Starbucks Turns to Coconuts as Non-Dairy Demand Soars

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This story originally appeared on Reuters

Corp said on Wednesday that its 12,123 U.S. shops would begin offering coconut on Feb. 17, as it seeks to keep pace with soaring demand for non-dairy and non-soy milk alternatives.

Starbucks began offering soy milk in 1997. Consumer tastes have since evolved, driving strong demand for other non-dairy alternatives made from products such as coconuts, hemp, rice, almonds and other nuts.

The move from the world's biggest chain also comes as smaller rivals such as Peet's Coffee and Coffee Bean & Tea Leaf also offer non-soy dairy milk alternatives.

Starbucks declined to name its coconut milk supplier.

As it does with soy milk, Starbucks will add a 60 cent charge to made with coconut milk.

U.S. retail sales of non-dairy, non-soy milk alternatives are expected to nearly double to almost $2.4 billion by 2019, according to research firm Euromonitor International. Those gains appear to be coming at the expense of cow and soy milk.

Euromonitor expects U.S. dairy milk sales, which were $14.7 billion in 2014, to fall about 11 percent to around $13.2 billion by 2019.

Soy milk sales, which hit $577 million last year, are expected to drop 30 percent from that level in 2019, according to Euromonitor.

(Reporting by Lisa Baertlein in Los Angeles. Editing by Andre Grenon)

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