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October 6, 2005

EUROPE: Sales of soya milk surge – research

The European market for soya milk and non-dairy drinks is expanding by over 20% per year, according to new research.

The European market for soya milk and non-dairy drinks is expanding by over 20% per year, according to new research.

A new study by Organic Monitor predicts sales to rise to €600m (US$723.7m) in 2005, boosted by product innovations and burgeoning consumer demand for health beverages. Most demand for non-dairy drinks was initially from consumers suffering from lactose intolerance; however, demand has broadened to include consumers seeking functional beverages and healthy alternatives to dairy milk. Soya milk in particular is popular because of its link to low incidence of heart disease, osteoporosis and breast cancer.

Product innovation has become a feature of the non-dairy drinks market. Angelique Anthian, consultant at Organic Monitor, said: “Manufacturers are re-positioning non-dairy drinks by launching new products as functional beverages and soft drinks.” She pointed out that new product launches in recent years included fresh soya milk, soya juice mixes and functional non-dairy drinks.

“Fresh soya milk, which competes directly with dairy milk on retailer shelves, is the fastest growing segment in the British non-dairy drinks market,” said Anthian. The study found that soya juice mixes are the most successful in the Spanish market where they are marketed by large juice and dairy companies. The Spanish market has been showing rapid growth with non-dairy drink volume expanding by 317% between 2001 and 2004.

The German non-dairy drinks market, also reporting exceptionally high growth rates, is projected to overtake the British market in 2005 to become the largest in Europe. Production of non-dairy drinks in Germany has accelerated in recent years due to an influx of new entrants and increased distribution in mainstream retailers. A major driver is the launch of non-dairy drinks under retailer private labels.

High market growth rates continue to attract new entrants. Belgian firm Alpro maintains its market leadership position although its market share is eroding. Anthian sees the American organic food giant Hain Celestial to emerge as the market challenger once it consolidates its European operations into one outfit. She said the market is becoming increasingly competitive and slowing growth rates will limit openings to new entrants.

“Market winners will be those companies that adopt strategies based on product differentiation as non-dairy drinks become increasingly commoditised,” she added.

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