Over the past few years, it’s been impossible to ignore the meteoric rise of oat milk in specialty coffee. In fact, oat milk is so popular that it’s now uncommon for a coffee shop not to stock it.
According to research from World Coffee Portal in 2021, 16% of UK consumers have tried oat milk in a coffee shop in the past 12 months – making it the most popular plant milk in the country. Moreover, UK sales of oat milk increased by over 100% between 2019 and 2020 to £146 million (US $177.8 million).
However, some five years ago, the vast majority of people weren’t even aware of oat milk – at that time, almond, coconut, and soy milk were the only plant-based options available.
So how did oat milk become so popular, and will it continue to be dominant? To find out, I spoke with three industry experts – read on to find out what they had to say.
You may also like our article on plant milks in the World Barista Championships.
When was oat milk first invented?
Plant milks have certainly become more popular in recent years – which is largely a result of consumers becoming more environmentally conscious, especially across younger generations.
However, some types of plant milk have been around for centuries. Soy milk, for example, can be traced back to 14th-century China, and was first commercially produced in the late 1910s across Europe, Asia, the US, and Australia.
Oat milk, meanwhile, is much newer than other plant milks. Its origins date back to the early 1990s, when Swedish food scientist Rickard Öste invented the drink while conducting research on lactose intolerance and sustainable food production. Öste later founded Oatly with his brother Bjorn – the first known commercial producer of oat milk.
In the following years, Oatly’s sales remained relatively low, largely because of a lack of marketing and branding. However, in 2012, the company hired current CEO Toni Petersson, who led a more sustainability-focused campaign over the decade that followed – primarily focusing on millennials.
In 2017, as part of its marketing campaigns in the US and UK, Oatly sales representatives provided specialty coffee shops with free samples of its barista-formulated oat milk.
With many baristas impressed by its neutral flavour, creamy texture, and ability to create high-quality microfoam, more and more coffee shops began to stock it – even leading to stock shortages following sharp rises in demand.
In the years since, more and more competitor brands have launched their own barista oat milks – including Alpro, Minor Figures, Califia Farms, Pacific Foods, Elmhurst, and Chobani – and sales of oat milk have continued to skyrocket.
How big is the market for oat milk?
Sales of plant milks have increased significantly in recent years, but the oat milk market has seen the most growth by far. In the US alone, retail sales of oat milk increased by more than 50% to US $527.44 million in 2022 – indicating its mass appeal among consumers.
Pedro Lisboa is the Head of Coffee Relations at Nude, an oat milk company in São Paulo, Brazil.
“The oat milk market is growing rapidly in the US and Western Europe,” he says. “In Germany, for instance, oat milk represents 60% of the overall plant milk market.”
He adds that while plant milks only account for around 3% of Brazil’s overall milk market, oat milk makes up a significant percentage of this segment.
There are a number of reasons for the explosive growth of oat milk. One of these is that now more than ever, consumers are more mindful of their health, as well as their impact on the environment.
“The production of oat milk results in lower levels of carbon emissions than other plants,” Pedro says. “Even though the production of oats requires more farmland than almond milk, it uses less water.
“Moreover, land and water use for producing cow’s milk is significantly higher,” he adds.
Jacek Walterowicz is co-founder of (Un)Ordinary, an oat milk brand in the UK.
“Consumers are aware of the sustainable benefits of oat milk, which is one of the most environmentally-friendly dairy alternatives when the ingredients are sourced and produced locally.”
He explains that (Un)Ordinary sources its oats from Britain, which helps to reduce the company’s carbon footprint.
Alongside sustainability concerns, the growing number of people following a vegan diet has helped oat milk become more popular. According to research from the German vegan supermarket chain Veganz, 2.6 million people stated they were vegan in a 2020 survey – double the number four years prior.
On a similar note, higher levels of lactose intolerance is boosting sales of oat milk in some countries. Research has found that between 90% and 100% of East Asian people have issues consuming lactose, which makes plant milks more attractive in these markets.
And while soy milk is traditionally still very popular in many of these countries, the Asia-Pacific oat milk market is expected to grow by 14.7% year-on-year until 2026.
Many people also believe that the taste and texture of oat milk is better than other plant milks, which has also led to significant growth of the market.
Daisy Swiers is the UK Country Manager for Califia Farms, a plant milk company in California, US.
“Many consumers prefer oat milk because of its neutral taste and similar mouthfeel to cow’s milk,” she says. “This familiar texture makes it popular among those who want to make a switch to plant-based milks.”
Why is oat milk so popular in specialty coffee?
Although oat milk sales have increased across several food and beverage categories, there has been substantial growth in the specialty coffee market in particular.
“Over the last 15 years, the specialty coffee sector has boomed,” Pedro explains. “As part of specialty coffee culture, baristas use milks which allow a coffee’s complex flavour notes to shine through.
“When steamed, oat milk has a natural sweetness which is similar to cow’s milk,” he adds.
Jacek agrees, saying: “When it comes to taste, oat milk complements the flavours in coffee, and doesn’t overpower them.
“It also performs well when steamed – creating a smooth microfoam with a creamy texture,” he adds.
Oat milk naturally contains less proteins and fats than cow’s milk – both of which are essential to create stable and high-quality microfoam. To compensate for this, many barista-formulated oat milks include plant-based gellan gum. This bonds with calcium molecules to thicken and stabilise microfoam – enabling baristas to pour high-quality latte art.
This has even led some specialty coffee shops to use oat milk by default, including Blue Bottle and Onyx Coffee Lab. In recent years, we have also seen some national Barista Championship competitors use oat milk in their routines, despite the unwritten rule against doing so.
However, the Specialty Coffee Association recently updated its rules and regulations for several 2023 World Coffee Championships, including the World Barista Championship. As part of these rule changes, a number of plant-based milks can now be used in the milk beverage course – indicating a growing awareness and acceptance of plant milks, including oat milk.
The growth of the plant-based ready-to-drink (RTD) coffee market has also helped to drive the popularity of oat milk. Now more than ever, there is a widening range of oat-based RTD coffee drinks, such as lattes, cold brews, and nitro lattes.
What might the future hold?
Pedro believes that oat milk’s popularity is unlikely to wane anytime soon. However, he notes that there could be a number of challenges which could influence growth.
“We expect more competitor brands to enter the market, as well as a possible decline in the supply of raw materials, and in turn, price increases.
“Furthermore, distribution to smaller towns can be difficult,” he adds. “There are also some regulations on the branding and marketing of oat milk because [using terms like ‘milk’] can cause confusion for some consumers.”
As the term traditionally refers to cow’s milk, some governments and regulating bodies have imposed restrictions on using “milk” or certain other descriptors on plant-based product packaging. Under current European Union legislation, for example, the term “milk” cannot be included on plant milk packaging.
However, despite these potential setbacks, Pedro says that “oat milk will remain the most popular plant milk [for the foreseeable future]”.
He adds: “There will be increased competition from other plant milk brands which use cheaper ingredients, but there will be significant innovation in the oat milk market, in terms of how it’s produced and overall quality.”
Jacek agrees, saying: “The next few years will be challenging for the overall plant milk beverage category, but oat milk will continue to lead the market.”
Daisy believes that consumers’ focus on health will also influence the growth of the oat milk market.
“The plant-based beverage category is showing no signs of slowing down,” she says. “Consumers are looking for plant-based drinks that offer complete nutrition, as well as containing more natural ingredients and less sugar.
“We anticipate high growth to continue as more people adopt a plant-based diet over the next five to ten years, however, depending on the brand, oat milks can contain more calories and sugars compared to other dairy alternatives,” she adds.
Furthermore, the recent emergence of plant milk blends which contain several base ingredients, such as oat, soy, and sunflower seed, could also have an impact on oat milk sales. Many of these blends have been developed to closely mimic the texture and creaminess of cow’s milk – a trend that is seemingly becoming more popular.
“Consumers have many options now, from independent brands that make fresh, bottled plant milks to more established companies which lead the market and help to create trends,” Jacek says.
It’s fair to say that oat milk has become a staple for many coffee shops around the world, and it’s likely that its growth will continue at pace over the next few years.
However, as the plant milk market gets increasingly saturated with new brands, there’s no denying that oat milk brands will need to differentiate themselves and remain competitive.
“Coffee shops and baristas now have more choice than ever before when it comes to oat drinks, so it’s up to brands to ensure their products stand out,” Daisy concludes.
Enjoyed this? Then read our article on what the future holds for plant milks & coffee.
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