In recent years, the global food industry has witnessed a significant shift in consumer preferences, with a growing trend towards dairy alternatives. This transformation reflects changing attitudes towards health, sustainability, and ethical concerns. As more people choose to reduce or eliminate dairy from their diets, the demand for dairy alternatives has surged.
At a robust 10.1% CAGR, the global dairy alternatives market size is projected to reach USD 43.6 billion by 2028, up from an estimated USD 27.0 billion in 2023. In 2022, the market was valued at USD 24.6 billion. A major driver behind this growth is the increasing focus on health and wellness. Health-conscious consumers are seeking products that align with their dietary needs, and dairy alternatives such as almond, soy, and oat milk have become popular choices. These alternatives are often perceived as healthier due to their lower saturated fat content and absence of cholesterol. Moreover, many are fortified with essential vitamins and minerals, appealing to those striving for a balanced diet.
How are Dairy Alternatives Companies Responding to the Rapid Growth Of the Vegan Population?
The growth of the dairy alternatives market is primarily driven by the global shift towards vegetarian and flexitarian diets. These dietary preferences have gained significant popularity, influenced by various factors such as concerns about animal welfare, environmental issues, and personal health. Veganism has emerged as a lifestyle choice that abstains from consuming animal-derived products, including dairy. The increasing worldwide condemnation of animal cruelty has further boosted the demand for dairy substitutes. Many consumers view a vegan diet as a healthy choice and opt for dairy alternatives like soy milk, almond milk, rice milk, and other plant-based options instead of traditional dairy milk.
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Significant growth in the vegan population has been observed in major economies like the United States and the United Kingdom. Consumers in developed nations embrace plant-based milk as it offers energy, health benefits, aids in weight management, and enhances the taste of food. According to The Vegan Society, avoiding meat and dairy consumption plays a crucial role in reducing the environmental impact, particularly concerning carbon emissions. Currently, the livestock industry contributes an estimated 18% to total greenhouse gas emissions across the five major sectors for greenhouse gas reporting. Within the agricultural sector, farmed animals are responsible for nearly 80% of all emissions. This environmental concern has prompted environmentally conscious consumers to shift towards dairy alternatives.
In 2021, The Vegan Society recorded 16,439 products bearing The Vegan Trademark, with over 82% of these registrations occurring in the past five years. The Vegan Trademark is now recognized in 87 countries globally, and more than half of the registered products come from companies located outside the UK. Given the rapid growth of the vegan population, numerous dairy manufacturers are transitioning towards producing plant-based milk products, which is expected to have a positive impact on the plant-based beverages market.
Capitalizing on Europe’s Fastest-Growing CAGR: Top Strategies Companies Are Adopting
The European Union is one of the biggest dairy exporters in the world. Thus, conventional dairy has a huge share in the European market as compared to dairy alternatives. However, despite the dominance of the dairy sector in the region, a surge in the growth of the dairy and plant-based alternatives sector has been observed in recent years. Many retailers and supermarket giants are adding soy drinks and rice drinks to their product shelves as they are witnessing an increase in sales of dairy alternatives. The rise in demand for dairy-free food & beverage products that are environmentally sustainable and healthy is driving the Europe dairy alternatives market.
Consumers in the European market prioritize health, as well as demonstrate awareness of animal welfare and environmental sustainability. Consequently, they frequently scrutinize product ingredients prior to making purchases. This heightened awareness has led to an upsurge in demand for low-fat and lactose-free food options. As a result, major industry leaders are shifting their focus towards acquiring other businesses and broadening their product offerings to incorporate plant-based dairy alternatives. In 2017, French dairy player Danone acquired WhiteWave Foods, a specialist in dairy alternatives. According to Fi Global Insights 2021, Germany has recently replaced the UK as the top consumer of dairy alternatives in the region.
The Latest Advancements in Dairy Alternatives Industry
- In June 2023, Oatly Group AB (Sweden) launched a vegan cream cheese, now available nationwide in the US. This oat-based cream cheese comes in two flavors: Plain and Chive & Onion.
- In April 2021, SunOpta acquired the Dream and WestSoy plant-based beverage brands from The Hain Celestial Group, Inc. This acquisition expanded SunOpta’s product portfolio, further accelerating growth in the dairy alternatives business.
Urbanization, Dietary Diversification, and Investment: Shaping the Asia-Pacific Dairy Alternatives Industry
The Asia-Pacific region is witnessing a surge in demand for fortified nutritional food and beverages, driven by busy lifestyles and rising disposable incomes. This trend is accelerating the adoption of dairy alternatives, particularly soy milk, as consumer preferences evolve. Economic growth in the region is expected to further boost the consumption of affordable and abundant soy milk. To cater to the growing interest in healthy and pasteurized dairy substitutes, food manufacturers are diversifying their soy milk offerings with unique flavors. Additionally, rising income levels, a growing middle class, heightened health awareness, and the demand for nutritional products are creating significant growth opportunities in the Asia-Pacific dairy alternatives market.
This analysis focuses on key countries within the region, including Japan, Australia, China, and India. Major players such as Sanitarium Health & Wellbeing Company, Freedom Foods Group Ltd., Vitasoy International Holdings Limited, and PureBates are central to the expanding dairy alternatives market. The sector is rapidly evolving due to urbanization, dietary diversification, and increased foreign investment in the food industry.
Insights into the Dairy Alternatives Market Report: What You Need to Know
- What is the current size of the dairy alternatives sector?
- What are the prevailing dairy alternatives market trends?
- Are there specific insights for Oceania (New Zealand and Australia) regarding market size, key players, and growth rates?
Leading Dairy Alternatives Manufacturers
- Danone North America Public Benefit Corporation (US)
- The Hain Celestial Group, Inc. (US)
- Blue Diamond Growers (US)
- Freedom Foods Group Limited (Australia)
- Valsoia S.p.A (Italy)
- SunOpta (Canada)
- Oatly Group AB (Sweden)
- Sanitarium (New Zealand)
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