Dairy Alternatives Market Size, Share & Trends Analysis Report By Source (Soy Milk, Almond Milk, Coconut Milk, Rice Milk, Oat Milk, Others), By Product (Milk, Yogurt, Ice Cream, Cheese, Creamer, Others), By Distribution Channel (Supermarkets and Hypermarkets, Convenience Stores, Online Retail, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2030

Market Overview

The global dairy alternatives market size was valued at USD 23 billion in 2021. It is estimated to reach USD 65.33 billion by 2030, growing at a CAGR of 12.3% during the forecast period (2022-2030). 

Any substance that resembles milk and can be used in the same ways as milk is considered a milk substitute. Different alternatives, including nut milk, grain milk, legume milk, and mock milk, are known as non-dairy beverages. Almond milk, coconut milk, rice milk, and soy milk are examples of popular plant-based milk. Due to its high protein, fiber, lipid, and calorie content, almond milk is becoming increasingly popular, which is predicted to increase demand.

Almond milk's superior taste and texture compared to its competitors will give the product a competitive edge over the projection period. Almond milk benefits the heart, kidneys, and skin in addition to lowering blood pressure, which will likely lead to an increase in demand over the following years. Due to its high protein, fiber, lipid, and calorie content, almond milk is becoming increasingly popular, which is predicted to increase demand.

Market Dynamics

Global dairy alternatives market drivers

Growing numbers of lactose intolerance cases

The market for dairy alternatives is anticipated to be significantly influenced by rising occurrences of lactose intolerance and milk allergies. A hereditary condition, lactose intolerance is widespread in Southeast Asian populations. Consumers with lactose intolerance favor lactose-free, plant-based substitutes to increase their intake of calcium and vitamins. It is anticipated that growing consumer health concerns and rising disposable income in developed and developing nations will increase demand for dairy substitutes. Rising consumer awareness of a healthy diet and increased demand for foods with lower cholesterol and fats will provide new opportunities for dairy alternatives market competitors.

Additionally, over 80% of Southeast Asians, according to the National Institutes of Health, are lactose intolerant, and this percentage is rising as the region's population expands. Soymilk, almond, coconut, oat, and rice milk are just a few examples of lactose-free products whose demand is anticipated to increase over the projection period. Additionally, the rising demand for lactose-free food items such as cheese, yogurt, desserts, and snacks is anticipated to affect market expansion positively.

Global dairy alternatives market restraining factors

High prices of dairy subtitle products

The market for dairy replacements is expected to expand significantly due to consumer interest in health and wellness. Southeast Asia has the highest incidence of lactose intolerance and the highest demand for dairy alternatives. Almonds, hazelnut, and cashew are just a few nuts used to make dairy substitutes. The cost of manufacturing dairy alternatives is higher due to the high price of these raw materials, which will likely restrain dairy alternatives market growth over the forecast period.

Global dairy alternatives market opportunities

High health related benefits of dairy substances

Patients with heart disease adore the product because it lowers cholesterol levels. Soy milk is also lower in calories than whole and skim milk and contains the same amount of proteins as cow's milk. In addition, according to the National Institutes of Health, more than 80% of Southeast Asians are lactose intolerant, and this number is increasing as the region's population grows. Soymilk, almond, coconut, oat, and rice milk are just a few examples of lactose-free products whose demand is anticipated to increase over the projection period.

Since coconut milk is rich in vitamins and minerals, using it to treat arthritis is advantageous. It contributes to blood pressure maintenance and is one of the leading suppliers of magnesium. The market for dairy replacements is anticipated to rise over the next few years due to millennials' growing preference for coconut creams and yogurts. When it comes to milk, those who struggle with obesity tend to favor almonds. Compared to cow's milk, it has fewer calories and is beneficial for controlling weight. The product is anticipated to gain more acceptance as a daily dietary supplement over the forecast period because, unlike cow's milk, it inhibits the growth of breast and prostate cancer cells.

Regional Analysis

The global dairy alternatives market is divided into four regions, namely Asia-Pacific, North America, Europe, and LAMEA. 

Asia-pacific dominates the global market

Asia-Pacific is the most significant shareholder in the global dairy alternatives market and is expected to grow at a CAGR of 13.40% during the forecast period. This can be attributed to the rise in the vegan trend and a growing consumer awareness of health and fitness in the region. Due to the increasing popularity of plant-based products, the region’s market is anticipated to increase rapidly. In light of several food safety scandals, parents are paying closer attention to infant nutrition and the quality of milk formula. The dairy alternatives industry is anticipated to grow as disposable incomes rise and infant allergies become more widely known over the forecast period. Consumer preference for lactose-free, low-fat, and gluten-free dairy substitutes has increased due to growing health concerns.

North America is expected to boost at a CAGR of 12.25% during the forecast period. Rising consumer demand for nutrient-dense plant-based foods is anticipated to positively affect market expansion. The demand for non-dairy products like soymilk and almond milk is anticipated to rise as the number of cases of milk intolerance in North America rises. Due to the rising demand for novel plant-derived products, North America, the second-largest market for dairy alternatives, is anticipated to account for a sizeable proportion throughout the projected period. In addition, added nutritional benefits like calcium, vitamins, and enzymes are available in flavored milk, which is expected to drive market growth over the forecast period.

Europe is expected to grow significantly over the forecast period. The market for dairy substitutes is anticipated to rise due to rising consumer demand for plant-based foods with high nutritional values. Milk allergies and health issues are linked to the toxic ingredients added to dairy products, which is expected to increase demand for dairy alternatives like soymilk, almond milk, and rice milk. In place of dairy beverages, dairy alternative-based beverages are frequently consumed. The creation of new products, such as soya juice blends and fresh soy beverages, is a focus for manufacturers. The growing demand for healthy meals and beverages in the region is predicted to lead to an expansion of the dairy alternatives industry in Europe.

The Middle East and Africa's dairy alternatives market is anticipated to expand significantly over the coming years, mainly due to expanding consumer knowledge of the advantages of the products and increased demand for goods produced from plants. Due to its expanding population and growing middle class, Saudi Arabia is anticipated to be a significant market for the product. Almonds are predicted to surpass all other raw material sources utilized for manufacturing dairy alternatives over the projection period, even though soy has been experiencing increased demand for the creation of various dairy-free goods across the Middle East and Africa.

Segmental Analysis

The global dairy alternatives market is segmented by source, product, and distribution channel.

Based on the source, the dairy alternatives industry is bifurcated into soy, almond, coconut, rice, oat, and others.

The soy milk segment is the highest contributor to the market and is expected to grow at a CAGR of 11.90% during the forecast period. The market is anticipated to develop due to soymilk's nutritional advantages, namely its higher protein content than other dairy substitutes. Growing worries about lactose intolerance and milk allergies are also anticipated to affect market expansion positively. Soymilk has several health advantages, including a decreased risk of cholesterol, cancer, and obesity. Additionally, it aids in enhancing cardiovascular health and lowering the danger of several postmenopausal issues. Soymilk is a valuable addition to a plant-based diet because of its high protein level.

The market for dairy replacements' second-largest segment is almond milk. It contains a lot of vitamin B, which helps the body burn calories and fats more effectively by increasing its basal metabolic rate. Almond milk offers several nutritional advantages. Thus its demand is projected to increase as the market expands. Essential elements in almond milk, including iron, magnesium, phosphorus, zinc, and copper, aid in blood pressure regulation, improve blood oxygenation and shield the body from disease.

The market for dairy substitute ingredients like coconut is rising as customers continue to switch to a vegan and plant-based products and as health concerns about dairy allergies, high-calorie foods, high cholesterol, and lactose intolerance grow. Coconut is an excellent source of protein, lipids, manganese, vitamin C, iron, copper, potassium, and other nutrients and minerals that treat heart disease, infections, and excessive cholesterol. Additionally, the demand for coconut as a nutritional substitute may be accelerated by the expanding popularity of vegan diets and the increased focus on fitness and health.

Based on product, the dairy alternatives industry is bifurcated into milk, yogurt, ice cream, cheese, creamer, and others.

The milk segment owns the highest market share and is expected to grow at a CAGR of 12.40% during the forecast period. The demand for animal milk alternatives is anticipated to increase in the following years due to lactose intolerance cases in various parts of the world during the past few years. According to a paper on lactose intolerance published by the Gastrointestinal Society of the Canadian Society of Intestinal Research, the average global rate of lactose intolerance varies from 65-70%, indicating significant growth potential for the dairy alternatives market in the years to come. The demand for plant-based products like plant-based milk is rising due to the consumer need for more ethical awareness, diversity, and flexibility.

Due to the growing trend of eating wholesome, light foods all day long, consumers are becoming more interested in eating plant-based foods for breakfast or as between-meal snacks. Manufacturers attempted to take advantage of this chance to create innovative plant-based yogurts as breakfast items and snack options. Achieving precise pH levels or sustaining the rigorous processing conditions necessary to create yogurt to get the appropriate consistency and creaminess in the finished product using plant-based components are significant issues facing manufacturers of plant-based yogurt.

Stretch and reliability are two key traits that greatly influence cheese quality. Initial attempts to create and produce plant-based cheese using various components, including soy, almonds, and oats, failed to produce cheese with the necessary viscosity and draw. To obtain the necessary quality result in the finished product, producers of plant-based cheese have recently been focusing on utilizing alternative raw materials, including beans and nuts, for product formulation. Manufacturers should be encouraged to develop and market novel production techniques to generate specialty types of cheese as customer demand for soft, fresh, and mature cheese grows along with manufacturers' efforts to produce goods with clean label standards.

Based on distribution, the dairy alternatives industry is bifurcated into supermarkets and hypermarkets, convenience stores, online retail, and others.

The supermarket segment is the highest contributor to the market and is expected to grow at a CAGR of 11.90% during the forecast period. In the Asia-Pacific region, supermarkets and hypermarkets are predicted to grow significantly, with Vietnam, India, and the Philippines experiencing the highest CAGRs over the projected period, according to a report released by Food Industry Asia in 2020. The region's penetration of hypermarkets and supermarkets is anticipated to rise due to investments by foreign retailers seeking a foothold in the quickly expanding market, expansion by domestic retailers seeking a customer base, and growth in the purchasing power of consumers in developing economies.

Due to the specialty stores' extensive product selections within a single category, it is projected that the distribution of dairy substitutes will grow over the forecast period. They feature versatile layouts, distinctive designs, and superior product displays. Sales of dairy substitutes through specialized stores are increasing because they offer a more personalized shopping experience. Consumers are now more conscious of the importance of nutrition for overall health, which has led them to seek out specialty retailers to buy dairy alternatives that meet their specific needs.

Sales of dairy substitutes are further boosted through the online retail segment by offering benefits to customers such as price range comparisons, high brand availability, and customer reviews of the items. Additionally, the availability of many discussion portals, discounts and offers, simple payment methods, and diverse promotion strategies would support online sales of dairy substitutes. Online shopping allows customers to buy the products of their choosing on a budget without sacrificing quality, brand, or content. Consumer trust also dramatically influences the demand for particular products, and online merchants like Amazon, Walmart, and eBay increasingly depend on routine customer follow-up.

Recent Developments

• April 2022- Wicked Foods, Inc., an American company that manufactures plant-based foods, unveiled its new line of plant-based ice creams and novelty items.
• January 2022- Chobani LLC launched a new line of four-variety plant-based coffee creamers free of GMOs, artificial flavors, and sweeteners.