StartThis Idea #3: Just-add-water plant milk pods
Ditch the cartons, the market is ready for something new.
A plant milk product that comes in just-add-water packets or pods, reducing waste, making plant milks more price competitive, and giving the consumer more options for customization.
Categories: direct to consumer, food and beverage, grocery, packaging, processing, sustainability
Skills needed: fabrication*, food manufacturing*, marketing, supply chain
(*if you choose to make in-house.)
The Pitch
Nut and plant milks are one of the fastest growing food categories globally. Since these non-dairy milks will continue to be in high demand for environmental impacts and longer shelf life, there’s a huge opportunity to close the gap on price and accessibility by using a new method of delivery through a concentrated just-add-water product. Today, nut and plant milks still tend to be twice the price of dairy milk because the market is incredibly decentralized, and can’t capture the same scale economies as dairy. Competing with dairy products using the same retail distribution and packaging is an uphill battle, but consumer trends suggest the market is ready to mass-adopt a product that can reach price parity with dairy.
There are two major streams available for the plant milk concentrates. The first could be a potentially huge category in the same ballpark as Keurig or SodaStream, where there’s a proprietary technology to accompany the product and blend it for the consumer. The second is the plant milk itself, considering what applications would be most marketable like powder, dissolvable pods, liquid concentrate, or something completely different. Depending on your level of ambition and expertise, you could choose either a technology plus product, or a standalone product. The technology route would grant more control over the product and distribution to keep competition out, whereas the standalone pod/packet would get you to market faster. With the standalone version, it is also likely that you could contract production from an existing manufacturer and avoid most of the upfront investment. Either can work – choose your own adventure!
The biggest opportunity here is to save on the amount of required packaging to house the product, plus saving weight in shipping. Imagine being able to purchase the equivalent of 6 gallons of soy milk in a container the size and weight of a tissue box.
There are so many options for customization with this model, too, in terms of creaminess, texture, and flavour combinations. Additives like protein or vitamins could extend the marketability to include the health and wellness industry as well.
Background
The price gap between plant-based milks and dairy milks is driven by dairy subsidies that deflate the consumer price to well below a competitive margin for non-subsidized market challengers. Milk production also dwarfs the production of all plant milks combined, with little evidence to suggest that’s going to change any time soon.
Plant milks have come a long way in a fairly short amount of time in their packaging and processing; there’s room to do more. The invention of the TetraPak, among other package design, has brought some more sustainable materials to the table, but as with so many other liquid products, there’s an opportunity to scale down the sheer amount of those materials with more concentrated products inside.
The primary ingredient in most nut milks is water, up to or exceeding 95%. The last 5% is the nut base plus any stabilizing or texturizing ingredients. This base can be concentrated and sold directly to the consumer at much lower cost than pre-mixed dairy alternatives. Just like electrolyte powders or juice concentrates, plant-based milks are a prime candidate to be distributed in eco-friendly packaging and reconstituted at home. Importantly, the same is not true of dairy. Milk powders produce a product that is inferior, and less palatable to consumers. Dairy farmers also lobby against these products, as they make it easier for foreign dairy products to enter the market. These plant milk concentrates have an unfair advantage in this category.
The issue of scale is worth noting here as well. Since dairy milk is such a centralized, scrutinized industry, the supply chain is built to suit its needs. Nut and plant milks have vendors all over the place and are dealing with their own supply chain that’s not necessarily designed to handle large, heavy products at every step of the way. It’s just not streamlined in the way dairy milk is. Transportation costs due to the realities of decentralized distribution end up inflating the price to accommodate for inefficiencies.
Data points & research
· The plant milks market will be valued at over $36 billion worldwide by 2026 [Business Wire]
· Soy milk is approximately 94% water [Science Direct]
Strategy notes
Start with a direct to consumer model. There’s no reason to compete for shelf space and eyes in a retail environment before word of mouth is established. This is such a booming market that using a Kickstarter campaign or other public awareness strategies can help develop a niche following might be more than enough to get the product launched.
This concept has the potential to be a marketer’s dream! They’re essentially creating a new category, and a strong brand is what will really drive this. It’s a huge industry that will only continue to grow as consumers become more mindful of the environmental impact of factory farming and the alternatives to bulky packaging. The tough part will be hooking the first early adopters, even though the product is high-quality and endlessly customizable on the consumer end.
If the product doesn’t need specialized equipment to mix, there’s an easy entry point to the market with free sample campaigns, social media pushes, and joint marketing with similar brands. If the product does need a prep device, then a Kickstarter campaign and strong referral program might be the way to go for the injection of fabrication/manufacturing capital.
The risk of copycats might be high so push into brand recognition and intellectual property strategies right away. If the product is made using a device, you’re halfway to getting the entire system classed as proprietary. Think about SodaStream: they’ve basically cornered the market on the device, though there are copycat cartridges out there. In terms of packet design, there are still opportunities to pursue patent or trademark rights to the concepts, processes, and associated terms.
Possible names or tagline
PMP (plant milk pods), Plant Shots (SoyShots, OatShots, etc), Cartonless
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