Challenges step up for European non-dairy segment

Extensive consolidation activity and new product launches are contributing to an increasingly competitive market in non-dairy, and one which throws up new opportunities for ingredients firms supplying the sector.

"The addition of Natumi to the Hain Celestial stable gives the American giant a direct presence in the European non-dairy products market,"​ comments market analyst Organic Monitor​.

Natumi produces a range of non-dairy drinks and soya-based desserts. It started production in 2001 and has since been developing a pan-European presence, reporting a 150 per cent increase in sales in 2003.

This latest investment by Hain Celestial follows hot on the heels of two recent acquisitions that the company made - Belgian firm Lima and California-based Imagine Foods. Both companies offer non-dairy drinks in the European market with the Rice Dream brand of Imagine Foods the leading rice drink in Europe.

"The acquisition of Natumi is highly significant because it provides Hain Celestial with a strong platform to challenge the dominant European player Alpro in the fast growing non-dairy products market,"​ said Organic Monitor.

According to the analysts, Alpro has dominated the European market since it first started producing soya milk in the 1980s. It has successfully deployed a brand extension strategy in which it has launched a range of soya-based drinks, yoghurts and desserts under the Alpro and Provamel brands, added Organic Monitor.

New product launches are also putting competitive pressure on Alpro's market position. One significant development is the launch of soya-based desserts by Murcia-based Laboratories Almond. Natur Green soya desserts are one of the few organic non-dairy desserts available in the European market. They come in three flavours - vanilla, chocolate, and apricot, and they are being rolled out across Europe. The market analysts predict that although the target market for the soya desserts are specialist retailers they are expected to attract interest from supermarkets due to growing consumer demand for dairy alternatives.

Laboratories Almond also produces organic almond-based desserts, which are also marketed under the Natur Green brand. Its sister company Nutriops is the leading producer of nut-based dairy milk alternatives in Europe.

"Organic Monitor sees this as a bold move by Laboratories Almond. Many companies are eyeing the non-dairy desserts market in Europe, however few firms have ventured out from the drinks segment. Laboratories Almond is likely to put some competitive pressure on Alpro, which leads the soya-based desserts market,"​ said the research firm.

They predict that the move will trigger a number of product launches from competing firms with more soya-based desserts likely to be introduced. Natur Green could build market share by taking advantage of its established distribution infrastructure for nut-based products, adds Organic Monitor.

Soya drinks dominate the European non-dairy drinks market. Soya milk is the most commonly used dairy milk substitute with improvements in taste and quality helping to broaden consumer demand. Research and development is thriving at this end of the food and beverage industry with companies focusing on new product developments o expand the category.

Increasing demand for soyfoods, driven by consumer awareness of soya's health benefits, has triggered the launch of a number of new soy ingredients. ADM's Novasoy whole bean powder was recently launched at the European Food Ingredients Europe show in November last year.

Soyfood sales are soaring in Europe, according to a recent report, with consumption of soya-based drinks and desserts up by over 20 per cent in 2002, valued at €1.3 billion, say authors Prosoy.