The Land of (animal-free) Milk and Honey
The rise of cow-free milk, and Israel's presence in the emerging field
The dairy alternatives market, an estimated value of $22.6B as of 2020, is projected to reach $40.6B by 2026. This valuation stems from 75% of the world's adult population being lactose intolerant and consumers becoming more health conscious. Made of almonds, rice, hemp, soy, oats, coconut, etc., dairy alternatives have traditionally been considered healthy products. Aside from being lactose-free, they typically have lower fat content and low cholesterol compared to cow's milk.
The map below documents the crowded market for alternative dairy.
Why are companies competing in this space? Traditional cow's milk is unsustainable, more environmentally damaging than dairy alternatives and requires a lot of water and land.
Given that there are approximately 270 million dairy cows worldwide, milk production has a large environmental impact, the scale of impact depending on the existence and practices at dairy farms.
Dairy cows produce greenhouse gas emissions, poor treatment of fertilizers and manure leads to degradation of water sources, and feed production contributes to loss of lands like forests, wetlands, and prairies. In 2017, U.S. cow’s milk consumption was 49 billion pounds, but production was 215 billion pounds. At the same time, the U.S. milk consumption has dropped 40% since 1975 and this trend is accelerating as consumers reach for oat, almond, and soy milk.
The Department of Agriculture reported a decline of 20,000 dairy farms, a decline of 30%, in the past decade.
However, cow's milk is still the most cost-effective solution. Almond and soy milk drive the plant-based milk market, but they come with a steep price tag over regular milk. Almond and soy milk cost almost double the price for regular milk, and oat milk is nearly two and a half times the cost of dairy milk, according to a price check by FreshDirect.
Additionally, aside from allergies or potential antibiotic contamination, cow's milk has many benefits that not all alternatives fully replicate. Cow's milk is very rich in branched chain amino acids, it is a source of calcium, B12 and B2. And simply, some people just love the taste and texture of traditional milk.
In Israel, Planterra challenges the plant-based milk industry with its innovative use of chickpea protein isolate, crafting exceptional taste, texture and nutrition by the spoonful. Chickpea isolate rivals other well-known dairy substitutes like soy, almond, and oat, as it does not contain common allergens. Additionally, chickpea is rich in unsaturated fatty acids and provides a great source of vitamins.
So far, the company has developed the CHKP line of plant based yogurt, cream cheese and is working on milk, creamer, and pudding.
Plant and Animal-Free Dairy?
The 2020 market size value for dairy products was $490 billion, projected to reach $586 billion by 2027. In Israel, alternative milk has the same market share of milk substitutes in the U.S., accounting for 13% of the milk market (1.9B NIS). Recent technological advancements have pushed for an alternative dairy landscape of lab-developed milk.
Perfect Day, founded in 2014 in the U.S., developed microflora via fermentation that produces milk proteins, casein and whey found in cow's milk. As a result, the company produces a vegan milk that replicates the taste and nutrition of traditional milk. More companies are emerging in this space, such as German startup LegenDairy, founded in 2019.
The road to Animal-Free Dairy in Israel
This emerging sector of animal-free milk has a bright future, and Israel is no stranger to this field. Startups Remilk and Imaginary are among the trendsetters in the nation with their innovative technology.
Remilk, founded in 2019 by Aviv Wolff and Ori Cohavi, is creating real milk, without the cow. Using microbial fermentation, Remilk is reproducing milk proteins that is identical to cow's milk, minus the cholesterol, lactose, hormones and antibiotics. Additionally, it requires only 10% of the water required to produce comparable products, and produces 1% of the waste compared to typical dairy farms. They have completed a Series A round, raising $11.3 million.
Imagindairy, founded in 2020 by Eyal Afergan and Professor Tamir Tuller, is creating animal-free protein-based dairy products via AI technology and system biology to increase the expression of milk proteins in microflora. Using yeast genome to create an identical structure to cow's milk, the key here mimicking real dairy in order to replace it, not substitute. At Tel Aviv University, Professor Tamir Tuller, used techniques to model and engineer gene expression via biophysical simulations, computational modeling of molecular evolution and machine learning. This technology has been used to produce vaccines, antibodies, biosensors, and is now being used for cow's milk, and will rival competitors like Perfect Day, with its cheaper production cost.
In summary, both traditional cow's milk and the alternative dairy sector have a new competitor on the horizon. Creating animal-free milk means consumers' desire for the taste and nutritional value of real milk can be met without the allergies or harm of the environment and animals.