Dairy Alternatives Market

Dairy Alternatives Market Size:

The global dairy alternatives market size reached US$ 31.1 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 73.3 Billion by 2032, exhibiting a growth rate (CAGR) of 9.7% during 2024-2032. The dairy alternatives market size is driven by the increasing consumer focus on health, sustainability, and the introduction of innovative product offerings, with plant-based options gaining popularity worldwide in response to changing dietary preferences and environmental concerns.

Dairy Alternatives Market Analysis:

• Market Growth and Size: The dairy alternatives market is experiencing robust growth, driven by health-conscious consumers and environmental concerns. It is projected to continue expanding, with a global market size expected to reach billions of dollars in the coming years.
• Major Market Drivers: Key drivers include health and wellness trends, environmental sustainability, innovative product offerings, retail and foodservice expansion, and global dietary diversity, as consumers seek healthier, more sustainable, and diverse options.
• Technological Advancements: Continuous innovation has led to improved plant-based products that closely resemble traditional dairy items, enhancing consumer acceptance and market growth.
• Industry Applications: Dairy alternatives are not limited to milk but extend to dairy-free cheese, yogurt, ice cream, and butter alternatives, catering to a wide range of consumer preferences.
• Key Market Trends: Trends include the rise of veganism, the adoption of regenerative farming practices, and the customization of alternatives to meet regional tastes, indicating a dynamic and growing market.
• Geographical Trends: Regional preferences and dietary habits influence the popularity of specific alternatives, with variations in demand for soy, almond, oat, and coconut-based products across different markets.
• Competitive Landscape: The market is highly competitive, with both established players and new entrants vying for market share. Companies are increasingly focusing on sustainability and product innovation to gain a competitive edge.
• Challenges and Opportunities: Challenges include regulatory complexities and the need for product differentiation. However, opportunities abound in catering to the growing demand for dairy alternatives, especially in emerging markets, and in developing unique, sustainable, and region-specific offerings.
   

Dairy Alternatives Market Trends:

Health and wellness trends:

Growing consumer awareness of health and wellness, including lactose intolerance, dairy allergies, and concerns about animal welfare, is a significant driver of the dairy alternatives market. A report by the National Center of Biotechnology Information states that 65% of the world’s population is lactose intolerant, with percentage varying across regions. Northern Europe experiences low lactose intolerance of approximately 10%, but is higher in parts of Asia and Africa at 95%. Moreover, according to a global survey conducted by NSF in 2021, 88% of food practitioners anticipate the demand of plant-based products to increase. When asked about the reason, 74% sided with a healthier lifestyle, whereas 60% believed it’s to do with being more environmentally friendly. Consumers are increasingly seeking plant-based options as they perceive them to be healthier choices. This shift in consumer preferences is driven by the desire for products that are lower in saturated fats, cholesterol-free, and often fortified with essential vitamins and minerals. Additionally, the rise of veganism has further propelled the market on a global level. For example, in 2020, plant-based dairy and meat sales were over US$ 39 billion and were projected to reach US$ 162 billion by 2030. Another statistics states that the United Kingdom witnessed a 40% increase in vegans in 2020, totalling over 1.5 million people. India too has witnessed a growing vegan food trend with approximately 5 million strict vegans. The trend towards veganism in India is expected to exhibit a CAGR of 11.32% during 2022-2027.

Environmental sustainability 

Concerns about the environmental impact of dairy production have become a pivotal driver in the dairy alternatives market outlook. The dairy industry is associated with significant greenhouse gas emissions, water usage, and land usage. Environmentally conscious consumers are opting for alternatives as a more sustainable choice, and plant-based options generally have a lower environmental footprint, leading to increased adoption. Moreover, the adoption of regenerative and sustainable farming practices by some dairy alternative producers further reinforces the perception of these products as eco-friendly choices. For instance, in October 2023, Velike, a Germany-based organic oat drink producer, launched NOT M’LK, which is a vegan milk free of dairy, gluten, and nuts. The speciality of the drink lies in the fact that the oats are exclusively sourced from farms in the Black Forest and other regions of Baden-Wurttemberg, supporting the local economy and contributing to a lower carbon footprint

Innovative product offerings:

Continuous innovation in the sector is also supporting the market. Leading players are constantly developing new and improved plant-based products to mimic the taste and texture of traditional dairy items. This innovation extends beyond milk to include dairy-free cheese, yogurt, ice cream, and even butter alternatives. The ability to offer a wide range of dairy-free options that closely resemble their dairy counterparts has expanded the consumer base for these products. Additionally, continual advancements in food technology, such as the use of novel ingredients and processing techniques, are enhancing the nutritional profile of these products, making them appealing to health-conscious consumers. For instance, in June 2022, Danone, a French multinational food-products corporation, launched Vanilla Denette Vegan Mousse made from coconut milk in France. The mission of the company through this innovation is to extend its Denette range of products and further advance the vegan lifestyle with great-tasting products.

Dairy Alternatives Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on source, formulation, nutrient, distribution channel, and product type.

Breakup by Source:

• Almond
• Soy
• Oats
• Hemp
• Coconut
• Rice
• Others
   

Soy accounts for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the source. This includes almond, soy, oats, hemp, coconut, rice, and others. According to the report, soy represented the largest segment.

Soy-based alternatives hold the dominant position in the market, driven by their long-established presence and robust consumer acceptance. They are preferred by many due to their nutritional profile, similar texture to dairy milk, and versatility in various applications. Soy milk, yogurt, and tofu-based products continue to lead the way in this segment, appealing to both vegans and individuals with lactose intolerance. Additionally, they are a good source of isoflavones, compounds that have been linked to various health benefits, including a reduced risk of heart disease and osteoporosis. The low levels of saturated fat in soy products also contribute to their popularity among health-conscious consumers. For instance, in February 2021, Life Health Foods (India) Pvt.Ltd., a leading player in the health beverage segment, launched So Good Protein+Soy, which is a dairy-free, gluten-free, and lactose-free plant-based milk.

Breakup by Formulation:

• Plain
  • Sweetened
  • Unsweetened
• Flavored
  • Sweetened
  • Unsweetened
     

Plain formulation holds the largest share in the industry 

A detailed breakup and analysis of the market based on the formulation have also been provided in the report. This includes plain (sweetened and unsweetened) and flavored (sweetened and unsweetened). According to the report, plain formulation accounted for the largest market share.

The plain formulation segment holds the largest share in the dairy alternatives market, reflecting consumer's preference for unflavoured, versatile options that can be used in various culinary applications. Products, such as plain almond milk, soy milk, and oat milk are favored for their neutrality, making them suitable as a milk substitute in coffee, baking, or cooking. This segment caters to health-conscious individuals who seek a dairy-free alternative without added sugars or flavorings, allowing them to customize the taste to their liking.

Breakup by Nutrient:

• Protein
• Starch
• Vitamin
• Others
   

Protein represents the leading market segment

The report has provided a detailed breakup and analysis of the market based on the nutrient. This includes protein, starch, vitamin, and others. According to the report, protein represented the largest segment.

Protein-based alternatives stand out as the largest segment in the market, primarily driven by consumer's focus on health and fitness. These products are fortified with additional plant-based proteins, such as pea protein, soy protein, or almond protein, to provide a protein-rich alternative to traditional dairy products. They cater to individuals seeking a dairy-free source of protein for muscle recovery and overall nutrition. Protein-based alternatives are widely used in post-workout shakes, smoothies, and as a dairy milk substitute in various applications. For instance, in February 2024, Califia Farms announced the launch of Califa Farms Complete, a creamy plant-based milk with 9 essential nutrients and 8 grams of protein, helping consumers meet their nutritional needs.

Breakup by Distribution Channel:

• Supermarkets and Hypermarkets
• Convenience Stores
• Online Stores
• Others
   

Supermarkets and hypermarkets exhibit a clear dominance in the market

A detailed breakup and analysis of the market based on the distribution channel have also been provided in the report. This includes supermarkets and hypermarkets, convenience stores, online stores, and others. According to the report, supermarkets and hypermarkets accounted for the largest market share.

Supermarkets and hypermarkets constitute the largest segment for the distribution of the dairy alternatives market. These retail giants offer a wide array of dairy alternative products, providing consumers with convenience and choice under one roof. This segment's dominance is attributed to the accessibility, diverse product selection, and the ability for consumers to physically inspect and compare a wide range of products. It's the go-to channel for consumers seeking familiar alternatives and exploring new options, making it a crucial battleground for market players. For instance, there are over 38,000 supermarkets in the United States. The average American supermarket generates US$ 516,727 in sales/week. Moreover, 52% of customers are drawn to stores that offer sustainable food options. Apart from this, 42% of the supermarket customers are in the age group of 24-35, which is one of the key target audience for dairy alternatives market.

Breakup by Product Type:

• Cheese
• Creamers
• Yogurt
• Ice Creams
• Milk
• Others
   

Milk dominates the market 

The report has provided a detailed breakup and analysis of the market based on the product type. This includes cheese, creamers, yogurt, ice creams, milk, and others. According to the report, milk represented the largest segment.

Milk substitutes, such as almond milk, soy milk, oat milk, and coconut milk, represent the largest segment in the market. These products serve as versatile dairy milk replacements, used in a wide range of applications, including beverages, baking, and cooking. They are favored by consumers seeking lactose-free, plant-based, and often fortified alternatives with vitamins and minerals. The segment's growth is fueled by health-conscious consumers and those with dietary restrictions, contributing significantly to the overall market size on a global level. For instance, in June 2022, Nestle-owned SMA Nutrition introduced Little Steps Plantygrow, which is a plant-based growing up drink for toddlers aged 1 to 3. The drink is fortified with essential nutrients to support the overall development of toddlers.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific leads the market, accounting for the largest dairy alternatives market share 

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounted for the largest market share.

Asia Pacific emerges as the largest and most dynamic region in the market, driven by a combination of factors, including the rise of veganism, lactose intolerance prevalence, and a growing health-conscious population. Countries such as China, India, and Japan have witnessed significant demand for plant-based dairy alternatives, particularly soy and almond-based products. The region's market growth is characterized by innovation, with local manufacturers introducing unique flavors and formulations to cater to diverse consumer preferences. Moreover, Asia Pacific witnessed an overall growth rate of 9% in the sales value of plant-based milk from 2019-2023. Plant-based milk forms a significant portion of the dairy alternatives market in the region. The countries that are the leading consumers of the product include China, Japan, and South Korea, collectively accounting for a 74% share of the overall plant-based milk market in the region during 2023.

For example, in 2022, the New Zealand Government contributed US$ 6 million to support New Zealand Functional Foods, a Southland-based oat milk producer.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the major market players in the Dairy Alternatives industry include Blue Diamond Growers, Döhler gmbh, Earth’s Own Food Company Inc., Eden Foods, Inc., Freedom Foods Group, Nutriops S.L., Organic Valley, Panos Brands, Sanitarium, Sunopta Inc., Hain Celestial Group, Inc., The Whitewave Foods Company (Danone North America), Triballat Noyal, and Valsoia SpA.
  
  (Please note that this is only a partial list of the key players, and the complete list is provided in the report.)
   
• Key players in the market are actively engaged in several strategic initiatives to maintain their market positions and capitalize on the growing consumer demand for plant-based products. These initiatives include product innovation, where companies are continuously developing new dairy alternative formulations to expand their product portfolios and cater to changing consumer preferences. Additionally, many major players are focusing on sustainability, sourcing high-quality plant ingredients, and adopting eco-friendly packaging practices to align with consumer concerns about environmental impact. Marketing efforts are geared towards highlighting the health benefits of dairy products, such as being lactose-free and low in saturated fats, to attract health-conscious consumers. Collaboration with foodservice chains and expanding distribution channels also plays a crucial role in their growth strategies, ensuring wider accessibility and market penetration.
• For instance, in May 2021, Saputo Inc., a Canadian dairy company, completed the acquisition of Bute Island Foods for an undisclosed amount. This strategic move by Saputo Inc. aims to bolster its product portfolio in the plant-based dairy alternatives sector, positioning itself competitively in the market.
• In February 2024, Danone inaugurated a new plant-based beverage production facility in Villecomtal-sur-Arros, France. The plant features two innovative and competitive production lines, along with a new production model, to meet consumer expectations.

Dairy Alternatives Market News:

• 20 July 2023: Döhler GmbH announced the acquisition of SVZ, subject to regulatory approval. This acquisition strengthens Döhler’s portfolio of natural red fruit and vegetable ingredients and expands its operations in the USA and Japan5.
• 24 February 2022: PANOS Brands announced new product formulations and packaging. The recent re-brand of the zero calorie, zero carbs salad dressing and condiments line has been improved to be formulated with real vegetables, fruit fiber, and natural flavors, removing all preservatives, sucralose, and artificial flavors and dyes.
• 29 January 2021: Sanitarium health food company has joined the Future Food Systems cooperative research centre consortium. They are working with UNSW food-technology specialists to improve the functional properties of innovative plant-based protein products

Dairy Alternatives Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the dairy alternatives market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global dairy alternatives market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region. 
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the dairy alternatives industry and its attractiveness. 
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.