Oat Milk Coffee RTDs and the Growing Oat Milk Trend

pouring a latte

Oat milk is edging out other dairy alternatives in coffee, leading to growth in oat milk and coffee ready to drink (RTD) beverages


Over the past three years, oat milk has seen almost 60% CAGR menu growth, according to Datassential. More coffee shops are adding oat milk to their menu as a dairy alternative, with some cafés replacing soy milk and nut milks altogether. Younger generations are especially driving the trend, with nearly 20% of Gen Zers expressing interest in oat milk lattes, according to Mintel’s Coffee and Tea on Premise July 2019 report. Oat milk's free-from claims and flavor appeal to younger and older consumers alike.

We sat down with Kerry Liquid Chef and Beverage Applications Manager Levi Andersen to discuss the growing oat milk trend, including the common consumer challenges oat milk can solve and how brands can compete in the growing oat milk coffee RTD (ready to drink) market.


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KerryDigest (KD): Why do you think consumers are starting to use oat milk in their coffee? Is it a flavor play? Free-from claim? Texture?

Levi Andersen (LA): Consumers are choosing oat milk for so many reasons: texture, allergy issues, sustainability and of course the core feature, a flavor that pairs amazingly with coffee. Oat milk brings two breakfast champions together: coffee and oatmeal. As a barista, it makes sense to me that it works well.  

It may sound silly, but baristas were and are very excited to have a new café ingredient to play with. If you look at the café world, we really have a simple set of tools and ingredients. Look at a bar as a comparison. Mixologists have so many mixers and spirits to work with. So as baristas are tasting and using oat milk, they’re excited by the novelty of it and are telling their customers about it.

vegan white russian recipe

KD: How does oat milk compare with milk and other milk alternatives in coffee applications?

LA: For years, two of the first popular dairy alternatives were soy milk and almond. But it was hard to get a soy milk that had the correct blend of fat, sugar and ultimately texture to really, truly replace milk. It also wasn’t really a flavor that went with coffee, so manufacturers started adding vanilla flavors to replicate the missing dairy flavor. Then there was almond milk, but almonds can be very drying and bitter, which is not a good pairing for coffee. Also there are allergy and food safety issues for a café to consider when using almond milk in their milk pitchers. Plus it can be difficult to achieve a good latte foam with almond milk.

Some other alternative bases entered the scene. Coconut milk showed a lot of promise, tied into coconut water entering the U.S. market. I personally love coconut and coffee, but coconut milk can produce a thin texture when hot and impart a lot of flavor to the coffee drink, which not all consumers like. Other alternatives such as milk from rice, hazelnut, cashew, macadamia and hemp have also entered the scene. Some work well in coffee but have other hurdles. For instance, hemp milk pairs great with coffee, but the U.S. import regulations make the cost too high for a café to really use and charge consumers for.

Then oat milk came into play. Oat milk is vegan, shelf stable and more sustainable than traditional dairy – three very important wins that milk cannot deliver on.

KD: Almond milk and soy milk are still the most common milk alternatives, but oat milk has grown astronomically since 2017. Do you see oat milk continuing to trend?

LA: In 2018, the biggest joke I saw on barista forums and social media was about the massive, global shortage of oat milk. For nearly a year it was more expensive in some markets for a café to source oat milk than espresso. That is a first in the café scene.

Now that we have a few manufacturing facilities in the U.S., I am optimistic there will be enough supply. But will people keep wanting oat milk, or is it a trend? My personal belief is that oat milk will become and remain one of the most popular milk replacers, at least in coffee. Last weekend I saw a café eliminate all milk alternative bases besides oat. To me, that represented a big shift and an indicator of what’s to come.

barista pouring drink

KD: What oat milk trends are you seeing in the coffee and tea world? Oat foam? Oat creamer? RTD oat lattes?

LA: As far as new oat products in grocery stores, there are oat creamers, oat ice cream and oat milk – some oat milk is even formulated to foam when steamed by a barista. In 2018, I was asked several time if I knew how to make an oat base that when steamed, produced the right texture. With the launch of so many new products, the texture has gotten better and better.

For applications, oat milk is primarily used at coffeehouses and some juice spots. Will oat break into the bar and restaurant scene? It’s possible, but I haven’t seen it quite yet. Baristas are using the familiar flavors of maple, cinnamon and raisin and pairing them with coffee to create applications such as “oatmeal cookie” beverages and similar variations, which I’ve enjoyed. My personal favorite is making an oat milk chai tea, then adding a splash of carrot juice – it tastes like a fresh slice of carrot cake.

 

At Kerry, we have the ability to develop new and unique dairy alternatives that have the taste profile consumers demand, and the functionality that operators need. Contact us to learn more about how you can utilize consumer trends in your next dairy alternative formulation.

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