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Dairy Alternatives Market Size, Share & COVID-19 Impact 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, 2021-2028

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

 

KEY MARKET INSIGHTS

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The global dairy alternatives market size was USD 19.66 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with dairy alternatives witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 3.05% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 22.25 billion in 2021 to USD 53.97 billion in 2028 at a CAGR of 13.30% during the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.


High consumption of plant-based milk substitutes is leading to 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 dairy alternative. The sources of such alternative products are essentially legumes, nuts, or cereals which are the recognizable ingredients among most consumers from both developed and developing economies. Additionally, the evolution and improvisation in dietary lifestyles, such as veganism and flexitarians, fuel the demand for plant milk and associated products.


Disrupted Manufacturing Process and Low Labor Availability amid COVID-19 to Dampen the Growth


Despite the thriving popularity of dairy-free products, a slight decline in the market was observed in 2020. This is owing to the spread of novel coronavirus all across the world. This COVID-19 pandemic has caused the governments to impose a lockdown to vanish the community transmission among the people, affecting the operational process of several industries. Lower labor availability, the restricted capacity of workers, and hampered supply chain are the key reasons that showed lower market growth in 2020. According to the World Trade Association (WTA) 2020, the global trade scenario was hampered by 20% to 30% due to the pandemic. Further, it is expected to take up to two to three years to set up the previous trend. Thus, raw material scarcity is another factor that impedes market growth due to the pandemic. However, the market is partially getting effective as the governments of several countries are controlling the situation. Thus, it is expected that the market will exhibit decent growth during the forecast years.


LATEST TRENDS


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Emerging Veganism and Growing Inclination of Consumers towards Plant-based Foods to Boost Growth


The plant-based milk is 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 the past few years are due to the robust popularity of plant-based ingredients and increasing adoption rates for meat and dairy substitutes. From an environmental standpoint, the dairy and meat sectors are the most significant greenhouse gas emitters. Furthermore, milk and dairy commodities' water and carbon footprint is significantly higher than that of horticultural products.


DRIVING FACTORS


Growing Concerns for Processed Dairy Products is Primarily Driving the Market


The rising number of lactose-intolerant consumers primarily drives the dairy alternatives market growth. Besides, there is an increasing perception among the general consumers that lactose-free products are healthy alternatives to conventional dairy. Lactose intolerance is due to the absence of the enzyme called lactase that breaks down lactose. Nearly 65% of the human population show reduced ability to digest lactose after infancy.


Developed markets of Western Europe and North America have witnessed a remarkable fall over the past two decades in the volumetric and value-based consumption of specific dairy categories. Consumers are inclined towards plant-based alternatives, especially in the most prominent dairy products markets, due to their rising concerns 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 Market in Foreseeable Future


Dairy alternatives such as plant milk products are expected to fetch more significant dairy alternatives market share and stronger growth rates than 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 products hinges on value-added products that appeal to the nutritional and aesthetic needs of the consumers. Moreover, such products must establish effective market penetration and the economy of the scale so that they are widely available and affordable and accessible at all such points of sales where dairy products are normally marketed.


RESTRAINING FACTORS


Sub-optimal Market Penetration and Low Consumer Awareness to Lower the Sales


One of the key restraints in the plant-based milk and milk products 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 these dairy-free products are far below that of the conventional dairy products, indicating that the sensory profiles of dairy alternatives are not yet on a par with that of dairy milk and its derivatives. Moreover, some of the plant-based milk and its derivatives are very low in terms of macro and micronutrients; they are thus unable to compete with conventional dairy products in terms of nutritional content.  Soy milk naturally has a protein content similar to 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.


SEGMENTATION


By Source Analysis


Soy Segment to Exhibit Astonishing Growth Backed by Broader Availability


The market is heavily commoditized, and thus, consumers are experimenting by purchasing new and innovative products.


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 alternatives. It is rapidly gaining popularity among consumers as they avoid 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 younger consumers.


By Product Type Analysis


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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 than the non-dairy milk segment due to their popularity among consumers across all age groups. 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 projecting offerings such as healthy indulgence among consumers.


By Distribution Channel Analysis


Supermarkets/Hypermarkets to Dominate Owing to the Offerings of Novel Products


The supermarkets/hypermarkets segment is expected to hold the largest market share due 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. Plant-based products are increasingly developing their own identity. They are 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.


With its robust convenience, enhanced shopping experience, and increased digital literacy rates, the online retail segment is expected to exhibit a stronger growth rate in the market for dairy alternatives during the forecast period.


REGIONAL INSIGHTS


Asia Pacific Dairy Alternatives Market Size, 2020 (USD Billion)

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The 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 of the saturated fat levels, hormone content, and antibiotic residues found in dairy products. These can serve as a cost-effective substitute for poor economic groups belonging to developing countries. They can also be marketed in regions where cow milk supply is insufficient.


With its rapidly expanding retail market and the strain on natural resources, North America 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 due to the rising number of consumers eating more plant-based food instead of those who are adopting vegan diets.


Consumers in Europe are increasingly motivated to seek innovative plant-based products. Furthermore, the sustainability and eco-friendly aspects of plant-based products will generate more sales among the younger cohort.


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Overall, the global market is set to generate considerable market revenue in the upcoming years with effective contributions from South America, and the Middle East & Africa. The emerging trend of modernization and evolving modern trades are some of the factors expected to support the growth.


KEY INDUSTRY PLAYERS


Highly Dynamic and Moderately Consolidated Market Conditions in Global Market


The global market for dairy alternatives is moderately consolidated with the significant presence of key dairy giants. These key players are also actively embarking on acquisitions and mergers to further built up 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 this market is expected to enhance during the foreseeable years if such globally recognized players develop and offer alternatives that are 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 PROFILED:



  • Danone S.A. (Paris, France)

  • Archer-Daniels-Midland Company (Illinois, United States)

  • Blue Diamond Growers (California, United States)

  • SunOpta, Inc. (Brampton, Canada)

  • Vitasoy International Holdings Ltd (Tuen Mun, Hong Kong)

  • Daiya Food, Inc. (Burnaby, Canada)

  • Goya Foods, Inc. (New York, United States)

  • Living Harvest Foods, Inc. (Maharashtra, Pune)

  • Organic Valley (Wisconsin, United States)

  • Eden Foods, Inc. (Michigan, United States)


KEY INDUSTRY DEVELOPMENTS:



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

  • December 2019 – Perfect Day, a food-tech start-up focused on developing 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 microflora fermentation.


Report Coverage 


An Infographic Representation of Dairy Alternatives Market

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The market research report provides a detailed analysis of the market. It focuses on key aspects such as leading companies, market segmentation, dairy alternatives product types, and leading distribution channels of the product. Besides this, the report offers insights into the key market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market's growth prospects over recent years. Along with this, the market report provides an exhaustive analysis of the market dynamics and competitive scenario. Various critical insights 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



2017-2028



Base Year



2020



Forecast Period



2021-2028



Historical Period



2017-2019



Unit



Value (USD Billion)



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 (By Source, Product Type, Distribution Channel, and Country)

    • The U.S. (By Source)

    • Canada (By Source)

    • Mexico (By Source)



  • Europe (By Source, Product Type, Distribution Channel, and Country)

    • U.K. (By Source)

    • Germany (By Source)

    • Spain (By Source)

    • France (By Source)

    • Italy (By Source)

    • Russia (By Source)

    • Rest of Europe (By Source)



  • Asia Pacific (By Source, Product Type, Distribution Channel, and Country)

    • China (By Source)

    • India (By Source)

    • Japan (By Source)

    • Australia (By Source)

    • Rest of Asia Pacific (By Source)



  • South America (By Source, Product Type, Distribution Channel, and Country)

    • Brazil (By Source)

    • Argentina (By Source)

    • Rest of South America (By Source)



  • The Middle East & Africa (By Source, Product Type, Distribution Channel, and Country)

    • South Africa (By Source)

    • UAE (By Source)

    • Rest of ME&A (By Source)





Frequently Asked Questions

Fortune Business Insights says that the global consumption was USD 19.66 billion in 2020.

Exhibiting a CAGR of 13.30%, the market will experience robust growth during the forecast period.

The non-dairy milk segment is expected to be the leading segment in the market.

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

Danone S.A., Archer-Daniels-Midland Company, Blue Diamond Growers, SunOpta, Inc., and Vitasoy International Holdings Ltd. are the top players in the market.

Asia Pacific is expected to hold the highest market share in 2020.

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

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Dairy Alternatives Market Size, Share and Global Industry Trend Forecast till 2026
  • Jul, 2021
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  • 2017-2019
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