nut milks, she also makes specialty concoctions, such as “I’m Cosmic,” designed to help when Mercury is in retrograde. 

Colville owns her beliefs, and she’s not afraid to put it all out there. Posing nude with a bottle of aMYLK on Instagram in 2019, she wrote, “I’m picking a fight on your behalf. I am here to tell you that with little exception the other plant-milks that you are buying are mostly water. They are then packaged in cartons that will never decompose, are not recyclable (without the use of tons of water & chemicals to delayer them) or they’re packaged in plastics that leach chemicals into their products & into your body. They then add ingredients to thicken their plant water, like industrial oil … What is in your milk? What is in your food? What is in the products that you put on your body?” 

In the photo she tagged a number of the largest plant-milk companies. In the comments, Ted Robb, CEO of New Barn Organics, defended his company with an admission: “As a brand trying to reach a broader audience, we work hard to balance integrity and honesty in our practices with the demands of the retail marketplace.”

That marketplace will only get bigger, more segmented, and more ubiquitous. If you haven’t checked out your local Whole Foods lately, you might be surprised to find dozens of plant-based milks vying for your coffee, your smoothie, your gut biome, and your loyalty. 

And did you hear about the next big thing? It’s potato milk—and apparently, it’s quite good.