The global dairy alternatives market is anticipated to reach USD 82.4 Billion by 2031 at a CAGR of 12.8%. Owing to the change in eating patterns of consumers and changing dietary trends, the market is gaining momentum and witnessing high demand. The increasing incidences of cases of milk allergy and lactose intolerance is expected to further increase the demand over the forecast period. Thus, many food and beverage manufacturers are using the products to attract the growing consumer base that is choosing plant-based and other dairy alternatives.
The rising awareness of lactose intolerance, rising vegan & plant-based lifestyle, increase in dairy allergies, environmental concerns & sustainability, changing consumer preferences, and nutritional benefits derived from dairy alternatives are the factors driving the global dairy alternatives market. Due to rising awareness of lactose intolerance, people are searching for alternatives to avoid digestive issues and discomfort caused by lactose. With vegan and plant diets setting a new table, dairy alternatives have become the call of the day. It is also driven by consumer health concerns and ethical issues related to animals and environmental well-being. This has led to a rise in the demand for vegan life with products like almond milk, soy milk, oat milk, and most of the things considered as plant alternatives to dairy. There is a risk of people being allergic to dairy products. The allergic reactions sometimes are very severe like skin rashes, nausea, itching, and more. Hence, these consumers are avoiding traditional dairy products and opting for dairy alternative products that do not cause such allergies. The greenhouse gas emissions, water usage, and land degradation are some of the significant environmental footprints caused by dairy production. Nowadays, consumers are becoming more conscious about environmental concerns and sustainability and are searching for dairy alternatives that do not cause such environmental concerns. Dairy alternatives products are perceived as more eco-friendly and sustainable, thereby helping the global dairy alternatives market grow.
The modern consumer has become very health-conscious and is on the lookout for foods that meet his dietary requirements as well as his ethical outlook. Such a promising move toward plant foods would make dairy products, by definition, a thing of the past. This, in turn, is fueling the demand for dairy alternatives. Most of the dairy alternatives like almond milk have essential vitamins and minerals that are needed by the human body. The presence of such nutrients makes dairy alternatives a good option for health-conscious consumers. Almond milk is known for its presence of Vitamin E and Manganese. This in turn helps in improving skin quality and protects against certain cancers. This type of health benefits that can be obtained from dairy alternatives make it an important driver of the global dairy alternatives market.
Government regulations play an important role in supporting the global dairy alternatives market by promoting sustainable and plant-based food products. The key aspects include labeling standards, sustainability policies, health & nutrition guidelines, and import & export regulations for these products: Many governments in different nations have established clear labeling standards for dairy alternatives, ensuring transparency and leading to consumer trust. Regulations promoting environmental sustainability encourage the adoption of plant-based alternatives to reduce the carbon footprint on the planet associated with traditional dairy farming. Government health agencies often recommend plant-based diets for their potential health benefits, this indirectly helps the global dairy alternatives market heavily. The trade policies and agreements in different nations can facilitate the global distribution of dairy alternatives, making them more accessible to consumers around the world and thereby, lowering down its prices for consumers.
Market Opportunities
There are several opportunities in the global dairy alternatives market owing to research & development, rapid urbanization, rising disposable income, and a wide range of consumers. Research & development is being done in the dairy alternatives market so that the companies can imitate the traditional dairy products' taste and texture while providing additional nutritional benefits and better shelf-life. The product innovation is being done for plant-based milk, cheese, ice cream, yogurt, paneer, and more. These plant-based products are available with additional nutritional benefits like vitamins, minerals, and proteins which help the consumers in meeting their daily requirements of nutrients. This will lead to better acceptance rate by consumers hence driving the growth in the global dairy alternatives market.
The product innovation related to the global dairy alternatives market is also mainly ingredient innovation, improved processing techniques, and better texture & flavor. Through research & development in the dairy alternatives market, many plant-based ingredients are being explored like algae, fungi and legume-based proteins. In the dairy alternatives market, the ingredient innovation that has gained immense popularity is pea-protein due to its versatility and nutritional profile. The dairy alternatives market also saw improved processing techniques like high-pressure processing (HPP) and microfluidization. These techniques help in improving the texture and shelf-life of dairy alternatives. These techniques are most used in plant-based milk and yogurt.
With rising urbanization, people are opting for a modern lifestyle that includes a healthy diet. Even disposable incomes are on the rise which are leading consumers to invest more in premium quality food products like dairy alternatives. Hence, the rise in urbanization and disposable incomes is a big opportunity to tap into the global dairy alternatives market. There have also been advancements in terms of better flavor and texture in the global dairy alternatives market. Flavor technology in the dairy alternatives industry is evolving and it uses emulsifiers and flavor masking agents to make the texture and flavor of dairy alternatives just like traditional dairy products.
Market Restraints
The global dairy alternatives market also has a few restrictions. Many consumers have soy and nuts allergies which restricts the market expansion as these two products are majorly used for the production of dairy alternatives. Using products that contain soy and nuts would lead to allergic reactions like rashes, fever, breathing problems, and much more. The global dairy alternatives market is also hampered owing to the limited availability of raw materials. Dairy alternative products are made majorly from almonds, soy, and rice which face shortage almost every season as compared to the masses dairy alternatives aim to cover.
Impact of COVID-19
Increased health awareness due to the COVID-19 pandemic created greater demand among end-users for oat-based, soy-based, and almond-based dairy alternative products mainly due to their perceived health values and immunity-related properties. This rise in demand spurred innovation, influencing companies to upgrade product offerings and improve nutritional profiles. Physical store closures and social distancing measures sent many buyers onto the e-commerce platforms, strongly boosting online sales of dairy alternatives. Brands moved rapidly to reinforce their digital presence and optimize supply chains for online retail. The COVID-19 period of crisis underlined not just the growth potential of this market segment but also its capacity for rapid innovation and adjustment in response to changed consumer behaviors and global challenges. The main negative impact of COVID-19 on the global dairy alternatives market was disrupted supply chains. This led to problems in finding the ingredients needed for dairy alternatives and packaging problems which resulted in production delays and higher costs of dairy alternatives.
Segmentation
The global dairy alternatives market is segmented into the source, product type, and distribution. Based on the source, the market is further segmented into soy, almond, coconut, rice, oats, and others. Soy has a higher growth potential due to its availability. Asia -Pacific region, especially China is the largest source market for soy. Similarly, almond milk is also amongst the fastest-growing dairy alternative products as it has low calories. People are also shifting towards almond milk due to allergic reactions by consuming soy. These reasons contribute to the growth of almond milk in North America, Europe, and Australia’s beverage market. The younger consumers appeal well to this market.
Based on the product type, the dairy alternatives market is segmented into milk, cheese, butter, ice cream, yogurt, and others. Product types like vegan ice cream, cheese and yogurt are showing better growth rates than that of non-dairy milk. These categories are preferred by consumers of all ages. Terms like “non-dairy”, “plant-based” and “vegan” are used to capture the attention of consumers. This is practised by the food service sector.
By distribution channel, the market is segmented into supermarkets/hypermarkets, convenience stores, online stores, and others. Supermarkets/hypermarkets are the consumer's first choice to buy dairy alternative products. They are preferred as they cater to the needs of consumers due to reasons like proximity, accessibility, and affordability at the store. Vegan and plant-based products have dedicated shelves that offer attractive discounts to lure customers and increase their adaptability. Plant-based products are easy to store, prepare, and eat. Online stores are expected to grow substantially during the forecast period due to increased digital literacy among consumers, better shopping experience, and convenience.
Regional Analysis
North America is the largest market for dairy alternatives. The market is driven by factors like rising awareness and people being affected with lactose intolerance, increasing awareness of health, and a shift in diet preferences towards plant-based diet. Almond milk, soy milk, and oat milk and its products are highly popular in this region. The contributing factors that drive the Europe dairy alternatives market are health awareness and consciousness, vegan diet preferences, sustainability, and environmental concerns. Dairy alternative products are popularly consumed with ingredients like almond, soy, and coconut.
The Asia-Pacific region has a notable market share in the global dairy alternatives market. China and Japan in this region help the market move forward due to their traditional dietary restrictions, popularity in vegan culture, and rising health consciousness. The cultural practices and modern health trends contribute to the growth of the dairy alternatives market in the Asia-Pacific region. Australia is also a leading country that caters to the growth of the dairy alternatives market in this region owing to health and dietary preferences.
Brazil and Argentina are helping the Latin American market strive for low to moderate growth in the global dairy alternatives market. The most consumed dairy alternatives are made from almonds and soy in this region. With rising health awareness and changing consumer dietary preferences, the countries in this region are opting for plant-based diets.
The Middle East and Africa region has a low market share of dairy alternatives and still is in the early stage of adaptation of dairy alternatives. The market growth in this region is contributed by countries such as the UAE and South Africa due to rising interest and awareness in plant-based diets and their products.
Competitive Analysis
The global dairy alternatives market has some key giants who contribute to the overall growth of the market. Some of them are launching new products as well as participating in mergers and acquisitions. The major players in the market are Danone S.A., Organic Valley, Eden Foods Inc., SunOpta Inc., Archer-Daniels-Midland Company, Blue Diamond Growers, Goya Foods Inc., Living Harvest Foods Inc., Ripple Foods, and Nestle, among others.
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The global dairy alternatives market is segmented as follows:
By Source (Revenue: USD Billion, 2019 – 2031)
● Soy
● Almond
● Coconut
● Rice
● Oats
● Others
By Product Type (Revenue: USD Billion, 2019 – 2031)
● Milk
● Cheese
● Butter
● Icecream
● Yogurt
● Others
By Distribution Channel (Revenue: USD Billion, 2019 – 2031)
● Supermarkets/Hypermarkets
● Convenience Stores
● Online Stores
● Others
By Region (Revenue: USD Billion, 2019 – 2031)
● North America
o U.S.
o Canada
o Mexico
● Europe
o U.K.
o France
o Germany
o Italy
o Spain
o Rest of Europe
● Asia Pacific
o China
o Japan
o India
o South Korea
o South East Asia
o Rest of Asia Pacific
● Latin America
o Brazil
o Argentina
o Rest of Latin America
● Middle East & Africa
o GCC Countries
o South Africa
o Rest of Middle East & Africa
Frequently Asked Questions (FAQs)
The global market for dairy alternatives is expected to reach USD 82.4 Billion in 2031 growing at a CAGR of 12.8%.
The major players in the global dairy alternatives market are Danone S.A., Organic Valley, Eden Foods Inc., SunOpta Inc., Archer-Daniels-Midland Company, Blue Diamond Growers, Goya Foods Inc., Living Harvest Foods Inc., Ripple Foods, and Nestle, among others.
The global dairy alternatives market is projected to grow at a CAGR of 12.8% between 2024 and 2031.
The market for global dairy alternatives is driven by the rising instances among consumers of lactose intolerance coupled with the increased trend of vegan & plant-based lifestyle.
North America was the leading regional segment of the global dairy alternatives market in 2023.
