The U.S. milk campaign Got Milk is famous for featuring stars from Beyoncé to Beckham. But milk seems to be on its way out, as Western consumers are turning to plant-based alternatives. The fact that health and environmental damage are now linked to an animal-source diet is changing the minds of consumers. Meanwhile, China is planning to triple its milk consumption and is still advertising milk as a necessity for big and strong children. The white gold tells us the story of modernization and the globalization of diets, of developing countries moving up the food chaintowards animal-source food and of wealthier consumers developing a meaningful consumption lifestyle.

Our observations

  • Dairy is an important staple source and an increasing part of our global diets, as societies are undergoing a nutrition transition towards a diet with more animal-source food. Since dairy contains many nutrients, minerals and vitamins, the FAO considers it an important aspect of a diverse diet.
  • The global dairy market is worth more than $400bn, produced by more than 274 million cows. According to the OECDFAO Agricultural Outlook 20182027 on dairy, the European Union, New Zealand, Australia and Argentina are among the largest exporters and China is the largest importer of milk products. World milk production is expected to increase by 22% from 2018 to 2027, compared to the 2015-17 period, with a large share of the increase coming from Pakistan and India. In 2027, these two countries are expected to jointly account for 32% of global milk production. But although India has a large expanding domestic market, the country is not projected to become an important player on the international market.
  • China is now the world’s third largest dairy producer and has plans to triple consumption. Chinese dairy industry players have ambitions to become global leaders and Yili, a Chinese dairy giant, has initiated a Belt and Road dairy alliance, a new China-led milk road across the continents.
  • Milk is polluting. Livestock currently accounts for about 14.5% of the world’s total greenhouse gas emissions, and 1 liter of milk accounts for 1kg of CO2. China already imports 60% of the total volume of soybeans traded worldwide in order to make the high-protein feed it needs.
  • Globally, the industry of milk-alternatives, such as plant-based milk, is estimated to have been worth $16billion in 2018. Some plant-based alternatives have become a real hype in Western cities; when New York recently ran out of the oat milk brand Oatly, prices went up to $25 per liter. In 2008, the main milk alternative was soy, but today start-ups are successfully milking the hypes around other alternatives made from almond, hazelnut, cashew, coconut, hemp, spelt, quinoa, pea, etc. This can be understood as a shift towards meaningful consumption. The alternatives are now spreading to non-Western markets. 90% of Asian consumers are lactose-intolerant. In China, plant-based, lactose-free alternatives are on the rise.

Connecting the dots

Historically, milk was restricted to local consumption. A variety of dairy products are indigenous to different cultures, such as in India. But milk used to be hard to transport and keep fresh and often carried bacteria and diseases. Modernity changed this. Urbanization, industrialization, and scientific and technological progress made it possible to scale milk production and produce dairy products with a longer shelf-life. Expanding railway networks in the 19th century led to a revolution in milk production and supply. It kicked off the globalization of the dairy industry. However, aside from reflecting progress, convenience and efficiency, milk also represents the other face of modernity: the globalization of dairy led to environmental damage, to the loss of traditions (such as traditional, local dishes) and eventually to a global glut of milk in 2016.
As populations modernize and climb the socio-economic ladder, a shift in diet takes place, referred to as nutrition transition, that is also reflected in increased milk consumption. This nutrition transition entails moving up the food chain, away from diets largely based on locally grown grains and vegetable staples to ones with more processed foods and an increased animal-source food intake, and thus an increase in dairy products. This nutrition transition has been the main driver behind modern diseases such as obesity. Two phases of this nutrition transition are currently underway in the world and strikingly represented by two regions.
Today in China, milk is still an essential symbol of modern progress. In the five-year plan of the 13th Communist Party of China, shifting from small-scale herds to larger industrial factory farms to keep its population of 1.4 billion in milk is among the top priorities. The official dietary guidelines recommend that people eat triple the amount of dairy foods that they currently consume (that would still only be a third of the dairy the average European consumes). As we wrote before, the Chinese regime is deemed responsible for providing enough food for its population. If eating meat and drinking milk used to be an occasional luxury and the party accomplishes in making it more available to all, this is a sign of success and reinforces the legitimacy of the Party, making milk a tool for propaganda. Also, the Great Famine is still in the collective memory of the Chinese people and milk is considered a nutritious staple food. More than being a sign of wealth and a source of essential nutrients, milk has a modern and Western appeal to the Chinese. 

The belief that Westerners are taller and stronger because they eat more meat and dairy is wide-spread, driven by state-sponsored advertising for domestic dairy products. To increase milk consumption, the state pushed for the modernization of farms and also started to raise new generations of milk drinkers by advising parents to give their children milk to make them lactose tolerant. Over the last decades, the Chinese diet has been transformed with extraordinary speed and the country is already the world’s third largest milk producer. The relatively new milk habit and ever-growing demand come with the problems that the next phase of the nutrition transition is known for: overweight and environmental concerns. China simultaneously has to deal with undernutrition and overnutrition. And tripling the nation’s consumption would have a huge environmental cost.
In Western countries, large volumes of dairy are no longer a sign of progress but of a broken modern food system. Continued improvements in the efficiency of milk meant that countries went from heavily subsidizing dairy production to being stuck with oversupply. Milk lakes and butter mountains are a persistent problem to the EU. Milk’s reputation has also suffered, as consumers are aware of the health issues related to diets rich in animal-produce and of the environmental damage they cause. Scandals in factory farming and the monopoly of big agriculture have pushed them to look for alternatives. Where dairy used to be propagated as a force for good, freely available with school meals, and part of every diet, this is no longer the trend. Different plant-based milk alternatives continue to grow tremendously in popularity, while dairy farmers are seeing a significant decrease in demand.
The Western dairy-situation of overconsumption is by no means the logical next step in China’s path. Already, scaling production is no longer the only priority, due to the negative impact on water-supply and the large amount of soy that has to be imported for livestock feed. In China’s Go Out food strategy, milk can increasingly come from overseas. And as Western consumers are setting the trend of meaningful consumption of milk and meat alternatives, this might soon find a way to developing countries. If might even lead to renewed popularity of traditional beverages and dishes with soy milk among young Chinese consumers.

Implications

  • The FAO predicts that the dairy industry might be impacted by environmental legislation in future and lists the Netherlands, Germany, Denmark, France and Italy as countries where environmental concerns might drive these policies. This can be seen as a sign of a broader trend of awareness on the environmental damage pushing for change in the food chain. Taxing meat and improving traceability to counter food losses are among other measures we can expect.

  • Milk alternatives can be seen as a substitute to an old habit that we all had for years, e.g. drinking a glass of milk a day. Alternatives might help us bridge the period after. But that would mean they will not remain an essential part of our future diet per se. For instance, cultured meat now looks exactly like the hamburgers we like to eat, but a generation growing up without knowing what that original hamburger looked like might not be tempted by a fake burger anymore.  

  • Although alternatives to milk are on the rise, 90% of consumers that buy plant-based milk still consume other dairy products, such as cheese and ice cream, the demand for which is still growing. However, consumer awareness about the environmental costs of other dairy products such as cheese is also increasing.