Milk, the kind from cows, is still Americans' favorite complement to a peanut-butter-and-jelly sandwich. But cows milk is feeling the heat from other "milks," such as from almonds.
"You can't get milk from an almond," said Chris Galen, a spokesman for the National Milk Producers Federation. "You have to add a lot of other ingredients to make it look like milk."
Galen's correct, of course, as anyone who's ever attempted to milk an almond can attest.
Almond milk usually contains only 2 percent almonds, with a lot of water, vitamins and gelling agents mixed in. But the numbers don't lie. U.S. sales of almond milk rose 4.2 percent last year to within sniffing distance of $1 billion, according to researcher IRI's data.
At the same time, while Americans are drinking more organic and full-fat cow's milk, sales of low-fat varieties are plunging, with skim milk consumption down 13 percent from a year ago, according to the U.S. Department of Agriculture's June data.
But the real blow to dairy is the widespread replacement of cows with almonds.
California is tops in the U.S. for dairy production -- about one-third more than No. 2 Wisconsin -- and almonds -- 80 percent of global output. Land in the state devoted to almond groves has been steadily increasing, with 350,000 acres added over the past decade, enough to double the crop to more than 2 billion pounds, according to Rabobank International.
The state lost about 10,000 milk cows this year through July, a 0.6 percent drop from 2015.
California's new higher minimum wage is crimping profit margins at labor-intensive dairies more than at the almond groves, and mandatory water restrictions in the fertile Central Valley amid a years long drought have pushed almond cultivation to places it's been rare before -- such as dairy farms.
In Bakersfield, Calif., Olam Farming Inc., part of Singapore-based Olam International, recently bought George Borba & Son's 1,550-acre dairy, and 8,000 cows were auctioned off to make way for growing more almonds and pistachios.
Richard Wagner, whose father started the family dairy in Escalon, Calif., also has almond trees, and is putting in about 300 acres more this year. He's using land previously used to grow alfalfa and corn for feeding cows.
"Back in the 1950s, there were no almond trees in our area," he said. "Now there are almond trees everywhere. The economics for the trees has been very good. Dairymen have a decision."
Chances are, pressure for weaker California dairies to sell out to nut producers will continue over the next five years, and those who don't sell will be installing groves, said Vernon Crowder, a Fresno, Calif.-based senior vice president at Rabobank International.
Asian countries import almonds in the shell. In the U.S., half of the almonds sold are shaved into everything from ice cream to salads and tucked into energy bars. The other half of the market consists of whole-nut snacks. And snacking on nuts is increasing, according to Chicago-based research firm Technomic.
Almond milk is boosting the nut's popularity, too. Last year, Americans bought $890 million worth of almond milk, three times the amount of soy milk's $286 million, according to IRI. By contrast, consumers bought $9.2 billion of low-fat and skim milk. Retailers have caught on to the trend. Starbucks Corp. is adding almond milk to its lineup of non-milk alternatives, which already includes coconut and soy milk. And as of last month, Dunkin' Donuts offers it in all of its stores.
Milk alternatives have faced scrutiny for not containing many nuts or natural ingredients. WhiteWave Foods Co.'s Silk brand of almond milk, for example, also contains sugar, salt, gellan gum and sunflower lecithin.
A lawsuit filed last year against Blue Diamond Growers, which supplies Dunkin' Donuts, said its almond milk contained just 2 percent almonds. Blue Diamond's U.K. website confirms the product's almond content. Water and sugar are listed as ingredients before almonds. Alicia Rockwell, a company spokesman, declined to comment.
Among the biggest almond-milk sellers are WhiteWave and Blue Diamond, along with retailers like Target Corp. and Aldi Inc. that have private-label brands. Niche companies are also riding the wave, like NuMoo Nut-Milks, which makes an organic, cold-milled chocolate almond milk.
The National Milk Producers Federation has been trying to get federal regulators to enforce laws on the books that say the word "milk" is reserved for lactation from mammals. But they're losing that battle, too, as almond milk gets turned into other imitation dairy products, like cheese and yogurt.
The cow's-milk industry has turned to Olympic heroes to lead the battle against plant-based drinks. In Milk Life's newest ad campaign, Olympians including rugby star Perry Baker and swimmer Elizabeth Beisel tout milk's nutritional oomph, while cyclist Kristin Armstrong says milk "made me a stronger athlete."
They're up against Silk-brand drinks that use Venus Williams and DJ Khaled as their #DoPlants spokesmen.
"The almond has become ubiquitous," said Richard Waycott, chief executive officer of the Modesto-based Almond Board of California, which represents 6,800 growers. "The demand for almonds has risen virtually in every market we serve."
Information for this article was contributed by Michael B. Marois and Andrew Harris of Bloomberg News.
SundayMonday Business on 09/18/2016