American per-capita dairy milk consumption was estimated to have fallen 40% since 1970, according to one study. The increasing consumer belief in the health benefits of plant-based milk substitutes and the rise of organic food consumption and vegetarianism in the U.S. are the major reasons behind this drop.

Among milk-substitute manufacturers, WhiteWave Foods (NYSE:WWAV) and Hain Celestial (NASDAQ:HAIN) appear to have a better handle on this shift, which has had a significant market impact. Consumers were estimated to have spent $1.33 billion in 2011 for purchases of plant-derived milk alternatives, such as soy milk, rice milk, and almond milk. This amount is projected to hit the $1.7 billion mark by 2016, according to a recent study

Sales smooth as silk
The 2013 third quarter results of WhiteWave Foods further illustrate the rising consumer acceptance of non-dairy milk products. Sales of its almond milk, marketed under the Silk brand, grew by over 60% to propel gains in its plant-based food and beverage products.

Total sales for this segment, which includes Silk soymilk and coconut milk, rose 14% during the quarter. Achieving volume increases in both its North American and European markets, WhiteWave grew its aggregate revenue by 10% to $639 million, and its adjusted diluted earnings per share by 21% to $0.19.  

Leading brands at Hain
Hain Celestial also has a potpourri of natural food products that have been delivering good numbers lately. Its brand portfolio touts WestSoy as the "number one brand in non-dairy soy beverages." Rice Dream and Soy Dream are the other milk substitutes that the company produces and sells. The company likewise considers its Dream brand among its strongest brands not only in the U.S. but also globally.  

Generating "strong brand contribution across various sales channels," Hain reported record U.S. sales of $312 million for its fiscal 2014 first quarter, up 23% from a year earlier. Including its U.K. and rest-of-the-world segments, the company's aggregate net sales totaled $433.5 million, 33% over the comparative period in fiscal year 2013.

Sour dairy outlook
In contrast, the picture looks dreary for Dean Foods (NYSE:DF), which became a pure dairy milk play after it spun off WhiteWave last year to rid itself of debt. Dean Foods' share price lost an estimated 10% following its announcement of lackluster third quarter results.

The company reported $0.14 in adjusted diluted EPS for the quarter. However, this was boosted by the one-time gain from the sale of its former WhiteWave subsidiary.

Dean Foods' share of U.S. fluid milk market dropped to 34.9% from 36.4% in the second quarter, and no immediate relief is in sight. The dairy fluid milk industry's volumes dropped year-over-year by about 1.7% in the third quarter, and analysts forecast a 1.6% sales volume decline in the dairy processing industry as a whole for this year. 

Sunnier days for substitutes
WhiteWave, on the other hand, sees rosier prospects, noting that "alternatives to dairy are (still) in the early stages of their development." Therefore, the company is further enlarging its portfolio of plant-based milk alternatives, as seen in the recent rollout of its almond whites line. Following this smooth market entry, it launched a new oat milk in the United Kingdom under the Alpro brand. 

Hain Celestial, for its part, plans to tap the strong global franchise of its Dream brand to further expand its presence in the non-dairy milk market. It plans to roll out not only almond milks under this brand but also nut milk blends, coconut milks, and rice milks. 

Final sip
WhiteWave and Hain are both worthy picks for reaping rewards from the growing consumer preference for plant-derived milk beverages. Both have established brands and the marketing savvy to excite consumers with new product offerings.

The caveat for WhiteWave is its inferior profit margin, which is currently at 4.42%, below Hain's 6.8%. This metric bears watching as WhiteWave moves forward as an independent company.

Buying on dips from current price levels is also what value investors would want to pursue with these equities. Year-highs on prices of WhiteWave and Hain were just set this November, and ensuing profit-taking could present entry-point opportunities.