Dairy Alternatives Market Size, Share, Forecast, & Trends Analysis by Product Type (Plant-Based Milk, Cheese, Yogurt, Ice-cream), Source (Almond, Soy, Pea, Oat), Formulation (Unflavored, Flavored), Distribution Channel (B2B, B2C) - Global Forecast to 2031

Dairy Alternatives Market Size & Forecast

The Dairy Alternatives Market is expected to reach $73.95 billion by 2031, at a CAGR of 11.1% from 2024 to 2031. The growth of this market can be attributed to several factors, including the increasing lactose intolerance, increasing vegan and vegetarian population, nutritional benefits offered by plant-based dairy products, growing investments in dairy alternatives marketspace, and the growing focus on animal welfare and sustainability. Moreover, consumers’ increasing inclination toward plant-based diets and emerging economies are expected to offer growth opportunities for the players operating in this market.

Dairy Alternatives Market Growth Drivers

Increasing Prevalence of Lactose Intolerance

The globe is registering an increasing prevalence of food allergies and intolerance for animal proteins. Among these food allergies noted across the globe, dairy products, such as animal milk and its by-products, are considered one of the key food allergies. Lactose intolerance is the inability of the body to digest lactose, the sugar present in milk. Lactose intolerance can be symptomatic or asymptomatic. In symptomatic populations, lactose intolerance can lead to diarrhea and stomach pain.

Further, according to the National Institutes of Health (NIH), lactose intolerance among adults is most common in East Asians, affecting 70–100% of the population. Encyclopedia Britannica adds that the condition affects 75 to 90% of Native American, African, Asian, Mediterranean, and Jewish populations. Only about 5% of Northern and Central Europeans have lactose intolerance. With the high prevalence of lactose intolerance and allergies to cow milk, many consumers across the globe are switching to vegan diets, reducing milk consumption, which, in turn, is driving the growth of the dairy alternatives market.

Increasing Vegan and Vegetarian Population

In recent years, there has been rapid growth in vegetarianism and veganism due to consumers’ increasing health & environmental awareness and compassion for animals. Moreover, vegan diets are generating interest among consumers. According to The Vegan Society, in 2023, approximately 700,000 people participated in the Veganuary campaign, wherein people only eat vegan foods during January. In comparison, there were 692,000 participants in 2022, 582,000 participants in 2021, and 400,000 participants in 2020.

The demand for plant-based and cruelty-free foods has increased globally due to rising environmental awareness and compassion for animals. For instance, according to the Plant Based Foods Association and The Good Food Institute, from SPINS data, in 2021, the U.S. retail sales of plant-based foods increased to 6.2% from 2020, and the total plant-based market was valued at USD 7.4 billion. Thus, increasing vegetarianism and veganism are expected to boost the demand for dairy alternatives, driving the growth of this market.

Dairy Alternatives Market Trends

Rising Awareness of Health and Wellness

Well-being is becoming a global movement as consumers seek to ensure healthy lives for as long as possible—particularly as average life spans continue to rise. Diets and lifestyles have changed rapidly due to industrialization, urbanization, economic development, and globalization over the last decade, with a significant impact on the health and nutritional status of populations globally.

Moreover, growing health awareness has increased the demand for food products that support better health, especially low-fat and cholesterol, protein-rich, and weight-control products. As a result, the number of foodstuffs containing plant proteins has grown distinctly in recent years. The soy, almond, oat, and coconut alternatives are gaining popularity due to their associated health benefits, further supporting the growth of the market.

Agreement, Collaboration, and Partnerships in the Dairy Alternatives Market

In the dairy alternatives market, companies are engaging in agreements, collaborations, and partnerships to drive growth, innovation, and market expansion. For instance, in 2023, Oatly Group AB (Sweden), in collaboration with Coffee Fellows (Germany), made its Oatly Barista available in 275 locations of Coffee Fellows across Germany, Austria, Belgium, Luxembourg, and the Netherlands. Also, in 2023, Oatly announced a new U.S. retail distribution agreement with Meijer (U.S.), known for “one-stop” shopping. Chilled oatmilk will be available at all 265 Meijer locations. Further, in 2023, SunOpta (Canada) partnered with BellRing Brands (U.S.) to establish SunOpta’s footprint in nutritional beverages. Moreover, in 2021, Saputo Inc. (Canada) acquired Bute Island Foods Ltd. (U.K.), a manufacturer, marketer, and distributor of a variety of dairy alternative cheese products.

Thus, increasing agreements, collaborations, and partnerships in the dairy alternative industry is driving the growth of the market.

Dairy Alternatives Market Opportunity

Consumers’ Increasing Inclination Toward Plant-Based Diets

There is a rising demand for plant-based diets due to various factors, including health, environmental concerns, and a desire to protect animals. According to a survey by Amy's Kitchen, 52% of Americans are "vegan-curious," with 55% citing health as their primary reason for considering a plant-based diet.

According to the Academy of Nutrition and Dietetics, suitably planned vegetarian, including vegan diets, are healthful and nutritionally acceptable. They decrease the danger of certain ailments, including ischemic heart disease, Type 2 diabetes, hypertension, certain types of cancer, and obesity. These diets are suitable for all life cycle stages, including pregnancy, lactation, infancy, childhood, adolescence, older adulthood, and athletes. Thus, the growing demand for plant-based diets provides significant opportunities for manufacturers operating in this market.

Dairy Alternatives Market Analysis: Key Findings

By Product Type: In 2024, the Plant-based Milk Segment to Dominate the Dairy Alternatives Market

Based on product type, the dairy alternatives market is segmented into plant-based milk, cheese, yogurt, butter, ice-cream, creamer, and other dairy alternatives. In 2024, the plant-based milk segment is expected to account for the largest share of 69.9% of the dairy alternatives market. The large market share of this segment can be attributed to the increasing prevalence of lactose intolerance and hypercholesterolemia prevalence, consumer preference for vegan diets, increasing health & environmental concerns, and nutritional benefits offered by plant-based milk. The easy availability of plant-based milk with various flavors is further escalating the market growth.

However, the yogurt segment is projected to witness the highest growth rate of 12.3% during the forecast period of 2024–2031. This growth is driven by the rising demand for plant-based yogurts from developed countries due to the growing number of vegan and health-conscious consumers. The plant-based yogurt is associated with various benefits, such as being lower in saturated fat and cholesterol, high in fiber, and rich in proteins, vitamins, minerals, and antioxidants further expected to boost the market growth significantly in the next few years.

By Source: In 2024, the Almond Segment to Dominate the Dairy Alternatives Market

Based on source, the dairy alternatives market is segmented into almond, soy, wheat, pea, rice, oat, and other sources. In 2024, the almond segment is expected to account for the largest share of the dairy alternatives market. The large market share can be attributed to its easy availability, high nutrition value, higher consumer acceptance level, and increasing application of almond protein in various plant-based dairy product categories. The production of almond ingredients generally has a lower environmental impact compared to dairy ingredients, as it requires less water and produces fewer greenhouse gas emissions. This segment is projected to register the fastest CAGR during the forecast period due to the rising preference for almond protein-based milk globally.

By Formulation: In 2024, the Unflavored Segment to Dominate the Dairy Alternatives Market

Based on formulation, the dairy alternatives market is segmented into unflavored and flavored dairy alternatives. In 2024, the unflavored segment is expected to account for the larger share of the dairy alternatives market. The large market share of this segment can be attributed to the increasing consumer demand for low-added sugars, artificial flavors, and preservatives. The variety of unflavored plant-based dairy alternatives is used as milk substitute products in culinary applications, further supporting the growth of the market.

However, the flavored segment is projected to witness a higher growth rate during the forecast period of 2024–2031. This growth is driven by the changing lifestyle, shifting consumer taste preferences, and increasing demand for ready-to-drink beverages.

By Distribution Channel: The Business-to-Consumer Segment to Witness Highest Demand During the Forecast Period

Based on distribution channel, the dairy alternatives market is segmented into business-to-business and business-to-consumer. In 2024, the business-to-consumer segment is expected to account for the larger share of the dairy alternatives market. The large market share of this segment can be attributed to the growing number of supermarkets and hypermarkets and increased overall product sales from these outlets; consumers' preference for shopping from brick-and-mortar grocers due to easy access and availability; and increasing consumer expenses on vegan food products, especially dairy alternatives. This segment is also projected to grow at the fastest CAGR during the forecast period due to the rapidly growing online retail sector and rising demand for dairy alternatives from these distribution channels with the growing urbanization and related rise in the number of supermarkets and hypermarkets.

Geographical Analysis

Based on geography, the global dairy alternative market is majorly segmented into five regions: North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, Asia-Pacific is expected to account for the largest share of 45.1% of the dairy alternatives market, followed by North America and Europe. Moreover, this region is also slated to register the highest growth rate during the forecast period. Asia-Pacific's significant market share and highest growth can be attributed to several key factors, including the region’s rising population, growing health-conscious population, increasing spending on health and wellbeing, rising popularity of Western diets, high presence of vegan & vegetarian population, and growing adoption of advanced technologies in the F&B industry.

Additionally, China is expected to account for the largest share of 45.4% of the dairy alternative market in Asia-Pacific, followed by India and Japan.

Dairy Alternatives Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the dairy alternatives market are Danone S.A. (France), Hain Celestial Group, Inc. (U.S.), Sahmyook Foods (South Korea), Sanitarium Health and Wellbeing Company (Australia), Axiom Foods, Inc. (U.S.), Daiya Foods, Inc. (A Part of Otsuka Pharmaceutical Co., Ltd.) (Canada), Earth’s Own Food Company Inc. (Canada), SunOpta Inc. (Canada), Valsoia S.p.A. (Italy), Plamil Foods Ltd. (U.K.), Nestlé S.A. (Switzerland), Oatly Group AB (Sweden), Sunrise Soy Foods (Canada), Miyoko's Creamery (U.S.), and Blue Diamond Growers (U.S.).

Dairy Alternatives Industry Overview: Latest Developments from Key Industry Players

• In April 2024, Alpine Bio (formerly Nobell Foods, Inc.) received a new U.S. patent for dairy alternatives containing plant-expressed recombinant casein proteins.

• In April 2024, Blue Diamond Growers (U.S.) formed a licensee partnership with Kagome Co., Ltd. (Japan) for the production and distribution of its Almond Breeze brand of almond milk in Japan.

• In March 2024, Ogglygood Global Oy (Finland) launched its plant-based Dreamy Desserts & Flavoured Barista Oat Drinks in partnership with Asda Stores Limited (U.K.), a supermarket chain in the U.K.
• In March 2024, Coop Cooperative (Switzerland) partnered with Kern Tec GmbH (Austria) & Emmi Schweiz AG (Switzerland) to offer milk made from apricot kernels.
• In March 2024, Oatly Group AB (Sweden) partnered with Barry’s (U.S.), a boutique fitness brand, to launch its Unsweetened Oatmilk in fitness studios across the U.S.

Dairy Alternatives Market Research Summary:

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