Half-milk, half-nut drink? In a first, Minnesota dairy brand offers blended milks

The nation's largest cooperative of dairy farmers figures that if it can't beat plant-based milk competitors, it should join them.

A new Minnesota-based milk brand, Live Real Farms, blends cow's milk with plant-based milks, made from oats or almonds. Half gallons have been rolling into Twin Cities-area stores in recent days and they are priced around $4.50.

Live Real Farms is a sister brand to Kemps and even shares an office in St. Paul. Both are owned by Dairy Farmers of America, or DFA, the Kansas City, Kan.-based co-op that represents 8,000 family farmers.

DFA created Live Real Farms to introduce new products that still support its farmers. Per capita consumption of dairy milk has been in decline for decades while more and more people are trying milk alternatives.

"In general, dairy farmers know innovation is important for the category," said Rachel Kyllo, senior vice president of growth and innovation for Live Real Farms and Kemps. "Would they love that the half gallon just had milk in it? Probably. But they are excited that we are doing something really breakthrough."

Every carton is mixed with half lactose-free dairy milk and half almond milk or oat milk. Minnesota is the brand's launch market, available at Cub Foods, Kowalski's, Lunds & Byerlys, Coborn's, Super Walmart, Fresh Thyme, Festival Foods, Cash Wise, Super One and Jerry's. It will expand nationwide throughout next year.

Live Real Farms currently makes five varieties: original unsweetened almond, unsweetened vanilla almond, sweetened vanilla almond, chocolate almond and original unsweetened oat.

The almond products are manufactured in Richmond, Ind., and the oat product is made in St. Paul. Because the oat product is made here, Kyllo said, its ingredients come chiefly from Minnesota and Wisconsin dairy farmers. Typically, the company sources its milk from about a 100- to 150-mile radius of the plant.

In 2017, Americans drank 149 pounds of fluid milk per capita, down significantly from 247 pounds in 1975, according to the most recent data available from the U.S. Department of Agriculture.

Meanwhile, about 13% of the U.S. population consumes dairy alternatives, according to the NPD Group, a market research firm.

When that data is broken apart, it averages out to every American eating or drinking a dairy alternative about 21 times a year, a 12% increase since 2016.

"But here's the thing," said David Portalatin, vice president and food industry analyst with NPD, "they aren't exclusively consuming dairy alternatives."

A person who pours soy milk on their morning cereal might also sprinkle cow's cheese over their tacos for dinner. "So this response is reasonable when you consider this whole plant-based movement is going mainstream," he said.

Live Real Farms has been at the Minnesota State Fair this week, giving out free samples. The company hopes to convince consumers that this product offers them the naturally occurring calcium, protein and creaminess of dairy milk, plus the lighter texture and consistency of almond or oat milk.

"People seemed to love the fact that there was dairy in this product, but that it was lactose-free," Kyllo said after visiting with fairgoers.

As sales of plant-based milk alternatives have grown, so has the debate over what words should used to describe these products.

The dairy industry opposes using the term "milk" to describe beverages made from nuts, soy and oats, while the plant-based advocates argue consumers know the difference.

But declines in milk consumption began long before the rise of plant-based alternatives. One factor is that people are just drinking more water and less milk with their meals, Portalatin said. Another is that consumers just want to try something new.

"The American consumer loves to try new things, especially if they are things we are already familiar with," Portalatin said. That may seem contradictory, he said, but think about the No. 1 item ordered at U.S. restaurants: fries. There have been countless new types of fries, from nacho fries to truffle fries.

"There is just so much more innovation and so many more options in this category than there used to be," Kyllo said. "To get in that game and offer consumers who are looking for choice and something different is something our farmers understand."

Kristen Leigh Painter • 612-673-4767