April 13, 2024

Dairy Alternative Market Poised to Grow at a CAGR of 10% by 2030

The dairy alternative market is growing rapidly due to rising preference for plant-based products and lactose intolerance across the globe. Dairy alternative products such as plant-based milk, cheese, butter, and yogurt are substantially growing in popularity as they are similar to conventional dairy products in appearance, texture and taste, yet healthier and more eco-friendly. Non-dairy products provide a protein-rich alternative to those who want to limit or avoid animal products. The Global Dairy Alternative Market is estimated to be valued at US$ 27.0 Bn in 2024 and is expected to exhibit a CAGR of 10% over the forecast period from 2023 to 2030.

Key Takeaways

Key players operating in the dairy alternative market are Danone North America Public Benefit Corporation (US), The Hain Celestial Group, Inc. (US), Blue Diamond Growers (US), SunOpta (Canada), Sanitarium (New Zealand). With the growing population of health and environmentally conscious consumers, demand for plant-based dairy alternatives is increasing rapidly. Several key players are launching innovative dairy-free products and expanding their product portfolio as well as global footprint to cater to the rising demand. The dairy alternative industry is witnessing substantial growth across global markets, especially in Asia Pacific and European regions due to implementation of stringent regulations over the animal welfare and availability of various plant-based substitutes.

Growing demand in market

The global dairy alternative market is driven by the rising lactose intolerance, veganism as well as growing health and environment concerns among consumers regarding dairy products. Younger demographic especially millennials show high preference for plant-based products and many opt for dairy alternatives. With theCovid-19 pandemic, the plant-based food sector has witnessed significant surge in demand as people became more health conscious. Plant milk sales increased significantly in last few years and are likely to dominate non-dairy milk category.

Global expansion of market

Geographically, Europe currently dominates the global dairy alternative industry due to high vegan and vegetarian population as well as stringent rules against dairy farming. However, Asia Pacific region is expected to be the fastest growing market attributed to rising health awareness, lactose intolerance, and expanding retail channels in developing countries like China and India. Many key players are focusing on these emerging markets through partnerships with local players and by introducing customized product offerings. North America also presents lucrative opportunities for dairy alternative companies driven by tech-savvy, flexitarian demographics and increasing vegan population.

Market key trends

One of the key trends witnessed in the dairy alternative market is the introduction of innovative product varieties. Earlier soy, almond and coconut dominated non-dairy milks category but now a variety of plant-based milks made from ingredients like walnuts, cashews, rice, hemp, oat, pea and flax are available. Likewise, plant-based cheese and yogurt options are also available in different flavors to provide rich taste and texture to consumers. Plant-based food companies are investing heavily in research and development (R&D) to enhance the taste, mouthfeel and nutritional profile of new age dairy alternatives.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate as it requires high capital and long term investment to build processing plants and distribution channels. Bargaining power of buyers: The bargaining power of buyers is high as the market offers wide choices of products from different companies. Bargaining power of suppliers: The bargaining power of suppliers is moderate as key raw materials like almonds, soy, oats are easily available from different suppliers globally. Threat of new substitutes: The threat of new substitutes is high as meat, eggs and other dairy products can replace dairy alternative products. Competitive rivalry: The competitive rivalry is high as the market sees head to head competition between key players.

North America dominates the dairy alternative market in terms of value. According to the data, the region accounted for more than 40% market share in 2020 owing to increasing consumption of plant-based milk, yogurt and cheese. Rising health and wellness trends as well as lactose intolerance are some of the key factors driving growth.

Asia Pacific region is expected to be the fastest growing market during the forecast period. Increasing awareness about vegan lifestyle and animal welfare are compelling consumers to opt for dairy free options. Countries like China, India and Japan are witnessing strong demand. Rapid urbanization and improving economic conditions in Asia present huge untapped opportunities in this space.