E-News Exclusive

Dairy Alternatives Market Worth $44.89 Billion by 2027

According to a new market research report published by market intelligence provider Meticulous Research, the dairy alternatives market is expected to grow at a compound annual growth rate (CAGR) of 11.2% from 2020 to reach $44.89 billion by 2027.

The report, titled “Dairy Alternatives Market by Product Type (Plant Milk, Cheese, Yogurt, Butter, Ice Cream), Source (Almond Protein, Soy Protein, Wheat Protein), and Distribution Channel (Business to Business and Business to Customers)—Global Forecast to 2027,” covers market size, market share, forecasts, and trend analyses.

Plant-based dairy products consist of ingredients derived from plants, including vegetables, fruits, whole grains, nuts, seeds, and legumes. These ingredients differentiate them from animal-based foods because their fiber fraction comprises indigestible compounds, mainly pectin, hemicellulose, cellulose, and resistant starch. The increased intolerance of animal proteins supports the growth of this market in addition to the nutritional benefits of plant-based food, the increasing vegan population, and the venture investments in plant-based food.

Moreover, emerging economies provide significant opportunities for companies operating in the global dairy alternatives market. However, a significant preference for animal-based products and consumer preference for soy and gluten-free products are the factors expected to hinder this market's growth. The dairy alternatives market is segmented based on type, source, distribution channel, and region.

Impact of COVID-19 on the Dairy Alternatives Market
As the world continues to fear the coronavirus, the need for traditional protein options grows rapidly. North America is projected to account for the dairy alternatives industry’s largest share in the upcoming years, witnessing favorable outcomes of COVID-19 for the alternative protein food industry. The coronavirus pandemic has resulted in a sudden increase in plant-based substitutes in the United States. In addition, retail chains have prolonged shelf and storage space for dairy alternatives to cater to the growing demand.

Furthermore, the outbreak of COVID-19 and negative associations with animal-based food will boost the European alternative protein market. Numerous countries in the European region have witnessed the worst outcomes of COVID-19 in 2020 and 2021. As a result, there’s an increasing trend of veganism in Europe, which has pushed the alternative protein industry’s growth.

In the Asia-Pacific region, the demand for dairy alternatives surges as suspicion over possible links between wild animal–based products and the new coronavirus drives some consumers to rethink their diets, particularly in China. China is set to push the industry's growth, and the coronavirus and other public health fears could serve as catalysts. In the last three months, vegan and vegetarian alternatives have gained an increasing customer base. Even before the outbreak, China already was facing protein shortages due to the spread of African swine fever and its impact on pork supplies. As a result, the country has been viewed as a major growth market for faux-protein producers. This situation of the Chinese protein market already had attracted interest from leading US companies.

Nutritional Benefits of Plant-Based Dairy Driving the Growth of Dairy Alternatives
Increased urbanization, changes in lifestyles, industrialization, economic development, the health and wellness trend among consumers, and rising awareness of health concerns associated with long-term intake of animal proteins have created immense growth opportunities for manufacturers of alternative dairy products. This traction in the dairy alternatives market also is supported by food security challenges that accompany animal protein production, particularly animal agriculture’s high demand for plant foods as animal feed.

Planned vegetarian and vegan diets are nutritionally adequate for pregnant women, children, and athletes. These dairy alternative–based diets reduce risks of heart disease, type 2 diabetes, hypertension, certain cancers, and obesity. When planned well, dairy alternative–based diets are high in fiber and provide all the necessary nutrients. Vegetarians and vegans use plant-based protein sources, such as beans, legumes, nuts, seeds, soyfoods, and protein powders, for dairy alternatives.

With food security challenges, the vegan food trend is gaining traction and will continue to evoke interest in upcoming years. Therefore, food demand should increase proportionally or even more because food behaviors also are changing. In addition, food and beverage manufacturers from various countries are leveraging plants, creating new categories and disrupting old ones. Most of these countries already are committed, at various stages, to the initial nutritional transition.

Dairy Alternatives Market Overview
Meticulous Research has segmented the overall dairy alternatives market based on product type: plant-based milk (almond milk, soymilk, coconut milk, rice milk, and others); cheese, yogurt, butter, ice cream, creamer, and others; source (almond protein, soy protein, wheat protein, pea protein, rice protein, and others); distribution channel (business to business and business to customers [modern groceries, convenience store, specialty store, online retail, and others]), and geography (North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa).

The product type dominating the dairy alternatives market is the plant-based milk segment. The increasing prevalence of lactose intolerance and consumer preference for vegan diets are key factors driving the demand for plant-based milk alternatives, such as almond milk and soymilk. The plant-based yogurt segment is expected to grow at the fastest CAGR in the forecast period. The demand for plant-based yogurt is increasing at a higher rate in developed countries due to the growing number of vegan and health-conscious consumers.

The source of dairy alternatives commanding the largest share of the overall market is the almond protein segment. The large share of this segment mainly is attributed to its easy availability, lower cost than other sources, higher consumer acceptance level, and increasing application of almond protein in various plant-based dairy product categories. This segment also is expected to grow at the fastest CAGR during the forecast period.

The distribution channel dominating the overall dairy alternatives market is the business-to-customers segment. This segment also is projected to grow at the fastest CAGR during the forecast period. This is due to the rapidly growing online retail sector and rising demand for dairy alternatives from these distribution channels along with the growing urbanization and related rise in the number of supermarkets and hypermarkets.

Geographically, this research report provides a comprehensive analysis for the five major geographies: North America (United States and Canada), Europe (United Kingdom, Germany, France, Italy, Spain, and the rest of Europe), Asia-Pacific (China, Japan, India, and the rest of the Pacific Asian region), Latin America, and the Middle East and Africa. Europe commands the major share of the global dairy alternatives market. However, the Asia-Pacific region is projected to grow significantly in the forecast period. The rapid growth of this region mainly is attributed to the rising awareness of the protein-rich diet, increasing health consciousness, higher vegan and vegetarian population base, growing technological advancements in the food and beverage industry (especially in China and India), a growing economy, rapid growth in urbanization, growing middle-class population, and increasing raw material availability.

Furthermore, China is expected to dominate the Asia-Pacific dairy alternatives market through 2027, largely due to consumers’ rising disposable incomes, the massive vegetarian population, growing demand for sustainable food protein sources, and technological and economic changes. The Chinese dairy alternatives market mainly is fragmented, which is expected to create opportunities for new brands. Most major food brands in China recently have adopted a plant-based beverage strategy. Moreover, there’s an increasing preference towards processed and packaged food, meat and dairy alternatives, meals away from home, and safer food because of a greater variety of food choices. This scenario is expected to push the demand for dairy alternatives in China in the coming years.

— Source: Meticulous Research Pvt. Ltd