Organic Dairy Overload Causes Corporations Turn to Plant-Based Milk for Profits

The other day, I was shopping at the supermarket with my husband. As we walked past a display of organic milk, I stopped me dead in my tracks. The milk was $7.99 a gallon, which might sound expensive if you live in the States. But I’m Canadian, and organic milk cost $9.99 a gallon back when our family bought it years ago. I was perplexed. What caused organic dairy prices to plummet 20% in two years? It’s now exactly the same price as the Silk organic soy milk that we buy (the soy milk used to be cheaper). So what’s going on? How did a premium product like organic dairy become so much less expensive?

Perhaps the prices at my local supermarket are part of a larger phenomenon. Last week, The Wall Street Journal reported things are getting rough for organic dairy farmers. Thanks to lower demand for dairy generally – and organic dairy in particular – farmers are becoming desperate, and prices are falling quickly. Some farmers have even confessed to culling their herds early in response to rapidly falling milk prices.

Corporations Lose Big on Organic Dairy

International dairy giant Danone has taken notice. Last Fall, CFO Cécile Cabanis noted “the premium dairy business continues to be pressured by the industry’s oversupply of organic milk…we continue to take steps to reduce our organic-milk supplies.”

Interestingly, while demand for organic dairy has fallen precipitously, plant-based milk is on the rise. Perhaps anticipating reduced demand for organic dairy products, Danone sold Stonyfield organic yogurt to Lactalis last year for $875 Million USD. Also in 2017, Danone completed their purchase of natural foods powerhouse White Wave Foods, which is the parent company of Silk.

Organic Dairy is a Money Pit

Dairy is an inherently costly industry. In order to produce milk, cows must be kept constantly pregnant. This has given rise to an entire industry to deal with the waste product: veal.

Moreover, infection is a constant concern, necessitating antibiotics – even for organic producers. And of course, as anyone can attest, dairy milk spoils quickly in spite of pasteurization.

And it’s Still Not Healthy

Organic consumers tend to be wealthier on average, and they are also more susceptible to information and trends. Increasingly, research indicates that dairy is both unnecessary, and likely unhealthy. Harvard School of Public Health, among others, has removed milk from their healthy eating plate. Canada’s new health guide is likely to remove dairy from their healthy eating recommendations as well.

Whether organic or not, dairy milk from animals contains cholesterol. And even healthy, organically raised cows get infections that lead to bacteria in their milk. Somatic cell counts (quantities of white blood cells) allowed in dairy vary, but it’s not particularly reassuring to know most animal milk is contaminated with bacteria and signs of infection before pasteurization.

Consumers are Leading the Way

When it comes to adopting plant-based milk alternatives, consumers are leading the way. Thanks to a growing body of information on the health and safety of dairy, many consumers are avoiding dairy, whether organic or conventional. The organic dairy industry has a long history of talking up their product, and implying that “organic” always means a healthier product.

Of course, most of this is greenwashing. As Health Canada argues, whether an animals grazes outdoors is far more significant to its health than whether their feed is organic or not. Nevertheless, as Theresa Marquez, the CEO of Organic Valley has pointed out, “milk is an emotional product.”

But perhaps not as emotional as organic dairy producers hope.

As savvy consumers learn more about where their milk comes from, they are moving away from organic dairy, and towards plant-based options. And why not? Plant milk is generally less expensive than organic dairy – even when it’s organic – and it’s often more nutritious. Bolthouse’s new Pea Protein milk has 50% more calcium than dairy milk, and 10 grams of protein per serving.

And if people aren’t willing to part with the flavour of dairy milk, companies like Perfect Day are working on using cellular agriculture to brew better milk: free from cholesterol, saturated fat, hormones and antibiotics.

Whatever option consumers ultimately choose, it’s clear the number of healthy, safe, compassionate and environmentally friendly animal-free choices will continue to grow.

What do you think? Join the conversation!

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