Exploring the impact of plant-based milk alternatives in the US

Samara Mendez and Jacob Peacock
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Jacob Peacock: The Humane League Labs

No j89qm, OSF Preprints from Center for Open Science

Abstract: This project aims to evaluate the impact of the increasing availability of plant-based milk alternatives on demand for fluid dairy milk in the United States. We investigate this question by conducting three analyses: (1) gathering and comparing different sources of plant-based sales data to investigate data variability and to determine whether plant-based milk sales are sufficient to replace declining dairy sales, (2) summarizing research on the relationship between plant-based and dairy milks to determine whether the products are price substitutes for each other, and (3) estimating demand for whole and 2% dairy milk in separate periods between 2001-2019 and comparing one period's responsiveness to price fluctuations against the other period to determine whether dairy milk demand has undergone major changes that could have been caused by the expansion of plant-based milk products. Our results confirm that the volume plant-based milk consumed has increased over time, but not enough to fully explain the observed decline in dairy milk consumption. We find that dairy sales are relatively insensitive to changes in prices of plant-based milks while plant-based milk sales respond to changes in prices of lower-fat dairy milks more than higher-fat dairy milks. Unusual data patterns and estimation results suggest that the dairy demand model needs refinement before drawing confident conclusions, but our tentative findings indicate that whole and 2% dairy milk consumption is decreasing despite decreases in price and that consumer responsiveness may have changed in recent years. That said, the overall results suggest that we cannot confidently attribute all of this potential change in dairy milk demand to consumption of plant-based milk products.

Date: 2021-06-29
New Economics Papers: this item is included in nep-agr
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Working Paper: Exploring the impact of plant-based milk alternatives in the US (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:j89qm

DOI: 10.31219/osf.io/j89qm

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