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Dairy Alternatives Market Size, Share & Industry Analysis, By Source (Soy, Almond, Coconut, Rice, Oats, and Others), Product Type (Non-dairy Milk, Butter, Cheeses, Yogurts, Ice Cream, and Others), Distribution Channel (Supermarkets/Hypermarkets, Convenience Stores, Online Retail, and Others), and Regional Forecasts, 2019 – 2026

Region : Global | Format: PDF | Report ID: FBI100221

 

KEY MARKET INSIGHTS

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Plant-based milk substitutes are leading the recent surge in demand for non-dairy products. Vegan milk is a suspension of dissolved and disintegrated plant extracts in water as a base. Homogenization and thermal treatments are the two processing techniques that are majorly utilized to improve the suspension and stability of such plant-derived products.


Vegan milk, which has occupied the center stage in the non-dairy sector is intensively marketed as a healthy, sustainable, and animal-welfare-friendly alternative. The sources of such dairy alternatives are essentially legumes, nuts, or cereals which are the recognizable ingredients among the majority of consumers from both developed and developing economies. Additionally, the evolution and improvisation in dietary lifestyles, such as veganism and flexitarianism are also fueling the demand for plant milk and associated products.


The plant-based milk is in fact, not a novel processed food category on its own – some of the key giants, such as Oatly or Alpro have launched such products in Europe in the 1980s.  The recent surge and the dynamic growth in recent years are due to the robust popularity of plant-based ingredients and increasing adaptation rates for meat and dairy substitutes. From an environmental standpoint, the dairy and meat sectors are the most significant greenhouse gas emitters. Furthermore, the water and carbon footprint for milk and dairy commodities is significantly higher than that of the horticultural products.


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One of the key restraints in the dairy alternatives market is the organoleptic profiles of such novel products. Processors usually encounter challenges with solubility issues and taste while developing non-dairy products. The repeated purchase rates for dairy alternatives are far below that of the conventional dairy products, indicating that the sensory profiles of milk alternatives are not yet on a par with that of dairy milk and its derivatives. Moreover, some of the plant-based milk and their derivatives are very low in terms of both macro and micronutrients; they are thus unable to compete with the conventional dairy products in terms of nutritional content.  Soy milk naturally has protein content similar to the cow’s milk. Almond milk which is one of the most popular non-dairy options contains only 1 gram of protein per 8 ounces of a cup.


MARKET DRIVERS


“Growing Concerns for Processed Dairy Products is Primarily Driving the Market of Dairy Alternatives”


The dairy alternatives market growth is primarily driven by lactose-intolerant consumers. Besides, there is an increasing perception among the general consumers that lactose-free products are the healthy alternatives to conventional dairy. The intolerance towards lactose (a sugar found in milk) is because of the absence of the enzyme called lactase that breaks down lactose. Almost 65 percent of the human population exhibit reduced ability to digest lactose after infancy.


Developed markets of North America and Western Europe have showcased remarkable decline in the volumetric and value-based consumption of specific dairy categories over the past two decades. Consumers, especially in the most prominent markets of dairy products, are inclining towards plant-based alternatives owing to the worries over allergens, hormones, and unethical animal husbandry practices prevalent in the dairy sector. The production of dairy products has significant environmental impacts that contribute to soil degradation, air and water pollution, and consequent loss of biodiversity.


“Product Innovation and Wider Reach to Ensure Success for Dairy Alternatives in Foreseeable Future”


Plant milk and milk products are expected to fetch more significant dairy alternatives market share and stronger growth rates as compared to the conventional dairy counterparts in the years to come as veganism is set to go mainstream. The growing preference for flexitarian, vegetarian, and vegan food lifestyles would further push the sales of plant-based dairy substitutes. This trend, coupled with the ever-increasing issues of health, animal welfare, and environmental impacts, may constraint the revenue performance of the dairy sector. The sustainable growth trajectory of dairy alternatives hinges on value-added products that appeal to the nutritional and aesthetic needs of the consumers. Moreover, such products must establish effective market penetration along with the economy of the scale so that they are not only widely available and affordable but are also accessible at all such points of sales where dairy products are normally marketed.


SEGMENTATION


By Source Analysis


“Soy Segment to Exhibit Astonishing Growth Backed by Broader Availability”


The milk market is heavily commoditized and thus, consumers are experimenting by purchasing new and innovative dairy alternatives. Soy milk has been a clear leader in terms of the source owing to its broader availability in the Asia Pacific market, particularly in China. Nonetheless, almond milk will witness faster growth amongst all the other sources of dairy alternative. It is rapidly gaining popularity among the consumers as they are avoiding soy due to allergies or other health concerns associated with the products. Almond milk is low in calories and recently, almond-based non-dairy products are witnessing stronger acceptance rates in North America, Europe, and Australian beverage markets. These products are also well branded and marketed in a sophisticated manner, particularly appealing to the younger consumers.


By Product Type Analysis


“Non-dairy Milk Segment to Lead Owing to Favorable Demand Dynamics”


The non-dairy revolution began with the development of milk alternatives. The segment is still dominating the global marketplace owing to the favorable demand dynamics, increasing interest among the key giants and private-label players to develop milk from plant-based sources, and strong growth potential for vegan beverages. However, segments, such as vegan ice-cream, cheese, and yogurt would showcase faster growth rates as compared to the non-dairy milk segment owing to their popularity among consumers across all the age-groups.


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The foodservice sector is rapidly evolving in terms of its product offerings and claims, namely, ‘non-dairy,’ ‘vegan,’ ‘plant-based,’ and ‘natural’ are experiencing considerable consumer attention. The appeal of vegan foods has now gone far beyond the vegan consumers, along with the compelling plant-based label claims that are projecting offerings such as ‘healthy-indulgence’ among consumers.


By Distribution Channel Analysis


“Supermarkets/Hypermarkets Segment to Dominate the Market; Online Retail Segment to Witness Fastest Growth”


Mass merchandisers, i.e. supermarkets/hypermarkets, are leading and holding the largest market share in terms of distribution channels owing to their proximity, accessibility, and affordability. There is a dedicated retail shelf for vegan and plant-based products coupled with the attractive discounts offered to entice the consumers and increase the adaptation rates among them. Plant-based products are increasingly developing their own identity. They are thus, undergoing a remarkable transition from their traditional image of being an alternative to meat or dairy. These products have successfully moved to the convenience space and consumers are finding them easy to store, prepare, and eat. The online retail segment with its robust convenience, enhanced shopping experience, and increased digital literacy rates is expected to exhibit stronger growth rate during the forecast period.


REGIONAL ANALYSIS


“Asia Pacific Dairy Alternatives Market is a Leading Region; It is also projected to Witness Fastest Growth.”


The dairy alternatives market in Asia Pacific is driven by a marked increase in the reported cases of cow milk allergy and lactose intolerance. Additionally, the calorie concerns and higher prevalence of hypercholesterolemia and obesity have made consumers shift to vegan diets, thereby adopting cow milk alternatives. Enlightened consumers are becoming highly critical about the saturated fat levels, hormone content, and antibiotic residues found in the dairy products. Dairy alternatives can serve as an inexpensive substitute for poor economic groups belonging to the developing countries. They can also be marketed in the regions where cow milk supply is insufficient.


Asia Pacific Market Size (by Value), 2018

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Asia Pacific, with its rapidly expanding population and the strain on natural resources, is expected to utilize more plant-based options that have a vital role to play in providing food and nutritional security. Consumers in the region are well-informed about the plethora of dairy substitutes which are also readily available than ever before. The regional market will witness growth owing to the rising number of consumers eating more plant-based food and not because of those who are adopting vegan diets. Consumers are increasingly motivated to seek innovative plant-based products. Furthermore, the concerns regarding the sustainability and eco-friendly aspects of plant-based products will generate more sales among the younger cohort. Overall, the region is set to generate a considerable dairy alternatives market revenue in the coming years.


KEY INDUSTRY PLAYERS


“Highly Dynamic and Moderately Consolidated Market Conditions in Global Dairy Alternatives Space”


The global dairy alternatives market is moderately consolidated with the significant presence of key dairy giants. These players are also actively embarking on acquisitions and mergers to further strengthen their position and make a decisive shift to ensure their future growth amidst a decline in the popularity of dairy products. For instance, Danone S.A., a French multinational food-products corporation, recently acquired several leading plant-based brands, such as Silk, Vega, and Alpro to strengthen its vegan products portfolio. The competitive intensity of the market is expected to enhance during the foreseeable years if such globally recognized players develop and offer dairy alternatives that are not only nutritionally adequate and environmentally sound, but also economical and acceptable. At the same time, they are constantly trying to keep up with the dairy substitutes market trends to create more products.


LIST OF KEY COMPANIES COVERED:



Report Coverage 


Dairy alternatives are witnessing rapid growth in sales amidst the rising awareness of lactose intolerance. Consumers are increasingly seeking out for vegan options to conventional dairy products, thereby giving the much-needed thrust to manufacturers that develop substitutes from rice, almond, soy, coconut, hazelnut, and other non-animal products. Whole Foods notes that in the U.S., “around 87% of Americans consume plant-based proteins and nearly two-thirds do so once a week or more often”. According to the Proceedings of the National Academy of Sciences of the United States of America (PNAS), transitioning toward more plant-based diets that are in line with the standard dietary guidelines could reduce global mortality by 6–10% and food-related greenhouse gas emissions by anywhere between 29–70% as compared to a reference scenario in 2050. The plant-based revolution is here to stay with the growing number of consumers adapting their dietary practices to the changing habits and issues spanning healthy eating, sustainability, and ethical choices.


The report also provides qualitative and quantitative insights on the dairy alternatives market along with a detailed analysis of the market size and growth rates for all possible segments in the market.  


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Along with this, the dairy alternatives market report provides an exhaustive analysis of the market dynamics and competitive scenario. Various critical insights presented in the report are the overview of related markets, recent developments such as mergers & acquisitions, the regulatory situation in prominent countries, and key industry trends.


Report Scope & Segmentation











































 ATTRIBUTE



 DETAILS



Study Period



  2015-2026



Base Year



  2018



Forecast Period



  2019-2026



Historical Period



  2015-2017



Unit



  Value (USD Million)



Segmentation



By Source



  • Soy

  • Almond

  • Coconut

  • Rice

  • Oats

  • Others



By Product Type



  • Non-dairy Milk

  • Butter

  • Cheeses

  • Yogurts



  • Ice Cream

  • Others



By Distribution Channel



  • Supermarkets/Hypermarkets

  • Convenience stores

  • Online Retail

  • Others



By Region



  • North America (U.S., Canada, and Mexico)

  • Europe (Germany, France, U.K., Italy, Spain, U.K., and Rest of Europe)

  • Asia Pacific (China, India, Japan, Australia, and the Rest of Asia Pacific)

  • South America (Brazil, Argentina, and Rest of South America)

  • Middle East & Africa (South Africa, UAE, and Rest of the Middle East & Africa)



 INDUSTRY DEVELOPMENTS:



  • In January 2020, Nestle S.A. announced that it would be launching GoodNes chocolate oat milk, the first non-dairy product line under the company’s Nesquik brand. This new product development has taken a cue from the recent trends of consumers seeking for plant-based options with more protein and less sugar.

  • In January 2020, Starbucks announced that they would be offering two new non-dairy drinks that use plant-based milk alternatives. The two products are almond milk honey flat white and coconut milk latte.

  • In December 2019, Perfect Day, a food-tech start-up focused on the development of dairy-free products, raised a fund of USD 140 million. Since its inception, the firm has been developing and scaling a method for producing functional protein through the fermentation of microflora.

  • In Oct 2019, Saputo Dairy U.K. announced the launch of its new Vitalite dairy-free alternatives range as the company aims to make significant strides in the free-from market.

  • In April 2019, Canadian dairy processor Saputo completed its acquisition of Cathedral City and Clover Owner Dairy Crest, in a deal worth 975 million pounds.

  • In July 2019, Danone North America expanded its non-dairy portfolio in the U.S. with a new line of oat milk yogurt alternatives.


Frequently Asked Questions

Fortune Business Insights says that the global consumption of dairy alternatives was USD 12.08 billion in 2018 and is projected to reach USD 25.12 billion by 2026.

Exhibiting a CAGR of 9.79%, this market will exhibit robust growth in the forecast period (2019-2026)

Non-dairy milk segment is expected to be the leading segment in the dairy alternative market.

Growing awareness among the consumers regarding the health benefits of dairy alternatives and the increasing number of cases of lactose-intolerance around the globe are the key factors driving the dairy alternatives market growth.

Danone S.A., the Whitewaves Food Company, Blue Diamond Growers, SunOpta, Inc., and Vitasoy International Holdings Ltd. are the top players in the dairy alternatives market.

North America is expected to hold the highest dairy alternatives market share in 2019.

Robust popularity of innovative dairy alternatives, increasing investments by key dairy companies, organizations, and angel investors, and strong popularity of veganism and flexitarian diets are the dairy alternatives market trends.

Dairy Alternatives Market Size, Share and Global Industry Trend Forecast till 2026
  • Feb, 2020
  • 2018
  • 2015-2017
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