Milk Substitutes

An Intolerance for Low Profits

Like milk, only more expensive.
  • Why it matters

    Why it matters

    Retailers, especially those catering to the vegan market, are cashing in on the current fad for milk substitute products.

  • Facts


    • German retailers sold €154 million of milk substitute products in 2014 – an increase of more than 40 percent over 2013.
    • The drinks often contain just a fraction of the milk substitute product.
    • Experts say there are few if any additional health benefits over cows’ milk.
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Sandra Neumeier is alternative in more ways than one. The young businesswoman has bright green hair and runs a small grocery store in Hamburg’s trendy St. Pauli district called Twelve Monkeys. It offers “vegan stuff,” meaning vegetable-based items – all in plastics-free packaging – that are usually produced locally. Strictly no animal products.

The store also sells milk that isn’t milk at all.

A wooden shelf in the store bends under the weight of milk substitutes and alternatives: Almond drinks, soy drinks, oat drinks, rice drinks and hazelnut, coconut and macadamia-nut drinks – some in many different varieties. A few spots on the shelves are empty, however.

“It can happen that the producers are unable to deliver,” Ms. Neumeier said. The drinks often sell so fast that production can’t keep up with demand.

Official stats on the milk-substitute market are hard to come by, but all available numbers point in one direction: Straight up.

The cheapest drink costs just under €2 per liter. At the nearby discount supermarket, a liter of cows’ milk costs less than half a euro.

“Producers are recording profits that other branches can only dream about,” said Sebastian Zösch, who monitors the market as chief executive of the German Vegetarian Association.

German food retailers generated sales of €154 million ($174 million) from milk substitutes in 2014. That’s an increase of more than 40 percent from the previous year, according to GfK, a German research institute. By comparison, cow milk rose by only 3.2 percent.

At Twelve Monkeys in Hamburg, the cheapest drink costs just under €2 per liter, but most products cost more than €3. At the nearby discount supermarket, a liter of cow milk costs less than half a euro. So why do so many people buy expensive substitute products?

A woman shopping at Twelve Monkeys explained her reasoning for buying a liter of soy milk with extra calcium for €2.15. She said she was neither vegan nor lactose intolerant, but that soy milk makes the best froth for coffee. And besides, real milk has too much fat.

Here’s how Ms. Neumeier described her customers: “Vegans of course. But only about a fifth. Most are from the offices here in the area.” She called them the “soy-chai-latte drinkers.” For those customers, only two reasons exist to buy milk substitutes: “Taste and health.”

You can argue about taste, but are milk substitutes really healthier?

“For people with an intolerance, they can naturally make sense,” said Joachim Westenhöfer, a professor for nutrition and health psychology at the Hamburg University of Applied Sciences. But he doubted that the number of people with such intolerances has increased in Germany in recent years.

“It is the fashion at the moment for all sorts of people who think they have such an intolerance,” he said.

But that’s more a psychological issue. Cow milk is considered unhealthy in certain circles, and more and more, people seem to be tracing their health problems to milk consumption – and decide in favor of more expensive substitutes.

Nutrition scientists doubt substitutes are healthier for people who don’t suffer from intolerance. Almond drinks, for example, mostly consist of water. Often the second-biggest ingredient is sugar.

Usually almonds are the third-largest ingredient. Various vitamins and calcium are usually added to almond drinks.

“The nutrients then approximate those of cow milk,” said Susann-Cathérine Ruprecht of the German Institute of Human Nutrition in Potsdam near Berlin. “But only in an artificial way.”

In other words, the milk substitutes are not healthier than real milk. Just more expensive.

At the moment, a kilo of almonds costs just under €14 on the open market. The market-leading almond drink, made by Belgian firm Alpro, has, according to its list of ingredients, an almond content of 2 percent.

So that means the value of the almonds contained in one liter of its drink isn’t even 30 cents.

Applying the same calculation to Alpro’s soy drink, you come up with a raw material cost of only 4 cents. The store price is almost €2.

Alpro, which had €385 million in sales last year, justifies the price as the result of what the firm says is a complicated production process. The almonds are, for instance, roasted and ground before they are used in the drink.

The company declined to allow a journalist to watch the production process.

Twelve Monkeys owner Ms. Neumeier is negotiating with a producer for delivery of a new product line known as seitan drinks. Seitan is a wheat gluten that, among other things, occurs in the production of bioethanol. The producer of seitan is in Germany. “So the distance for delivery is very short; the drink could be quite inexpensive,” she said.

Ms. Neumeier assumes, however, that it will still cost more than €2. This is a result of the “soy-chai-latte drinker” fad. These buyers don’t care about the price, they buy just about anything in a green package.

“That makes veganism look insanely expensive,” said Ms. Neumeier, and doesn’t encourage people to take up non-animal products.

Thus the impression remains that the boom in milk alternatives is above all a good business for producers, with a rate of return that dairy farmers can only dream about.

For consumers, the substitute drinks are often just a status symbol, said Swiss nutrition psychologist Patricia van Dam. “They are consciously differentiating themselves from (discount supermarket chain) Aldi customers when they have expensive almond milk in the refrigerator.”


This article originally appeared in the newspaper Die Zeit. To contact the author:

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