It’s easy to typecast the Dunkin’ customer as a blue-collar, regular joe, who cares about basic coffee and donuts. It’s especially easy when comparing Dunkin’ to Starbucks. But, Dunkin’ has consistently shown its willingness to shake up the menu and give customers a chance to sample healthier alternatives. Consider the veggie egg-white flatbread, or the Beyond Meat sausage, or the multigrain oatmeal. Now, consider oatmilk. It’s the latest craze in cow milk alternatives. “Wow, No Cow!” is how one company brands its vegan milk product.
Sensing a crowd-pleaser, Dunkin’ and Starbucks began testing oat milk at select locations – Starbucks in the Midwest and Dunkin’ on the West Coast – at the beginning of 2020. But, when COVID struck, and Starbucks scaled back operations, Dunkin’ won the race for a nationwide rollout with its announcement this summer that oatmilk was now available system-wide. That left Starbuck’s customers with a hankering to try oatmilk with their favorite beverage little choice but to try Dunkin’. Experts say the move showed Dunkin’s commitment to serving vegan and lactose intolerant customers.
“Introducing oatmilk was a fairly aggressive move on Dunkin’s part to get the customer who wants to use alternative milk in coffee beverages, and the fact that they beat Starbucks to the punch is particularly notable as that sort of thing is Starbuck’s game,” says Restaurant Business editor-in-chief Jonathan Maze, a longtime industry journalist who writes about quick-service restaurants.
Matt Cobo, a California franchisee with Dunkin’ stores in Walnut Creek and Concord, says that oatmilk helped bring in a different kind of customer. “Oatmilk helped attract the Starbucks customer who wants what’s fresh and new, and oatmilk fits nicely into that. Oatmilk adds relevance and the perception of relevance,” he says, adding oatmilk is a big part of his sales mix. “More so than I expected,” with customers coming in just for the oatmilk. “If we didn’t offer it, they’d go somewhere else,” he says. “It might be just the West Coast market that has the oatmilk mentality, but a lot of folks out here don’t do dairy.”
Oatmilk has been around since the 1990s when researchers at the Swedish Lund University came up with a production process and enzyme technology that allowed oats to be transformed into a creamy milk alternative. They created Oatly, which is among the top oatmilk brands in the world.
With consumer awareness and the popularity of vegan diets growing, the oatmilk market is hot. Global Market Insights says revenue for oatmilk will hit $490 million by 2026. “Oatmilk sales are exploding due to a confluence of trends: Sales of soy milk have lagged for years. Almond milk, while still the leading non-dairy milk alternative, is experiencing a backlash due to environmental concerns about the harvesting of almonds depleting a major water supply in California,” writes Ad Age Magazine. What’s more, Nielsen research data found oatmilk was one of the most popular items consumers were stockpiling during the early days of the pandemic—with sales spiking 300 percent in the week ending February 22—largely due to its long shelf life.
Lorie Anderson, a Los Angeles based blogger, is a typical oatmilk aficionado—she started drinking it because of her son’s allergies to dairy, but then realized she liked oatmilk better than the alternatives. “It’s creamier than almond milk and it doesn’t have all of the nasty stuff that comes along with animal milk,” says Anderson, who even started visiting a new coffee shop because it offered oatmilk.
“The combination of neutral taste and creamy consistency was one of the reasons for oatmilk’s rapid rise in popularity,” says Elizabeth Lockwood of The Sound, a global insights and branding agency. She believes it quickly became a favorite of many coffee baristas – and a go-to recommendation – once they realized how well it blends into the perfect latte or iced coffee.
“Oatmilk steams and froths as well as dairy milk and doesn’t have a sweet or overpowering flavor like other nut milks and soy. And it doesn’t have a bitter aftertaste and therefore incur additives and flavorings,” she says.
Dunkin’ chose to partner with Massachusetts-based Planet Oat, made by HP Hood. According to the press release announcing the Planet Oat partnership, “Planet Oat Oatmilk is a delicious, high-quality plant-based dairy alternative that starts with oats and water, which is then blended with vitamins, minerals, and other ingredients for a creamy texture and light sweetness.”
Coffee companies that use unconventional ingredients, flavors and brewing methods are the ones capturing market share, according to the Kerry Group, a global leader in taste and nutrition serving the food and beverage industry. Their research found, as competition expands, coffee companies face pressure to stay ahead of the innovation curve, something that often requires bridging the gap between “artisan” and “commercial.”
For Cobo, oatmilk has fit easily into his California Dunkin’ shops. “We’ve had no problems with storage, no product shelf life issues, no spoilage or over ordering. It’s easy to manage,” he says, adding oatmilk needs no introduction for customers or employees. “‘Oh good, we’re carrying oatmilk,’ was the reaction,” says Cobo. “The crew drinks it all the time.”
Indeed, surveys show that most consumers aren’t confused by the basic differences between plant-based milks and cow milk. A study by the International Food Information Council (IFIC) found about three-quarters of consumers know that plant-based “milk” doesn’t contain cow milk and understand the distinction between nut and grain-based milk and dairy milk.
Dunkin’ first boarded the plant-based milk bandwagon in 2008, when it began offering soy milk as a dairy alternative. In 2014, the company partnered with Almond Breeze, adding vanilla almond milk to the menu. Now, it is the oats that Dunkin’ hopes will sew up sales. Industry watchers say customers want a choice of vegan alternatives.
“From a logistics, storage, waste minimization standpoint, there may be other considerations that lean toward keeping the level of menu choices at a minimum, but from a consumer perspective, these different types of milk alternatives have a distinct taste and therefore there isn’t an inherent interchangeability between them, so they can both legitimately reside next to each other on the menu,” says Lockwood of The Sound agency.
While oatmilk is getting significant publicity these days (owing largely to its pandemic popularity), Cobo doesn’t view it as a new phenomenon. Oatmilk has been sold commercially in the U.S. for over 20 years. There was even a famous oat milk shortage in 2018, when demand outstripped supply and retail prices jumped. People were spending $200 or more for a case of oatmilk. At the time of the shortage, Jess Perez of JP Consulting, an oatmilk devotee who does brand consulting and marketing strategy, said she bought 20 cases of oatmilk at Target. “I am obsessed with non-dairy milks, especially oat,” she said, describing oatmilk as perfect for coffee. “Creamier to the point where you can avoid adding sugars, versus almond milk, which can be watery and have a grassy aftertaste.”
Oatmilk is higher in calories than almond milk, cashew milk or soy milk. And, even though most brands don’t add sugar, the production process to break down oat starch creates high glycemic maltose sugar, giving a glass of oat milk a similar glycemic load as a can of Coca Cola.
So, is oatmilk a lasting trend or flash in the pan? With consumers—particularly millennials—increasingly saying they want brands that embrace purpose and sustainability, oatmilk is likely to stick around, according to Maze of Restaurant Business. Many green-conscious customers choose oatmilk as being eco-friendlier as it requires less water usage to grow oats and there is less average land needed for oatmilk than for dairy or almond milk. Oatmilk has built a legion of loyal fans who love its flavor, consistency and eco-profiles. Aficionados, like Karen Aronian of North Salem, NY, are finding even more uses for the loveable liquid. “I use it not just for coffee, but also for baking, chia pudding, and even in my bath,” she says.