The market for plant-based milk has grown 50% in 2020 according to a recent interview conducted with LuLu and other leading retailers in the UAE. However, it is foreign imported brands that are capitalizing on this growth in the GCC commanding prices of over 10 AED / Liter with some premium brands commanding 30 AED / Liter. Despite this high price point, the demand keeps growing and this has created a high value perception for plant-based products on the shelves in the GCC.
High Margin & Growth Opportunities with Plant-Based Milks
“Supermarkets, online retailers,
gas stations, coffee shops and hotels are all serving plant-based dairy alternatives from milks to creamers and ice creams. ”
“Starbucks, Costa Coffee and all other Coffee chains have introduced plant-based milks to their menu.”
Plant-Based Milk: Growth Key Factors
Below are some of the key factors driving the fast growth of this category in the GCC:
✅ 48% of consumers claim to prefer the taste of Almond and Oat Milk to Cow’s Milk.
✅ 65% of Middle East consumers suffer from some form of lactose intolerance according to the Food Intolerance Network. 33.5% suffer from severe lactose intolerance according to the World Health Organization (WHO).
✅ Consumers are moving towards healthier and cleaner label products which are free of cholesterol, antibiotics and hormones. In a 2020 Poll by Mintel 85% of Saudi adults said they are willing to make short term sacrifices for the sake of their long term health.
✅ The COVID-19 pandemic has made a health a key priority for everyone and accelerated the trend towards healthier eating. Plant-Based diets are medically proven to be healthier than animal-based ones.
✅ The pandemic has also created skepticism surrounding the origin of animal products and conditions in which animals are raised.
✅ Issues of environmental sustainability and the ethics surrounding animal agriculture are turning some consumers away from animal-based products.
Plant-Based diets are free of cholesterol and are proven to reduce the risk of heart disease by 40%.
Plant-Based Milk Opportunity
These factors have created a clear opportunity for local brands to steal market share away from imported brands with more competitively priced products which can still command premium margins due to the high value pricing already present in this category.
According to Euromonitor, the market for health and wellness packaged foods was worth an estimated Dh3.9 billion in 2020 and is expected to grow to Dh4.6 billion by 2025. The fast growth of the market signals an opportunity for innovative companies to enter the market early and carve their space on the shelves before it gets more competitive.
PRICE RANGE OF IMPORTED PLANT-BASED MILK IN UAE (Pricing data from Carrefour, Lulu, Choithrams & Spinneys)
Imported Plant-Based Milks in the UAE Market
Plant-Based Milk Opportunity
Consumer willingness to pay more for foods with health attributes, by region 2015
Source: Nielsen, ”What’s in our Food and on our Mind” (August 2016): Nielsen, ”We are What we Eat” (January 2015)