Report Code: 10456 | Available Format: PDF
The dairy alternatives market generated an estimated revenue of USD 30.9 billion in 2023, and it will advance at 11.2% CAGR during 2023–2030, to reach USD 65.1 billion by 2030.
Dairy alternatives contain comparable quantities of minerals and vitamins to normal dairy products, apart from lactase, an added enzyme that aids in digesting lactose, thus protecting sensitive people from lactose intolerance.
The growth of the market is primarily attributed to the changing diet trends, rising incidence of lactose intolerance and milk allergies, increasing awareness of alternatives to animal proteins, such as plant-based proteins; escalating concerns over animal cruelty, and surging disposable income. Thus, several food & beverage companies are utilizing this substitute to appeal to a growing base of customers choosing plant-based and other dairy substitutes.
There is a rising awareness among consumers of the fact that lactose-free goods are healthy substitutes to those containing traditional dairy. Developed regions, such as North America and Western Europe, have observed a significant decrease in the consumption of a few specific dairy products in the last two decades, in terms of both sales volume and value.
Consumers are also preferring plant-based substitutes because of their increasing concerns about the unscrupulous practices followed in animal husbandry. Animal farms in developing countries are especially infamous for the poor living and working conditions bovines are subject to, on account of farmers’ small capacity to spend on high-tech equipment. Stables are often unhygienic or lacking a proper roof, and the ruminants are regularly overmilked, fed a nutrient-deficient diet, or made to work long hours in scorching heat.
A key trend around the world is 100% plant-based food, or veganism. The surging need for dairy alternatives is because of the strong acceptance of plant-based dairy and meat alternatives. Moreover, plant-based food is also good from an environmental perspective, as the dairy and meat industries are major emitters of greenhouse gases. Additionally, the carbon and water footprints of milk and dairy products are significantly larger compared to that of horticultural products. Hence, the increasing focus on environmental sustainability is expected to enhance the market growth.
The soy category, based on source, led the dairy alternatives market in 2022, and it is expected to remain dominant throughout the projection period. This is primarily attributed to the growing need for products with a high zinc, calcium, iron, and vitamin content in China and India. Moreover, the surging consumption of cholesterol-free and nutrition-rich alternative dairy products will boost the demand for soy products in the U.S.
The almond category is expected to observe the fastest growth throughout the forecast period. This can be mainly credited to the high Vitamin B and E, manganese, iron, zinc, phosphorus, and copper content, low calorie count, and other nutritional benefits of almonds. These nutrients help control blood pressure, improve blood oxygenation, keep the skin healthy, and protect against diseases.
Moreover, almond-based dairy substitutes have been observing strong rates of acceptance in Europe, Australia, and North America as they are well branded and promoted stylishly to the younger generation.
The milk category, based on product type, has been the largest contributor to the dairy alternatives market in the past few years. This is attributed to the growing focus among the market players to produce milk using soy and almond, due to the strong potential for the consumption growth of vegan beverages. Soy milk remains a popular source of fiber, proteins, and omega-3 fatty acids, especially among those with lactose intolerance.
Moreover, the consumption of plant-based cheese, yogurt, and ice cream is expected to register fast growth during the projection period, because of their growing popularity among consumers of every age group. This is attributed to the rising demand for low-calorie variants of these food products.
Based on distribution channel, the supermarkets and hypermarkets category generated the highest revenue in 2022. This can be mainly attributed to the one-stop solution offered by these retail outlets, which makes them an ideal shopping option for customers. Supermarkets and hypermarkets are large retail outlets that provide various types of products under one roof.
Always a prominent aspect of the daily life in developed countries, these places are becoming popular in emerging economies, such as China, South Korea, and India, as well. Further, many overseas supermarket chains are entering the regional countries, which is expanding people’s access to dairy alternatives.
The online distribution channel is likely to observe the fastest growth during the projection period, mainly because of the speedy adoption of smartphones and the internet. Moreover, the online purchase of products is highly convenient for consumers as it eliminates store visits and consumes less time. Additionally, e-commerce website allow people to see and compare various products and brands, read product reviews, avail of special discounts, pay electronically, and have their groceries delivered at their homes.
Market Size in 2023
USD 30.9 Billion (E)
Revenue Forecast in 2030
USD 65.1 Billion
Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Impact of COVID-19; Companies’ Strategic Developments; Market Share Analysis of Key Players; Company Profiling
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APAC led the dairy alternatives market in 2022, owing to the swift urbanization, increasing consciousness regarding the benefits of a protein-rich diet, rising population of the middle class, and its increasing income. Moreover, dairy alternatives are low in cholesterol, fat, and calories, thus appealing to vegan, lactose-intolerant, and health-conscious consumers.
As per the World Population Review, lactose intolerance is extremely common across Asian countries, particularly in East Asia, where 70–100% of the people might have it. Individuals suffering from this disorder have extremely sensitive stomachs and are recommended to not consume dairy products and switch to products derived from plants.
The North American market is expected to observe significant growth, mainly because of the increasing number of consumers of plant-based food. For instance, as per the Plant Based Foods Association, 70% of the overall population in the U.S. consumed plant-based foods in 2022, which was 4% more from 2021.
Moreover, because of the strain on natural resources and the swiftly expanding retail market in the region, the utilization of plant-based options, which have an important role in offering food and nutritional security, is likely to grow. Additionally, since such ultra-processed food is expensive, the high disposable income makes North America a lucrative market.
Europe is also likely to observe substantial growth in the consumption of dairy alternatives during the projection period, because of the surging need for healthy foods and beverages in the continent. Alternative-dairy drinks are rapidly becoming popular in the region; thus businesses are concentrating on the production of fresh soy drinks, soy juice mixes, and flavored almond milk.
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