Dairy Alternatives Market Growth Opportunities and Forecast by 2028

[Research Report] The dairy alternatives market is projected to reach US$ 51,656.58  million by 2028 from US$ 28,181.76 million in 2022; it is expected to grow at a CAGR of 10.6% from 2022 to 2028.

Market Insights and Analyst View

Dairy alternatives such as milk, yogurt, ice cream, cheese, and butter are made from soymilk, pea milk, almond milk, and coconut milk. Soymilk is more affordable than other plant milk, and it provides a similar amount of protein as whole milk. Consumers are highly inclined toward plant-based or vegan-friendly products due to increasing health concerns and increasing awareness of animal welfare. Plant-based dairy products such as cheese, milk, and yogurt are generally perceived to be healthier than conventional ones and excellent replacement for dairy products obtained from animal sources due to the low fat and high protein content. Moreover, dairy farming is negatively impacting overall environment leading to climate change. This factor is also influencing the dairy alternatives market growth.

Growth Drivers and Challenges

Due to an increasing number of health-conscious consumers and the trend of plant-based diets, the demand for plant-based milk is tremendously increasing the region. Moreover, rising concerns related to the carbon emissions by the conventional dairy industry is also boosting the demand for dary alternatives. According to the “Plant-Based Food Association”, retail sales of plant-based food products in the US increased by 11% in 2019, compared to that in 2018, accounting for the market value of US$ 4.5 billion. The high nutritional value of plant-based dairy products, such as plant-based milk, cheese, and yogurt, has fuelled their demand across different regions in the last few years, especially among young adults. Moreover, the dairy alternatives market is significantly growing due to product innovation by manufacturers which pioneered the production of these products. For instance, In January 2022, Daiya launched its cream cheese flavor, roasted garlic, and herbs to its recently reformulated plant-based cream cheese line. The launch of such products is expected to boost the dairy alternatives market growth over the forecast period.

Published Report - Dairy Alternatives Market: Strategic Insights

Report Segmentation and Scope

The “Global Dairy Alternatives Market” is segmented based on source, product type, distribution channel, and geography. Based on source, the dairy alternatives market is segmented into soy, almond, coconut, oats, and others. Based on product type, the dairy alternatives market is segmented into milk, ice cream, yogurt, cheese, and others. Based on distribution channel, the dairy alternatives market is segmented into supermarkets and hypermarkets, convenience stores, online retail, and others. The dairy alternatives market based on geography is segmented into North America (US, Canada, and Mexico), Europe (Germany, France, Italy, UK, Russia, and Rest of Europe), Asia Pacific (Australia, China, Japan, India, South Korea, and Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and Rest of South & Central America)

Segmental Analysis

Based on product type, the dairy alternatives market is segmented into milk, ice cream, yogurt, cheese, and others. In 2021, the milk segment held the largest share in the dairy alternatives market. Plant-based milk from sources such as soy, almonds, coconuts, and oats are the best alternative for dairy milk and other animal-based milk present in the market. Also, these products are excellent lactose free alternatives for conventional dairy milk. Increasing lactose-intolerant population is one of the major factors to drive the growth of the plant-based milk segment. Moreover, people who are allergic to milk are also recommended to consume plant-based milk. Furthermore, with the increasing vegan population worldwide, the demand for plant-based milk is rising, which is driving the market growth.

Based on distribution channel, the dairy alternatives market is segmented into supermarkets and hypermarkets, convenience stores, online retail, and others. The supermarkets and hypermarkets segment held the largest market share in 2021 and the online retail segment is expected to register the highest CAGR over the forecast period. Online retail is one of the fastest-growing distribution channels owing to its convenience in terms of shopping and product delivery. Online retail stores offer a wide variety of products with heavy discounts; also, consumers can conveniently buy desirable products remotely. Home delivery service attracts a large group of customers to shop through an e-commerce platform. E-commerce websites offer detailed product information, along with user reviews, which help buyers compare products and make informed decisions. These factors are significantly driving the segment’s growth over the upcoming years.

Regional Analysis:

Based on geography, the dairy alternatives market is divided into five key regions: North America, Europe, Asia Pacific, South & Central America, and Middle East & Africa. The dairy alternatives market size for Asia Pacific accounted for US$ 13,053.48 Million in 2021. North America is a second major contributor holding more than 22% share in the global dairy alternatives market. Middle East & Africa also one of the key markets for dairy alternatives growing at a CAGR of ~ 11%. Plant-based dairy products are becoming widely popular in the region, with the growing consumer preference for a healthy diet due to the rising cases of lactose-intolerant people. Several local companies have adopted consuming plant-based diet trend. For instance, in 2022, Freakin Healthy, the UAE-based snack company, expanded its better-for-you product range with the launch of a new plant-based cheese spread. The launch of the cheese spread, which is available in four flavors, marks its decision to expand the customer base and product portfolio under the clean and ready-to-eat category. Moreover, exposure to westernized diet trends is driving the dairy alternatives market growth in the Middle East & Africa.

Industry Developments and Future Opportunities:

Various initiatives taken by the key players operating in the dairy alternatives market are listed below:

1. In April 2021, SunOpta opened a new headquarters in Eden Prairie, signaling a new chapter for the company as it completes its turnaround effort. The company, currently based in Edina, will double its space that will include both offices and a research & development (R&D) center.
2. In November 2021, Blue Diamond Growers, the world’s leading almond marketer and processor, expanded its selection of Almond Breeze products with the launch of Almond Breeze Extra Creamy Almond milk.
3. In July 2021, Danone S.A. launched a new Silk NextMilk and So Delicious WonderMilk. These products are developed to help close the gap between traditional dairy drinkers and plant-based beverage consumers.

Dairy Alternatives

Published Report - Dairy Alternatives Market Players Density: Understanding Its Impact on Business Dynamics

The Published Report - Dairy Alternatives Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Covid-19 Impact: 

The COVID-19 pandemic affected almost all industries in various countries. Lockdowns, travel restrictions, and business shutdowns in North America, Europe, Asia Pacific (APAC), South & Central America (SAM), and the Middle East & Africa (MEA) hampered the growth of several industries, including the food & beverages industry. During the initial phase of the COVID-19 pandemic, severe supply chain disruptions created a shortage of raw materials, leading to an increase in raw material prices. According to the Good Food Institute, the oat milk sales increased by 477%, and the sales of animal-based milk increased only by 32% during the week ending March 14, 2020. Oatly, an oat milk manufacturer, witnessed massive demand for their products in the US during the pandemic. However, as the manufacturing units remained shut, a production shortfall created a demand and supply gap. In 2021, various economies resumed operations as several governments announced relaxation in the previously imposed restrictions, which positively impacted the global marketplace. Moreover, manufacturers were permitted to operate at full capacity, which helped them overcome the demand and supply gap.

Competitive Landscape and Key Companies:

Some of the prominent players operating in the global dairy alternatives market include are SunOpta; Blue Diamond Growers; Nestle SA; Danone S.A.; Oatly Inc.; Califia Farms, LLC; Valsoia S.p.A.; Lactasoy co.th.; Sanitarium; and Valio Ltd. among others. These plant-based dairy companies are highly involved in plant capacity expansion and new product development to enhance their expertise and expand their product portfolio across different geographies. Moreover, these companies are also partnering with other players in the industry to cater to a wider customer base. Such initiatives are expected to provide strong growth potential to the key industry players operating in the dairy alternatives market.