SPINS Product Intelligence Attribute Spotlight: Non-Animal Dairy Protein

February 7, 2023
by SPINS Marketing

Key Takeaways

  1. NADP is an exact replica of dairy protein derived through precision fermentation
  2. It represents a continued shift of a macro-trend toward animal-free products
  3. Still early, but seeing promising signals & growth potential headed into 2023

In our first Product Intelligence Attribute Spotlight, we’re excited to highlight Non-Animal Dairy Protein (NADP), one of our 7 trends to watch in 2023. NADP is an exciting innovation in the Food & Beverage category. It represents a continuation of macro trends away from animal-based goods toward more sustainable, animal-free approaches to eating.

What is Non-Animal Dairy Protein?

First up, let’s talk about the basics around this ingredient attribute. NADP is fairly new to the market and it represents a highly disruptive innovation within both dairy and animal-free product segments.

NADP is created with precision fermentation – the practice of using synthetic “cell factories” to generate specific functional ingredients, like dairy! The output here is an exact replica of animal-derived dairy protein which results in products with the texture, taste, and overall experience of goods made with cow milk…just without the cow. As a result, shoppers enjoy the same products they’re used to without having to think through any concerns about animal welfare.

Worth noting that since NADP is an exact replica of animal-derived dairy proteins, per the FDA, it must still be recognized as a milk allergen!

Why It Matters

As we’ve alluded to, NADP is a new branch of existing macrotrends toward animal-free and climate-friendlier products.

So while this ingredient is still in the early stages of the innovation life cycle, the potential breadth and depth of its impact on shoppers, brands, and categories are highly significant. While we first saw this ingredient’s emergence in the frozen desserts category, it’s a highly versatile ingredient with the potential to disrupt categories ranging from protein supplements to chips and snacks to chocolate candy.

Opportunities to incorporate sustainable alternatives are highly sought after and tracking innovative ingredients like this early allows us to monitor not just their evolution, but also their white space potential.

With larger CPG brands now latching onto the ingredient, that disruptive presence is about to hit the market soon. Based on the data that we have now, we already see use in 35 products across 5 subcategories—ranging from cream cheese and protein supplements to ice cream and novelties—totaling up to approximately $3.5M in sales over a 52-week period.

It’s still a small corner of the marketplace, but one that we expect to grow over the next year as new brands and products hit the market.

As we look back at the sales trends from 7/2020 until 01/2023, we see a major spike in the summer of 2021 when there was a major national release using NADP which resulted in a surge of purchases culminating in nearly $2M in sales in a single month. Since then, we’ve seen lower sales, but also more stability with the period ending 1/1/2023 having a 36.9% growth compared to the same period in 2022.

Given this, we expect to see continued growth over the next couple of years as new products hit shelves in untapped categories, existing products see distribution gains, and as mainstream brands start to adopt NADP to capitalize on this exciting new innovation.