Dairy alternatives market shows no signs of slowdown - research
Market analysts Grand View Research have tipped the global dairy alternatives market to expand rapidly this decade, owing to consumer demand for plant-based products and an increased incidence of allergies and lactose intolerance.
Market penetration of dairy-free cheese products is predicted to grow over the forecast period, though milk alternatives are likely to continue to dominate a product segment. In 2022, milk alternatives accounted for a revenue share of around 68%.
And while plant-based milk alternatives still form a relatively small part of the dairy isle compared to traditional dairy milk, the segment has established as a mainstay in Western Europe and the US – to the extent that the USDA is considering adding plant-based milks to school menus, as long as they provide comparable nutritional benefits as dairy. In the EU, a campaign led by NGO ProVeg International is lobbying for plant-based milks to be added to school menus. And according to Grand View Research, “the popularity of the vegan diet has increased due to COVID-19 as consumers have been increasingly adopting plant-based food products, further boosting the sales across the globe.”
The analysts have highlighted almond milk as one of the most popular milk alternatives options during the period. Currently the second-largest segment, its growth will be fuelled by ease of raw material availability and almond’s nutrition profile. Rice milk is also tipped for growth, with organic varieties in particular already ‘gaining momentum’ over conventional alternatives despite the higher price tag of organic products.
Hemp, cashew and coconut milks are also gaining popularity, thanks to their health benefits.
Meanwhile, desserts based on soy and almond milk are among the key market drivers this decade according to the analysts, thanks to developments in flavoring and masking ingredients that have made plant-based desserts ‘more palatable’. According to the report, “the price of such desserts is [lower] compared to dairy substitutes, which is likely to increase the penetration of plant-based milk desserts across the globe.”
Regionally, Asia Pacific dominated the market in 2022 with a revenue share of more than 45% and rising disposable incomes in emerging markets such as India, China and Japan are likely to fuel demand for the product segment over the forecast period.
Meanwhile, North America is expected to remain a major market for dairy alternatives, particularly ice cream, where the growth of the dairy alternatives category is expected to be ‘much higher’ than that of the traditional dairy segment despite moderate demand from consumers. In addition, precision fermentation and cell-based dairy companies are also predicted to drive R&D in the segment and bolster product availability.
The European market has also been tipped to witness ‘substantial’ growth over the forecast period, owing to rising demand for ‘healthy foods and beverages’.