Is Dug Potato Milk the Next Big Plant-Based Food Brand?

“Boil ‘em, mash ‘em, stick ‘em in a stew,” hobbit Sam says to the monstrous Gollum in the movie The Lord of the Rings: The Two Towers, to explain the versatility of potatoes. If that scene had been filmed in 2022, he’d be able to add: Turn them into milk. Potato milk is one of the most anticipated new products in the plant-based food category this year, according to analysts. “Now it is the turn of the potato,” proclaimed British retailer Waitrose in its annual food and drink report when it announced it would begin selling Swedish potato milk brand Dug in February. This follows a trend that has seen more consumers embrace plant-based food, including alternative milks such as oat, soy, almond, coconut and so on. Despite the anticipation, the product faces one key marketing challenge: potatoes and milk don’t exactly go together in the minds of many consumers. “When people are in the market for alternatives [to dairy], they’re not usually looking at potatoes,” said Josh Tilley, strategy director at London creative agency Initials, which works with Dug. Dug is entering the market at an interesting moment for the plant-based food category, which has matured in recent years and is predicted to grow even more in 2022. In a crowded marketplace, it is leaning into its unusual proposition to stand out and build a brand to rival its competitors. Why Potato Milk? Dug is owned by Swedish start-up Veg of Lund, which is based in Malmö, the same city where another alternative milk, oat drink Oatly, is from. Lund University Professor Eva Tornberg, who has a focus on sustainability and food tech products, created Dug’s formula through a patented method of blending and emulsifying potatoes and rapeseed oil. Dug will initially be sold in Sweden and the U.K. but has long-term plans to expand internationally, including to North America. In the U.K., where it is produced, it will be available in Waitrose stores, online retailers including Ocado and Amazon, as well as some coffee shops. It comes in three varieties: original, barista and unsweetened. Those basic facts aside, the question remains: why would anyone choose potato milk over other plant milks? To answer that, Dug is focusing its marketing on three differentiating factors: its allergen-friendly profile, sustainability and taste. On the first point, potato milk is free of common allergens such as nuts, dairy and gluten. Potatoes are also rich in antioxidants and have a low glycemic load, according to a section on Dug’s website called “Potato Power.” But the root vegetable’s biggest superpower, according to the brand, is its sustainability. “One hectare can yield over a quarter of a million portions of food, with a very low carbon footprint,” Dug’s website reads. You either duck that [strangeness] or make it a strength... There's no point doing this shyly.Josh Tilley, Initials Dug claims that potato milk is one of the most sustainable plant-based milks, with twice as much land efficiency as oats and using 56 times less water than almond milk. Amid the climate emergency, as more brands tout their sustainability creds, this message will be a key part of Dug’s marketing strategy, said U.K. marketing manager Rachel Redman. A Daring Proposition But to win over consumers, those first two credentials won’t matter as much if the third factor—taste—falls short, Redman said. “In our hierarchy of messaging, taste comes at the top. Taste is often a barrier to entry into the [plant milk] category,” she explained. “Potatoes have a neutral taste, so the product doesn’t overpower anything it’s mixed with.” Dug potato milk is best experienced in coffee drinks, she says, but can also be poured over cereal or used in cooking and baking. Tilley added: “Unless you tell people it tastes really good and you deliver on that, people aren’t going to buy into a sustainable product if it’s dreadful. While sustainability is important, the fact that Dug tastes good is the killer aspect for us.” This consideration is at the heart of Dug’s new brand platform, “Dare to Dug.” Initials helped Dug develop its positioning and creative identity at the end of last year, and the brand will run an outdoor ad campaign in the U.K. with this tagline to coincide with its launch in Waitrose in February. The graphic typography, photography and copy are all designed to challenge audience’s perceptions and encourage them to make an unexpected choice with potato milk. Dug potato milk comes in three varieties and is best experienced in coffee, according to the brand Dug isn’t trying to skirt around the fact that its product may sound strange. “You either duck that or make it a strength, and we decided on the latter,” Tilley said. “We’ve always been aware that the market is getting increasingly crowded, so when we created a platform and brand, we needed something that lent into it. There’s no point doing this shyly.” Redman added: “The slogan is a call to action, daring people to try Dug. We understand that it’s a new concept to put potatoes in coffee or cereal. We need to overcome that barrier and stop people in their tracks. We know that once they’ve tried it, they’ll be pleasantly surprised.” Not Another Oatly In terms of building a big brand with an alternative—and possibly strange sounding–milk, there is a strong precedent: Oatly. The company has similar Swedish roots to Dug, but when it started in the 1990s, it was sold mostly in health food stores, with staid packaging and advertising to match. Over the past decade, however, with new leadership and an in-house creative team, Oatly has transformed itself and grown the brand with a more creative and provocative marketing strategy. Oatly is now known for its unusual marketing tactics: just in the past year, for example, it launched an animated puppet show, created what it called the “meta-est campaign ever” and ran a low-budget Super Bowl ad featuring CEO Tony Petersson singing an annoying jingle, with accompanying T-shirts that read “I Totally Hated That Oatly Commercial.” Getting weird has paid off for Oatly, so some might expect Dug to go down a similar route. Not so, said Tilley. “We’ve got no intention of becoming another Oatly,” he said. “Our tone is different. Being provocative is not something we’re playing in.” Oatly had to be provocative to capture attention, Tilley said, because when it was founded, there was barely a market for plant-based food. That has since changed significantly: “[Dug] being stocked more quickly in mainstream retailers reflects how the market has matured. It’s a different environment.” In recent years the plant-based food category has exploded, helped in part by environmental concerns as well as many consumers becoming more health conscious during the pandemic. In the U.S. alone, 71% of adults reported trying at least one plant-based product in 2021, according to Dataessential. Sales of faux meat and poultry are projected to reach $2 billion by 2024, according to a study from Packaged Fact, and the more-established alternative dairy category is pegged to top $5.2 billion in the next two years. Meanwhile, in Dug’s key market of the U.K., plant-based food consumption nearly doubled from 2008 to 2019, according to findings in the journal Science of the Total Environment. The largest increases were among young people—one of Dug’s key target audiences. We need to stop people in their tracks. We know that once they've tried it, they'll be pleasantly surprised.Rachel Redman, Dug A far cry from when Oatly launched, Dug is entering a competitive and crowded marketplace. But it has no wish to do so combatively, a tactic Oatly employed when it tackled the dairy industry head on. After being taken to court by Sweden’s dairy lobby, Oatly developed its controversial 2018 campaign, “It’s like milk, but made for humans.” As the category’s sales growth shows, switching to a plant-based diet no longer seems such a rogue or bold choice these days. Against that backdrop, Dug plans to take a softer, more inclusive approach to convince consumers to try potato milk. “As a brand we don’t have a desire to be offensive to dairy. At the end of the day, we respect everyone’s decisions to either continue to drink dairy or have it on occasion,” Redman said. “We’re not trying to force anybody’s hand or beat them over the head with a stick. We want people to come along on this journey with us.” As 71% of Americans Dabble in Plant-Based, 2022 Will Be a High-Stakes Brand Battleground

Plant-Based Products

Turns the Milk Potato'y: Is Dug the Next Big Plant-Based Food Brand?

Potato milk is one of the most anticipated launches in the category this year, but it faces a crucial marketing challenge

Brittaney Kiefer

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Brittaney Kiefer