Dairy Alternatives Market Size, Share & Trends Analysis Report By Source (Soy, Almond, Coconut, Rice, Oats, Others), By Product (Milk, Yogurt, Cheese, Ice-cream, Creamers, Others), By Distribution Channel, And Segment Forecasts, 2024 - 2030

Dairy Alternatives Market Size & Trends

The global dairy alternatives market size was valued at USD 29.18 billion in 2023 and is anticipated to grow at a CAGR of 12.6% from 2024 to 2030. The market is gaining momentum and witnessing high demand due to changing consumer eating patterns and diet trends. Rising cases of milk allergies and lactose intolerance are expected to increase demand for dairy alternatives in the coming years. Over 60% of the world's population has some level of milk allergy, according to the World Health Organization. More than 30 million American adults are lactose intolerant. Primary lactose intolerance seems to have a genetic component, with high intolerance levels in specific populations: About 95% of Asians, 60-80% of African Americans and Ashkenazi Jews, 80-100% of American Indians, and 50-80% of Hispanics. Lactose intolerance is least common among people of northern European origin, with a prevalence of only about 2%. Many food and beverage products are using these alternatives to appeal to the growing number of consumers choosing plant-based and other dairy substitutes.

Soy milk is gaining popularity among elderly and female consumers in the U.S. due to its isoflavones, which may reduce heart disease and breast cancer risk. Soy contains phytoestrogen, which acts like estrogen. Women use soy milk as an alternative therapy to increase estrogen levels, likely driving market growth.A wide range of manufacturers are planning on expanding their product portfolios to maintain their dominance in the dairy alternatives industry. For instance, in February 2023, Milo introduced "Milo Soy," marking its entry into this category. This innovative offering blends the advantages of soybeans with malt derived from barley, resulting in a unique beverage.

Almond milk is becoming popular among health-conscious youth following ketogenic and vegan diets. Due to its high lipids, fiber, and protein content, it's a nutritious dairy substitute. It's expected to see high adoption by consumers and industries.Also, in May 2023, Rude Health, a U.K.-based brand specializing in dairy-free alternatives and breakfast cereals, introduced organic almond milk, which does not have any added sugars.

Consumer demand for low-calorie, high-protein, vitamin-rich foods has grown during the COVID-19 pandemic. This has led many global consumers to switch to dairy alternatives. The pandemic has also increased the popularity of the vegan diet as more people adopt plant-based foods, boosting dairy alternative sales worldwide.

Market Concentration & Characteristics

Manufacturers are fortifying dairy alternative products with essential nutrients like vitamins, minerals, and protein to match the nutrition of traditional dairy products.

Market players like ADM, the Hain Celestial Group, Inc., Eden Foods, Inc., and Earth's Own Food Company Inc. are engaging in mergers and acquisitions. These M&A activities allow companies to expand geographically and enter new markets.

Regulatory bodies establish nutritional standards for dairy alternatives to ensure they meet essential nutrient criteria. This prevents misleading claims and ensures consumers have access to nutritionally adequate products.

Product substitutes for dairy alternatives include milk substitutes, yogurt substitutes, ice cream substitutes, and others. These offer options for people with dietary restrictions, lactose intolerance, or those following plant-based diets.

Source Insights

The soy segment had a revenue share of 35.08% in 2023 succeeded by almond milk. It's rich in Vitamin B, which raises the body's metabolic rate, helping burn fats and calories efficiently. This nutritional benefit may contribute to market growth. According to ProVeg’s report on the environmental cost of dairy compared to plant-based alternatives, the VAT on alternative milk beverages is significantly higher than that of conventional milk in six countries across Europe, including Italy, Greece, Austria, Slovakia, Spain, and Germany. In Italy, soymilk has a VAT rate of 450% higher than cow milk which has restricted the growth of non-dairy beverages in the recent past. However, initiatives taken by non-profit organizations, along with ProVeg international’s initiative on ending unfair VAT on dairy alternatives, are expected to boost market growth over the forecast period.

In January 2022, Danone launched Silk Extra Creamy Almond milk, in original and unsweetened variation in North America. The new plant-based milk is made with a blend of three different kinds of almonds to create an enhanced silky and smooth texture. It contains zero cholesterol and 50% more calcium than reduced-fat milk.

Other dairy alternatives, such as hemp, cashew, coconut milk, and oat milk, are becoming popular globally. In May 2022, Oatly Inc. launched a one-hour delivery of a selection of its best-selling oat-based products, including oat milk and frozen non-dairy dessert pints and novelties, in Los Angeles and New York City through popular food delivery apps.

Product Insights

The milk segment had the largest revenue share in 2023. Beverage manufacturers are introducing new products for higher market capitalization. Growing consumer demand for varied beverage options has led to diverse flavored beverages made with dairy alternatives. These flavored beverages appeal to lactose-intolerant consumers seeking variety in milk-based dairy alternative drinks.

In June 2023, Marks and Spencer (M&S) introduced a dairy-free milk substitute packaged in cartons resembling traditional containers of cow's milk. These oat-based beverages are part of the company’s vegan Plant Kitchen collection and are offered in both semi-skimmed and whole versions, mirroring the options available with dairy milk. Priced at approximately USD 2.5 per liter, these bottles are enriched with essential nutrients, including calcium, iodine, vitamin D, and vitamin B12. Europe's growing elderly population prefers milk-based dairy alternatives. However, health concerns about soymilk, especially for breast cancer survivors, may slow market growth.

Non-dairy yogurt is the ideal source of probiotics for vegan consumers and lactose-intolerant populations worldwide. Most yogurt brands are entering the non-dairy yogurt market by launching plant-sourced yogurts produced from soy, almond, and coconut. The increasing number of product launches and new entrants in the market is anticipated to boost the growth of dairy alternative yogurts worldwide. For instance, in July 2023, German dairy brand Müller launched vegan yogurt and rice puddings in the U.K.

Distribution Channel Insights

The supermarkets and hypermarkets segment led the market in 2023. These are large retail outlets offering multiple product categories. For accessibility, supermarkets are usually near residential areas. Due to land scarcity, many chains are opening new stores outside cities.

Supermarkets and hypermarkets are more prevalent in developed regions like Europe and North America than in developing regions. The wide variety of products available in one place and ease of buying contributed to their market dominance in 2023.

Due to low-volume procurement, convenience stores offer lower discounts than hypermarkets, supermarkets, and online stores. They focus on everyday items, and limited shelf space restricts their assortment of dairy alternatives.

The limited availability of dairy alternative brands in convenience stores leads consumers to prefer other distribution channels, potentially restraining this segment's growth. However, convenience stores offer better traction for fresh milk, which consumers prefer for daily use.   

Regional Insights

North America is a major market for dairy alternative products, with a high consumption of products like ice cream and yogurt. Flavored milk makes up over two-thirds of milk products sold in North American schools. Growing demand for sweetened flavored soy and almond milk is likely to drive the industry.

Asian-American and Hispanic populations in the region are observed to be more prone to lactose intolerance problems, which is expected to drive the demand for dairy alternatives over the forecast period. Rising consumer awareness regarding a healthy lifestyle coupled with growing demand for lactose-free products, including cheese, yogurt, and ice cream, is expected to drive the product demand over the forecast period.

U.S. Dairy Alternatives Market Trends

In the U.S., milk-based dairy alternatives are used in various food items and desserts, expected to drive industry growth. While dairy alternative-based ice cream has moderate demand compared to milk-based ice cream, this category is expected to grow faster over the forecast period.The Dairy Farmers of America, which represents more than 30% of the milk producers in the United States revealed that a drop in milk sales resulted in a $1.45 decrease in the average milk price on account of the rise of soy, oat, nut, and other milk alternatives at grocery stores, coffee shops, and others across the country.

Europe Dairy Alternative Market Trends

The dairy alternatives market in Europe is expected to grow substantially due to rising demand for healthy foods and beverages. Dairy alternative-based beverages are often used as substitutes for dairy drinks. More than 20% of Germans said they are in favor of paying premium prices for non-dairy ice creams. Responding to strong consumer demand, the share of dairy alternative launches has increased significantly in the recent past owing to the rise in the number of patients with lactose intolerance. Manufacturers in the region are focusing on new product development, including soy juice mixes and fresh soy drinks.The declining consumption of dairy-based products among children coupled with the rising popularity of flavored dairy-free beverages is expected to attract young customers over the coming years. Players like Mercadona S.A., Dr Schär España SL, and Danone S.A. provide a wide range of lactose-free and gluten-free products to attract lactose-intolerant consumers in the region.

Asia Pacific Dairy Alternatives Market Trends

Asia Pacific led the global dairy alternatives market in 2023. According to China CDC data, more than 90% of Asians have lactose deficiency. In addition, the use of vegan labeling claims on packages increased by 440% in the last few years. The demand for plant-based foods remained intact in the initial phases of the coronavirus pandemic on account of their high shelf life and nutritional content compared to cow milk.

Key Dairy Alternatives Company Insights

The market is highly competitive, with prominent, well-established players holding a large share in 2023. These manufacturers have a strong market presence and can serve local and international markets. They have a broad clientele base within and outside their countries.

Key success factors for industry participants in the coming years are expected to be new product development in food & beverages and the creation of alternatives to milk-based products. For example, Hershey Trust Company's brand Sofit is customized for Indian customers, offering a Kesar Pista flavor. Similar variations exist across companies developing products for increased market penetration.

Most dairy alternative manufacturers are vertically integrated through established processes in the end-user phase of the value chain. Many manufacturers produce food products containing dairy alternatives and beverages using alternatives like almond or soy milk.

The manufacturing process for dairy alternatives doesn't require highly complex technology, making it easier for new entrants to join the industry. This has led to high market competitiveness with moderate to high rivalry among competitors seeking to capitalize on growing opportunities in dairy alternatives during the forecast period.

Recent Developments

• In July 2023, Ripple Foods introduced Ripple Kids Unsweetened Original Milk, a sugar-free alternative to their Kids Original Milk. The updated formulation delivers 8 grams of plant-based pea protein, a 50 mg dosage of omega-3 fatty acids, prebiotics, choline, and a higher calcium content per serving than conventional milk. This offering caters to individuals in search of a hassle-free dairy-free alternative devoid of added sugars.

• In June 2023, Oatly Inc. introduced plant-based cream cheese in the U.S. The plant-based cream cheese is available in two flavors: Chive & Onion and Plain Cream Cheese. This innovative offering from Oatly captures the tangy and savory taste of conventional cream cheese without using any dairy ingredients.

• In February 2023, Blue Diamond announced that it is capitalizing on the growing demand for plant-based foods with the launch of three campaigns for three products—Snack Almonds, Almond Breeze almond milk, and Almond Flour. The move signifies an increased investment to showcase the benefits of almonds in new ways. The Snack Almonds campaign highlights the diverse snacking possibilities with catchy jingles and varied package sizes. The Almond Breeze campaign emphasizes almond milk's versatility and taste. These ads will air on linear TV, social media, and online platforms.

• In January 2023, Oatly Inc., established a strategic hybrid partnership with Toronto-based Ya YA Foods Corporation, a key player in contract manufacturing of aseptic food and beverage items. This collaborative endeavor will have a primary focus on North America. In this distinct partnership, Oatly will uphold its proprietary oat base production within its facilities located in UT, Ogden, and Fort Worth, TX. Following this, the oat base will be conveyed to Ya YA Foods for co-packaging into Oatly products at both locations. This cooperative approach enhances the manufacturing process.

Major Deals & Alliances

• In August 2023, Chobani launched pumpkin-flavored ready-to-drink oats milk.

• In July 2023, Müller launched plant-based yogurts and rice pudding in the U.K.

• In June 2023, Dairyland launched soy-based vegan ice creams in Kenya.

• In June 2023, Oatly launched vegan cheese cream across the U.S.

• In May 2023, Häagen-Dazs launched oat milk based vegan ice cream in Canada.

• In April 2023, NotCo collaborated with Burger King to launch veggie menu across Latin America.

Dairy Alternatives Market Report Scope

Global Dairy Alternatives Market Report Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the global dairy alternatives market report on the basis of source, product, distribution channel, and region:

• Source Outlook (Revenue in USD Million, 2018 - 2030)

  • Soy

  • Almond

  • Coconut

  • Rice

  • Oats

  • Others

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • Milk

  • Yogurt

  • Cheese

  • Ice cream

  • Creamer

  • Others

• Distribution Channel Outlook (Revenue, USD Million; 2018 - 2030)

  • Supermarket & Hypermarkets

  • Convenience Stores

  • Online retail

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

  • Central & South America

    • Brazil

  • Middle East & Africa

    • South Africa