Monday, 2 September 2024 Reading time : 2 minutes

Milk alternatives are becoming increasingly popular. This is also the case in Switzerland, where sales of plant-based milk alternatives have increased by more than 70% to CHF 172 million between 2017 and 2021. Although dairy alternatives occupy a niche position compared to cow's milk, their market share has grown steadily over the period under review, according to an analysis by the Swiss Federal Office for Agriculture. At the same time, consumption of cow's milk is declining. For example, Americans have almost halved their milk consumption over the past 50 years. The US Department of Agriculture (USDA) cites three main reasons: generational differences, with younger people consuming less milk than older people; health and nutrition trends; and a variety of beverages available, including soft drinks, juices, bottled water and plant-based milk alternatives.

It is now standard practice for coffee shops to offer at least one dairy alternative. Customers often pay a premium for plant-based milk. In supermarkets too, dairy alternatives are more expensive than cow's milk. A look at the ingredients might not suggest this. Oat milk, for example, is mainly water, oats and rapeseed oil, and it takes about 23 grams of almonds per litre to make almond milk – that's about eight almonds. 

Oatly claims to be the world's largest producer of oat milk. The Swedish company knows how to meet consumer needs and has responded to concerns about the high sugar content of oat milk by offering a sugar-free alternative. There are also options with fewer additives, less fat or a barista edition. However, while the company is seeing sales volumes rise again after a slump in demand, it is still loss-making. Since its IPO in 2021, Oatly has lost more than 90% of its market value. 

One of Oatly's main competitors is the French food company Danone. It has successfully positioned itself in the dairy alternatives market with its Alpro brand. According to data provider Statista, Alpro dominates the oat milk market in Germany, with Oatly in second place. In addition, Alpro achieves solid margins that are above the dairy industry average, according to data provider A Insight. Alpro seems to benefit from the advantages of its parent company and, unlike Oatly, can draw on Danone's production network and financial strength.

Another dairy alternative on Swiss grocery shelves is sold under the brand name Beleaf, which is produced by Emmi. The company uses its home advantage, promoting its oat drink as made from Swiss oats with no added sugar.

Barrier Reverse Convertible on Danone and Emmi
6.8% p.a. BRC on Danone and Emmi
Barrier: 77%
Swiss Security Number: 135 805 181

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