$2.5 billion...
That's how much U.S. consumers spent on plant-based milk last year.
On top of that, they spent nearly $2 billion ($1.9 billion to be exact) on other plant-based dairy products, such as yogurt, creamers, and ice cream.
And here's the interesting part...
These plant-based dairy consumers are not all vegans. In fact, the majority of these consumers are omnivores.
So why are so many non-vegans consuming plant-based dairy products? Well, it's for a variety of reasons.
Some folks don't like to support those Big Ag conglomerates that treat cows like soulless widgets, shoving them into industrial feedlots where they're fed unhealthy diets and loads of antibiotics, and are forced to wallow in their own feces.
This, by the way, is the main reason I buy my milk and dairy products from my local farm, where the cows are treated well and the nutrition content of the milk is far superior to anything you'll find in your local grocery store.
Some people consume plant-based dairy because they're lactose intolerant.
According to the U.S. National Library of Medicine, about 30 million U.S. adults have some degree of lactose intolerance by age 20.
Then there's just the convenience of it.
When I'm on the road, I only consume plant-based milk because a) I don't trust regular milk from the grocery store, and b) it's super convenient. It's very easy to grab a box of oat milk or almond milk and a box of granola and just take it back to my hotel room.
Whatever the reason, though, the demand for plant-based dairy is very real and very profitable.
A few months ago, a company called Oatly (NASDAQ: OTLY) went public, pricing its shares at $17, giving it a $10 billion valuation.
To be honest, I thought that valuation was a bit high, and I maintain that I was right.
Still, the IPO garnered a lot of attention from very wealthy celebrities, CEOs, and asset managers. These include but are not limited to Oprah Winfrey, Starbucks founder Howard Schultz, billionaire rapper Jay-Z, and Blackstone Group. It's also worth noting that the company's largest shareholder is a joint venture between Verlinvest - a Belgian family office - and the Chinese government.
To provide some clarity on what Oatly actually does, it's a Swedish food company that makes oat-based milks, coffee drinks, yogurts, and ice cream.
Today, the stock trades at around $18.30. It was actually enjoying a nice upswing until a short seller came out and launched some accusations about the company lying about its sustainability efforts and accounting practices.
I don't know if any of that is true, and I rarely trust short sellers who promote their short attacks after they've already placed their bets. It's a sketchy practice, and one that should be met with skepticism.
That being said, I'd still be hesitant about buying Oatly at current levels. I just don't think it's worth what it's trading at right now. Of course, if you're looking to buy a plant-based dairy stock, there really are only two pure plays. Oatly is one, and the other is a Canadian player called Plant Veda (CSE: MILK).
Plant Veda isn't as big as Oatly, but it's got a solid lineup of products, which includes plant-based milks, creamers, and lassi, which is a yogurt drink with loads of healthy probiotics in it. Plant Veda's mango lassi is actually quite good, and I would even argue better than the real dairy version.
While Plant Veda is still relatively small, the company does enjoy a multi-channel revenue model and established distribution networks, which have been able to get the product on the shelves of Save-On-Foods, Nature's Fare Markets, and Whole Foods.
The company may not have caught the eye of wealthy celebrities and social influencers, but it's still worth watching. You can read more about Plant Veda here.