[Watch] Functional ingredients may drive diversification in milk alternatives

For plant-based milks seeking a similar nutritional profile as conventional milk, fortification is key, Dornblaser said.

“I think as far as alternatives can go to mimic that nutritional profile, the better. That is going to be … vitamin D, most definitely calcium, which is something that is often missing in dairy alternatives,” she said.

However, she sees both milk and milk alternatives aligning on certain fortifications like omega-3 fatty acids.

Higher sugar continues to remain a challenge in plant-based milks to counter bitter notes, but companies offering sugar-free, no added sugar or unsweetened varieties are growing, Dornblaser noted. She highlighted “’unsweetened,’ tends to be the language … in plain [plant-based milks].”

Functional ingredients, precision fermentation may deliver on taste and price

Dornblaser noted that incorporating different functional ingredients may create a “bifurcation in dairy alternative drinks” where “you have some that mimic dairy milk” and others that “do not try to be dairy milk, but are offering additional benefits.”

Prebiotics, probiotics and functional fiber are other areas of significant potential for milk alternatives — but without being a yogurt alternative drink, Dornblaser explained.

Other ingredients like adaptogens, mushrooms and protein used in other functional beverages, like tea, coffee, smoothies and sparkling drinks, also serve as inspiration to set plant-based beverages apart from its dairy cohorts, Dornblaser explained.

“Something we do not see much of in dairy alternatives, but we do see in other types of beverages, is the use of … adaptogens [and] nootropics that are all about mood regulation, ingredients that promote sleep [and] ingredients that promote energy,” she said.

While taste continues to drive consumers’ purchasing decisions, price comes in close second, Dornblaser said. Precision fermentation may offer a solution to balance both taste and price, making it more accessible to consumers, she said.

"If [precision fermentation] can deliver on an advantageous price point, and not just be ... everything that dairy might be, and to do it at a good price that consumers will accept, that could change so much for the industry," she said.

Gen Z already prefer the taste of milk alternatives, creating an opportunity for brands to connect with this consumer base

As Gen Z consumers’ buying power continues to grow as they age, Dornblaser noted that these shoppers already prefer the taste of alternative milks, which “is a huge positive.”

She added, “So you attract them now, you get them attached to your brand and even if they are not buying, they will eventually.”