Why Transition?
The Dairy Trend.
The Plant Based Boom.
Farming is a chronically stressful occupation, and the pressure is taking a toll on farmers’ mental health. The prevalence of depressive symptoms among US farmers ranges from 6% to 35%, and the suicide rate is higher than the public. Dairy farmers in particular face isolating challenges – declining milk prices, tight profit margins, narrow processing contracts and regulations, climate change pressures, and low consumer demand. Farmers are pressured to “get big or get out.” These challenges force many small producers to close or consolidate with insurmountable debt. Between 2002 and 2019, the number of licensed dairy herds fell by more than half while the average herd size increased substantially. In early 2020, USDA reported that farms would lose money over the year, forecasting the median farm household income at -$1,840.
As factory farming expands and small to mid-sized farms close, profits are shuffled to corporations rather than farmers and local communities. Overproduction continues, and prices stay low, often lower than the cost of production. The challenges facing dairy farms also have a tremendous impact on our rural communities and economies – with equipment stores, local vets, seed suppliers, and more closing as well.
At the same time, the plant-based industry is experiencing rapid growth. Consumers are demonstrating an increasing appreciation of and demand for plant-based options. Plant-based grocery sales have grown 27% in the past year to reach a market valuation of $7 billion in 2020. Six out of ten US households buy plant-based foods. 78% of people who purchase plant-based foods are repeat buyers, with plant-based milk, meat, and cheese holding the highest repeat purchase rates.
Plant-based products are gaining increasing attention from younger generations and diverse consumer groups. 1/3 of the general population identifies as “flexitarian,” meaning that they eat a predominately vegetarian or plant-based diet and include animal products every so often. 63% of Millennials are trying to incorporate plant-based foods into their diet. Members of Gen-Z (people born between 1995-2007) are more aware of how food impacts health and wellness, with 65% saying they find plant-based foods appealing and 75% cutting down on meat consumption.
Interestingly, the emerging plant-based dairy and egg categories have experienced some of the greatest dollar sales growth. For the plant-based cheese category, now worth $270 million, dollar sales grew 42% in the past year and 70% over the past two years.
At Miyoko’s Creamery, we have been experiencing this growth in our own company. Our plant-based dairy products are currently available in 30,000 stores across the United States and throughout Canada, South Africa, Hong Kong, and Singapore. Our European Style Butter is the #1 selling plant-based butter in the natural grocery channel nationwide. In the past year, throughout the Covid-19 pandemic, Miyoko’s experienced 70% growth. We project similar progress in the next year.
Currently, most ingredients used in plant-based foods are sourced from outside the United States, including soy, yellow peas, chickpeas, wheat, and oats. Although some of these crops are grown domestically, most cropland in the US is used to grow livestock feed rather than food for humans.
This means that many American plant-based companies like Miyoko’s import ingredients for their products from abroad, rather than sourcing from US farmers. Not only does this create supply chain inefficiencies for companies, but it is also a missed opportunity for agriculture in the United States. We looked at our own supply chain and saw room for improvement, which is why we’re committed to this program.