A recent market analysis by the food and beverage retail group into the plant-based milk sector highlighted that despite rising manufacturing and raw oat costs, oat milk remains the preferred dairy-free alternative for approximately 65% of vegan and lactose-intolerant households. The report revealed that consumers purchasing premium branded oat milk are paying an average of £1.20 more per litre compared to those buying supermarket own-label versions. A significant proportion of these consumers have consistently bought the same premium brand for years, demonstrating high brand insistence and habit-loop buying behaviour.
However, the competitive landscape is rapidly evolving due to agricultural diversification and shifting consumer health trends. Retailers have introduced aggressive price promotions on alternative grain milks, accelerating the consumer trial of potato, pea, and spelt-based milks. Additionally, high-quality, low-cost home milk-maker appliances and DIY oat-pressing kits are lowering the barrier for consumers to produce their own plant-based alternatives at home.
To encourage market competitiveness and assist consumer choices, the food standards agency and retailers have introduced several initiatives:
With reference to Extract A and your own knowledge, examine two possible reasons for the change in the price elasticity of demand for premium branded oat milk over time.
