Milk Alternatives, 2023 State of the Industry
As the animal-free dairy industry continues to innovate plant-based milk, it is also embracing biotechnology, namely precision fermentation and cell culture, to create products that better recapitulate the taste, flavor, nutrition, and functionality of animal-derived milk. The technological, regulatory, and commercial successes from the last ten years hold promise for future animal-free milk products.
Plant-based milks are growing in popularity and variety.
Milk Prices
Today, plant-based milks are available from a wide variety of sources (e.g., soy, oat, coconut, pea, and various nuts) and are growing in retail sales despite being nearly twice as expensive as cow milk on average ($2.97/L vs $1.63/L), as shown in the bar graphs above. According to data from SPINS*, a market research company, plant-based milk rose 6.4% to $2.3 billion in retail sales in 2022, with even faster growth for certain categories of plant-based milk. Almond and oat milk are currently the two most popular plant-based milks in the US with $1.2 billion and $527 million in retail sales, respectively. Oat is also the fastest-growing plant-based milk, with a 51% increase in the 52-week period preceding June 2022, followed by pea milk with a 27% increase to $60 million.
Plant-based milk production typically begins by physically breaking down raw plant material (i.e., through wet or dry milling). To prepare for milling, the raw material is often soaked or dehydrated, and enzymes may be added to begin biochemically degrading the raw material. After milling, particles, insoluble material, and other unwanted plant components are removed through filtration/centrifugation, followed by homogenization and sterilization to improve product stability and shelf life. Gums, oils, sweeteners, and other ingredients may be added to improve the organoleptic and functional properties of the final product.
The use of new raw materials and processing methods has improved the quality of plant-based milk.
Protein Content of Plant-based and Animal-derived Milks (in grams per cup, or 240mL)
One of the main challenges for plant-based milk is in improving its nutritional properties, especially protein content. Many plant-based milks, with the exception of soy milk, have lower protein content compared to animal-derived cow milk, as shown in the figure above. For example, Silk Original Soymilk and cow milk both have about 8 grams of protein per 8-ounce serving, while Silk Almond Milk has about 1 gram per serving. Some companies are turning to alternative raw materials to produce plant-based milk with higher protein contents. Ripple Foods and NotMilk, for instance, both make pea milk with as many as 8 and 4 grams per 8-ounce serving, respectively. Companies may also enhance the nutritional value of their product by changing their manufacturing process. Oatly, for example, has patented a process for preserving more soluble fiber from the oats they use to make their milk.
Another common challenge with plant-based milk is the lack of certain functional (i.e., foaming) and organoleptic properties (i.e., smoothness) of animal-derived cow milk. As a result, many plant-based milk companies rely on the addition of oils, gums, and emulsifiers (e.g., sunflower oil, rapeseed oil, gellan gum, and carrageenan) to impart a smooth, creamy texture and improve foaming, as is commonly done for the “barista” versions of plant-based milk brands. Some of these ingredients, however, are disfavored by some consumers who are weary of highly processed foods. Many of the ingredients introduce high levels of sugar and fat without also adding beneficial proteins or fiber. Elmhurst 1925’s HydroRelease milling process omits the need for such ingredients in their nut and oat milks by including a step to promote starch gelatinization, resulting in a creamier product.
The plant-based milk industry continues to evolve and respond to consumer needs.
As the plant-based milk industry grows, the types of plant-based milk products and regulations around plant-based milk are also expected to evolve. Some companies have begun to experiment with blending different kinds of plant raw materials, or creating hybrid products composed of plant-based milk and cow milk to optimize for different nutritional, functional, and organoleptic properties. Additionally, new processing technologies may help drive the development of new, improved plant-based milk. Regulations for plant-based milk are also in development: FDA recently issued draft guidance for industry recommending that plant-based milk products with a nutrient composition different from milk provide consumers with additional information to make it easier for consumers to make informed dietary choices.
Precision fermentation produces animal-derived milk proteins and fat via genetically engineered microbes.
Precision fermentation-based milk uses microbes to produce ingredients - primarily casein, whey, and to a much smaller extent, milk fat - that are similar or identical to those found in animal-derived milk. Whey proteins (e.g., beta-lactoglobulin, lactoferrin) account for approximately 20% of the total protein in cow milk, while casein proteins account for the remaining ~80%. Casein is additionally responsible for milk’s characteristic white appearance, creaminess, foaming ability, and ability to be turned into cheese. Other nutritional and bioactive components in milk include lactose, antibodies, growth factors, hormones, and microflora.
The process of precision fermentation generally consists of 1) genetically engineering a microbe to produce a target molecule, 2) fermentation scale-up, and 3) target molecule extraction and purification. Precision fermentation has previously been used in both pharmaceutical and food applications, including in the industrial production of insulin and rennet (an enzyme mixture used in cheesemaking). Within animal-free milk alternatives, precision fermentation is mainly used to produce milk proteins for different dairy products, especially milk and cheese, the two most commonly consumed dairy products in the US .
Casein and whey proteins have been the primary focus of the precision fermentation dairy industry.
Companies using Precision Fermentation to Produce Milk Products. (See Cheese Alternatives, 2023 State of the Industry for companies producing milk proteins for cheese products.)
The first company to make an animal-free dairy milk protein was Perfect Day, a California-based company founded in 2014. Perfect Day’s whey protein is produced in Trichoderma reesei, a non-pathogenic filamentous fungi commonly used for industrial protein production, and received an FDA “No Questions Letter” affirming the ingredient’s GRAS status in 2019. Since then, Perfect Day’s whey protein has been used in a variety of different foods, including milk alternatives like Very Dairy, Nestlé’s Cowabunga, Tomorrow Farms’ Bored Cow milk, and Strive FREEmilk, all introduced in 2022. Notably, Bored Cow and Strive FREEMilk both cost ~$6-7/liter, comparable to the cost of macadamia milk ($5-6/liter), as shown in the bar graphs above.
Israeli company ReMilk is also targeting whey protein, but is instead using Pichia pastoris, a yeast commonly used in industrial protein production, as the production organism. Compared to Trichoderma reesei, strain development in Pichia pastoris may be easier and less time-consuming. In February of 2023, the company announced that its recombinant whey protein received regulatory approval in Singapore as well as a letter from the FDA affirming the protein’s GRAS status. Remilk is currently focusing on fermentation scale-up in collaboration with CMOs; it ultimately plans to build its own 750,000-square-foot full-scale fermentation facility, which is expected to be one of the largest in the world.
Australia-based All G Foods and India-based Phyx44 Labs are both expected to launch products in 2024/2025. All G Foods’ animal-free dairy product is expected to be a precision fermentation-derived casein or whey protein, and will be sold under the name “Milkcell.” Phyx44 Labs will focus on developing precision-fermented milk fat, which differentiates it from many other precision fermentation companies, in addition to whey protein and casein.
Two companies using precision fermentation to produce human infant formula milk proteins are New York-based company Helaina and South Africa-based De Novo Foodlabs (formerly De Novo Dairy), founded in 2019 and 2021, respectively. De Novo Foodlabs plans to release its first product, precision fermented lactoferrin, in 2023. Lactoferrin is a key component in both human and cow milk, and has antimicrobial and immunomodulatory properties. TurtleTree has also been successful in making lactoferrin; TurtleTree’s precision fermentation-based lactoferrin is slated to become commercially available in Q4 2023.
Cell-based milk is produced by culturing mammary cells in vitro.
Cell-based milk refers to milk alternatives produced via in vitro culture of mammary cells, which are responsible for milk synthesis. To do this, mammary cells are harvested via biopsy and grown under laboratory conditions in the presence of the nutrients and growth factors that stimulate the production and secretion of milk constituents (i.e., lactose, milk fat, milk proteins like casein) into the culture media. Medium used to culture the mammary cells, now containing aqueous and lipid milk constituents, is then harvested and may undergo further purification/processing prior to commercial use. Multiple companies, including Biomilq and Opalia Foods, describe the use of bioreactors containing separate compartments for mammary cells and culture media, thus simplifying milk harvest. Compared to plant-based and precision fermented milk, cell-based milk has the potential to better recapitulate the complex chemical composition, nutritional value, and organoleptic properties of animal-derived milk.
Cell-based milk companies report successes in product development.
Cell-based Milk Companies
Although cell-based milk is not currently commercially available, numerous startups are developing technology to create cell-based milk. In April 2022, Israel-based Wilk (formerly Biomilk) became the first cell-based milk company to go public. Wilk was recently granted a U.S. patent for their cell-based milk production process, and has reported success in producing human lactoferrin. Wilk has also developed the world’s first yogurt containing cell-cultured milk fat and ultimately aims to have their product replace the vegetable fats currently used in infant formula. Turtletree, after successfully producing lactoferrin via precision fermentation, is also developing technology to produce milk or milk constituents via in vitro culture of mammalian cells, including mammary and non-mammary cells.
Other companies targeting cell-based milk include US-based Biomilq and Canada-based Opalia. In 2021, Biomilq reported success in making human breast milk in a lab. Biomiq notes that its product, though not bio-identical (e.g., lacks the antibodies and microflora of human breast milk), is nutritionally superior to commercially available infant formulas. In contrast to Biomilq, Opalia is targeting cell-based cow milk, followed by other dairy products, with anticipated commercial availability in 2028.
The alternative milk industry remains ambitious, and ideas started nearly a decade ago have demonstrated success and growth.
The technological, regulatory, and commercial successes seen by plant-based, precision fermentation, and cell-based milk companies hold promise for future growth in the animal-free dairy industry. Since Perfect Day was founded in 2014, an increasing number of companies are leveraging biotechnology to create animal-free milk and milk constituents that better mimic the properties of animal-derived milk. There are now numerous existing and anticipated products across all three categories of milk alternatives. Additionally, attempts to streamline regulation are expected to expedite the growth of animal-free milks made using biotechnology. Future milestones in the development of milk alternatives include scaling up the production of precision fermented milk proteins, and developing and optimizing methods for producing milk fat and culturing mammary cells at scale. Together, these advancements will further the development of animal-free milk that captures the properties of animal-derived milk.
*Excludes sales at certain retailers, including Whole Foods and Trader Joe’s.
Written by Wei Ng, Helikon Associate
Edited by Jeremiah Johnston
Charts by Diana Garibay, Helikon Associate
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