Environment

The Environmental Advantages of Plant-Based Milk Over Dairy Milk

2023.3.6

The market for plant-based milk, a prominent substitute for dairy milk, has expanded significantly in recent years, both globally and in Japan. This article will examine the future market expansion trends, compare the environmental impact of dairy milk and plant-based milk, and discuss the importance of Life Cycle Assessment (LCA) in highlighting the environmental advantages of plant-based milk to consumers.

Table of Contents

1 Plant-Based Milk: Definition and Overview
2 Market Expansion Trends in Plant-Based Milk and Their Background
- 2.1 Market Trends
- 2.2 Shifts in Consumer Values
3 Comparison of the Environmental Impacts of Dairy Milk and Plant-Based Milk
- 3.1 Environmental Impact of Dairy Milk Production
- 3.2 Environmental Impact of Plant-Based Milk Production
4 The Role of LCA in the Plant-Based Dairy Alternatives Market
5 The Future of Sustainability Branding to Consumers

Plant-Based Milk: Definition and Overview

Plant-based milk (hereinafter referred to as “plant-based milk”) is a dairy substitute crafted from plant sources. Generally, it refers to beverages made by breaking down these plant materials and dissolving them in water to achieve a similar appearance and taste to cow’s milk. The ingredient categories include cereals such as rice and oats, legumes such as soybeans and peanuts, nuts and seeds such as almonds, coconuts, and hazelnuts, and pseudocereals including quinoa and amaranth. In the market, however, soybeans, almonds, and oats account for the majority of commercially available plant-based milk products (*1). The market for dairy alternatives is expanding beyond beverages into various product categories like yogurt, cheese, and ice cream, but this article will focus specifically on the beverage segment.

Market Expansion Trends in Plant-Based Milk and Their Background

Market Trends

The global plant-based milk market was valued at approximately USD 14.8 billion in 2017. It surpassed USD 18.0 billion in 2020 and is projected to reach approximately USD 37.7 billion by 2026 (*2). For food manufacturers, building and diversifying a portfolio that includes both animal and plant-based proteins is increasingly recognized as a strategic approach that not only mitigates supply chain risks and enhances responsiveness to shifting consumer preferences, but also contributes to long-term corporate growth and innovation. One example is Danone, a major French dairy manufacturer with a leading global market share in the dairy sector. In 2021, the company announced plans to transition one of its large-scale manufacturing facilities in France from dairy milk production to plant-based milk production (*3).

A similar market expansion is observed in Japan. The consumption of plant-based milk was approximately 320,000 metric tons in 2017, and it is expected to grow to approximately 820,000 metric tons by 2026 (*4). While major domestic corporations like Marusan and Kikkoman account for most of the market share for soy milk, the largest segment within plant-based milk, venture companies such as NEXT Meats and international players like ALPRO are actively expanding sales of oat milk (*5)(*6)(*7)(*8). The adoption of plant-based milk is also accelerating in restaurants and cafes. Starbucks began offering soy milk as an alternative to dairy milk in 2001. Subsequently, it launched the full-scale provision of almond milk and oat milk in 2020 and 2021, respectively (*9).

Shifts in Consumer Values

As described above, the expansion of the plant-based milk market is largely driven by a shift in consumer values. This shift is illustrated by data from a survey conducted by Euromonitor International, a UK-based market research firm. According to the survey, 42% of consumers worldwide are reducing their consumption of animal-based foods (*10).

When examined by generation, this figure remains at 34% among Baby Boomers (born approximately 1946–1964), while it rises to 54% among Generation Z (born approximately 1996–2012). Based on this data, it is likely that the proportion of ‘flexitarians,’ or individuals who occasionally incorporate such plant-based diets into their eating habits, will continue to increase in the future. While this trend is seen across plant-based foods, a primary factor driving the increased demand for plant-based milk is the rising consumer concern regarding the environmental impact associated with dairy milk production.

Comparison of the Environmental Impacts of Dairy Milk and Plant-Based Milk

Environmental Impact of Dairy Milk Production

In practice, the environmental impact of dairy milk is notably high when compared to major plant-based milk alternatives such as soy, oat, and almond (*11). This is most notably evident across three key indicators: (1) greenhouse gas emissions, (2) excessive resource consumption, including resources such as water and land, and (3) pollution and eutrophication. Research published in the journal “Science” reported that dairy milk production results in approximately 4.5 times the greenhouse gas emissions of almond milk, roughly 18 times the land use of almond milk, about 22 times the water use of soy milk, and approximately 10 times the impact on eutrophication compared to soy milk (*11).

The following sections examine each of these three indicators in greater detail:

①Greenhouse Gas Emissions Associated with Cattle

The greenhouse gases released throughout the dairy milk production process account for a large portion of food-related emissions. Within the food sector, the dairy industry as a whole is considered the second largest source of greenhouse gas emissions, following meat production (*12).

Methane is a particularly significant contributor to greenhouse gas emissions from dairy production. Methane is the most potent greenhouse gas among those produced in the digestive processes of ruminants such as cattle, found in their belches and excrement. A study published in 2013 by Wageningen University indicated that over 80% of greenhouse gas emissions during the dairy milk life cycle are attributable to methane (*13). In terms of its global warming potential, the EU reports that methane is approximately 30 times more powerful than carbon dioxide over a 100-year comparison period and about 84 times more powerful over a 20-year period (*14).

② Excessive Resource Consumption, such as Water and Land

The supply of high-quality water is essential for dairy production, but its sheer volume of use raises concerns. Water is used for individual animal consumption, milk cooling, equipment washing, animal thermoregulation, crop irrigation, value-added product manufacturing, manure handling, and barn cleaning (*15). A study by the University of California estimates that producing one liter of dairy milk requires 628 liters of water (*16). In some regions, the expansion of the dairy industry risks depleting local water resources. By comparison, producing the same quantity of soy milk requires only 27.8 liters of water, highlighting the extent to which dairy production contributes to water scarcity (*11).

Dairy production also presents challenges regarding land use. The rising demand for dairy products has led to nearly one billion hectares, or equivalent to 7% of the Earth’s surface, being utilized for feed production for dairy cattle (*12). This is primarily because both extensive and intensive farming methods require vast tracts of land. Intensive farming is criticized for its contribution to deforestation for the creation of arable land for feed production, a major factor in Amazon deforestation. Reports indicate that over 1,000 square kilometers (100,000 hectares) of Amazon rainforest have been cleared in Brazil, mostly for soybean cultivation used primarily as animal feed, a process significantly driven by dairy production (*17).

Changes in land use resulting from the expansion of dairy production are the largest driver of biodiversity loss. They also lead to the release of carbon, which has been stored in trees for years, back into the atmosphere (*12).

③Pollution and Eutrophication

Improper management of livestock manure in dairy production causes environmental impacts, including eutrophication, on surrounding soil and water quality. When manure is applied to the soil in small amounts, elements like nitrogen and phosphorus are accumulated in the soil at appropriate levels (*12). However, in areas where land availability is limited or animal stocking density is high, the appropriate spreading of manure becomes difficult. In such cases, manure may be handled improperly, for example through open-air stacking or disposal in unlined pits. These practices result in the contamination of soil, groundwater, and connected waterways with excessive amounts of nitrogen and phosphorus (*18).

While these elements are essential for maintaining ecosystems, an overabundance leads to mass proliferation of phytoplankton and algae that feed on them. This reduces light penetration into the water, resulting in a lack of photosynthesis, the subsequent death of aquatic plants and algae, a rapid drop in oxygen levels, and, ultimately, the death of organisms like fish, causing a severe impact on biodiversity (*12). In Europe, livestock farming is estimated to account for 23% to 47% of the nitrogen and 17% to 26% of the phosphorus transported from rivers to coastal waters. Accordingly, dairy milk production is one of the major contributors to eutrophication.

In summary, dairy milk production has a high environmental impact across multiple dimensions, including greenhouse gases, excessive resource use, pollution, and eutrophication. In contrast, plant-based milk, which has seen increased demand as a result, exhibits significantly superior performance in these areas. Nevertheless, differences in environmental impact arise among plant-based milks from different sources, and even within the same source, depending on the production location and methods. Below, we introduce the environmental features and issues of soy milk, almond milk, and oat milk, which constitute the majority of the global plant-based milk market.

Environmental Impact of Plant-Based Milk Production

Deforestation Concerns in Soymilk Production

Among all plant-based milks, soy milk has remarkably low water usage, while its performance regarding greenhouse gas emissions and eutrophication is considered average (*11). From a land usage perspective, however, soymilk raises concerns regarding deforestation. The expansion of pastures for beef production is the main driver of deforestation in the Brazilian Amazon. While the majority of soybean production in the region is used for animal feed and biofuel manufacturing, the production of soy products, including soy milk, nevertheless continues to contribute to deforestation (*19).

High Water Use in Almond Milk Production

Almond milk is considered to have a relatively low environmental impact in terms of greenhouse gas emissions, land use, and eutrophication (*11). However, while its water usage is lower than that of dairy milk, it is notably higher compared to other major plant-based milks. A particular concern is that over 80% of the world’s almonds are produced in California (*20). In recent years, as the state experiences severe droughts, consuming approximately 10% of the state’s agricultural water contributes to the depletion of water sources like groundwater.

Herbicide Use in Oat Milk Production

Oat milk’s environmental impact is generally considered low (*11). However, the use of pesticides during the cultivation of raw oats raises concerns (*21). A 2018 report by the Environmental Working Group, an environmental advocacy organization, found herbicide glyphosate in all tested oat-containing foods. This is because an herbicide called Roundup is applied to the oats before harvest. Glyphosate is said to cause biodiversity loss and potentially make ecosystems more vulnerable to pollution and climate change. By contrast, Oatly, the largest manufacturer of oat milk products, asserts that its suppliers do not use glyphosate.

The Role of LCA in the Plant-Based Dairy Alternatives Market

The environmental impact of plant-based milk is demonstrably lower than that of dairy milk across multiple dimensions, including greenhouse gases, resource use (water and land), pollution, and eutrophication. At the same time, there are differences and potential issues among plant-based milks depending on the ingredient type and production conditions. As the plant-based milk market continues to expand, consumers currently have limited information to judge the environmental impact of individual plant-based milk products.

Therefore, presenting the quantitative environmental information of a company’s plant-based milk products, while ensuring objectivity, can be an effective strategy. It visualizes the product’s differentiation from others and appeals to consumers who wish to contribute to solving environmental and food issues.

It is in this context that Life Cycle Assessment (LCA), which combines empirical and statistical data to quantitatively assess environmental impacts, has attracted increasing attention.

LCA is an environmental impact assessment methodology that covers a product’s entire life cycle, from ingredient procurement, production, manufacturing, processing, distribution, and sales, all the way to disposal. LCA works by modeling each stage of a product’s life cycle to estimate the resources required for production, as well as the quantities of waste and emissions generated throughout the process. Then, the environmental impact is calculated using indicators specific to LCA’s scope of influence. Through LCA, both businesses and consumers can conduct comprehensive comparisons between dairy milk and plant-based milk, as well as among different plant-based milks with one another.

The Future of Sustainability Branding to Consumers

Internationally, assessing the environmental impact across a product’s entire life cycle is becoming the core metric for evaluating food sustainability. Quantifying and presenting a product’s environmental impact from diverse perspectives in a more flexible manner contributes to promoting branding aligned with broad consumer interests. At the same time, challenges may include the substantial cost and time required to conduct an LCA, as well as the effective communication of complex data.

Our service, My-Eco-Ruler, supports companies by making their eco-initiatives “visible.” It evaluates and scores a product’s supply chain practices based on Life Cycle Assessment (LCA), delivering the information to consumers in an easy-to-understand format. By obtaining an LCA-based evaluation for their products, companies can understand their environmental positioning within the broader food market and communicate this to the market with objectivity.

A key feature of My-Eco-Ruler is that, in addition to European and American scoring methods, it is provided as a smartphone service for consumers. It incorporates a mechanism designed to enable consumers to adopt sustainable food consumption as a “habit,” promoting more continuous behavioral change.

As discussed earlier, one challenge in promoting sustainable consumption is the lack of clarity for consumers. Another challenge is the difficulty for businesses and producers to track whether consumers have chosen their product based on sustainability considerations.

Recently, we have increasingly heard from businesses and producers who are unsure if adopting sustainability-focused management will truly capture consumer interest. They struggle to determine the appropriate level of investment in sustainable product production and its communication. My-Eco-Ruler allows for tracking consumer selection based on the eco-scoring and communication of a company’s products. This makes it possible to more concretely calculate the return on investment for sustainable product production and communication.

For further information about My-Eco-Ruler, please contact “cuoncrop”.

cuoncrop ESG Global Trend Research Division

References

*1　https://www.euromonitor.com/article/trends-to-watch-in-plant-based-milk

*2　https://www.statista.com/forecasts/693055/dairy-alternatives-global-sales-value

*3　https://www.reuters.com/business/retail-consumer/danone-switch-dairy-factory-plant-based-alpro-diets-shift-2021-11-17/

*4　https://www.statista.com/forecasts/1293796/milk-substitute-japan-consumption

*5　https://www.asahi.com/articles/ASP3M5RLQP33OIPE019.html)

*6　https://toyokeizai.net/articles/-/429889?page=3

*7　https://prtimes.jp/main/html/rd/p/000000092.000062184.html

*8　https://www.danone.co.jp/news/20200403-2/

*9　https://stories.starbucks.co.jp/ja/stories/2022/0401/