Plant-based milk could be 10% cheaper than cow’s milk and become a staple product and ingredient by the end of 2030 if products meet taste and nutrition requirements, such as higher protein and micronutrients.
Meanwhile, alternative milk made with precision-fermented (animal-free) whey and casein proteins will become increasingly competitive as technical innovations improve and production processes scale up.
“The next decade will see rapid changes in the dairy sector”
These are among various estimates from the latest report by alternative protein consultancy Bright Green Partners. This report examines the opportunities the European dairy industry has to address a projected rise in production costs by investing in sustainable alternatives to traditional dairy products.
Floor Buitelaar, managing partner of Bright Green Partners, shared, “This report is a must-read for industry leaders who want to understand the future dairy landscape and make informed strategic decisions. The next decade will see rapid changes in the dairy sector. The time to act is now — leaders who embrace sustainability will steer the industry toward a brighter, more resilient future.”
Sustainability costs for the dairy industry
According to the report, EU milk production costs are expected to rise by 30% by 2040 as environmental scrutiny and the need to reduce carbon emissions lead to increased production costs.
The “true” cost of milk, accounting for environmental impact, could nearly double its current price. According to the study, the cost of goods sold (COGS) for cow’s milk will be higher in 2040 than for plant-based milk.
The current carbon footprint of producing a liter of oat and soy milk is approximately 30% lower than the most ambitious projected carbon footprint targets for making the same amount of cow’s milk in 2040. In addition, dairy cows require more water and land, causing higher eutrophication and environmental footprint. Meanwhile, precision fermentation production can reduce the footprint to 0.1kg CO2 eq/liter of alternative milk compared with plant-based milk.
The report points out that European plant-based milk consumption increased by 25% between 2020 and 2022, highlighting consumer interest.
Helen Breewood, Research and Resource Manager at the Good Food Institute (GFI) Europe, commented: “This report sets out the unique opportunities established dairy companies have to use their industry expertise and ready-made supply chains to position themselves as winners in the growing alternative dairy market.”
Innovating and investing before 2040
Based on these facts, the authors have identified two primary strategies for achieving sustainability in the dairy industry, looking at 2040: enhancing traditional dairy’s ecological performance and transitioning to animal-free alternatives. They emphasize the latter’s growing relevance as a viable solution to achieve sustainability, driven by expected regulatory changes and technological advancements.
The report also outlines that prioritizing sustainability is crucial for maintaining industry competitiveness. Already, a shift is coming as new market leaders emerge in the animal-free dairy sector. Moreover, according to the report, shifts in retail prices between animal-free and traditional dairy by 2040 will drive significant changes in consumer demand and purchasing patterns.
“There is huge potential for those companies who choose to innovate and invest now”
The authors recommend internalizing the environmental costs of milk production to make new strategic considerations. Meanwhile, they say strategic investments prioritizing sustainability are needed across the entire dairy value chain, and timely action is essential for maintaining a competitive edge.
Breewood added, “The dairy sector as we know it is set to be transformed over the coming years and plant-based milk and precision fermentation have a crucial role to play in complementing more sustainable dairy farming. There is huge potential for those companies who choose to innovate and invest now – while those who fail to act risk being left behind.”
The report, “2040 EU Sustainable Dairy Landscape: Corporate Transition in Traditional and Animal-Free Dairy,” can be downloaded here.
