The dairy alternatives market has experienced significant growth in recent years as more consumers are seeking plant-based alternatives to traditional dairy products. Dairy alternatives are non-dairy products that are used as substitutes for milk, cheese, butter, yogurt, and other dairy-based products. These alternatives are typically made from plant sources such as soy, almond, coconut, rice, oats, and hemp, among others.
The dairy alternatives market is expected to grow substantially in the years to come, reaching a market value of $44.8 billion in 2027, up from $27.3 billion in 2022, with a 10.4% CAGR from 2022 to 2027.
Factors Driving the Growth:
Increasing Health Consciousness: Growing awareness about the health benefits associated with plant-based diets and the rising prevalence of lactose intolerance and milk allergies are driving the demand for dairy alternatives. Many consumers are choosing dairy-free options to improve their overall health and well-being.
Rise of Veganism and Vegetarianism: The increasing adoption of vegan and vegetarian lifestyles, driven by ethical, environmental, and health concerns, has propelled the demand for dairy alternatives. Plant-based diets are gaining popularity, and consumers are looking for plant-based alternatives to dairy products.
Product Innovation and Availability: Manufacturers are constantly developing new and improved dairy alternative products, expanding the options available to consumers. This includes innovative formulations, flavors, and packaging formats. The growing availability of dairy alternatives in supermarkets, health food stores, and online platforms has also contributed to market growth.
Environmental Sustainability: The dairy industry is associated with significant environmental impacts, such as greenhouse gas emissions and water usage. Concerns over sustainability have led consumers to seek environmentally friendly alternatives, and plant-based dairy alternatives are perceived as more sustainable options.
Asia Pacific’s growth is attributed to the increasing demand for natural products that offer health benefits. The demand for dairy alternatives is increasing in the region due to the changing lifestyles of consumers and preference for dairy-free food & beverage products. Presence of major economies such as China and India is contributing to the growth of the market in the region. Chinese companies mostly export soy protein ingredients to Europe and Southeast Asia. The increasing purchasing power of consumers due to economic development in China has led to rising demand for high-quality dairy substitutes.
Dairy Alternatives Market Growth Dynamics
How growth of dairy alternatives closely related to nutritional benefits offered by plant-based dairy alternatives?
The nutritional benefits such as reduced cholesterol levels, improved cardiovascular health, and diabetes control of plant-based dairy alternatives have led to an increase in their consumption. Soy milk is widely consumed as a rich source of omega-3 fatty acids, protein, and fiber. It contains isoflavones that have anti-estrogenic and anticancer properties. Dairy-alternative milks tend to have fewer calories, less fat (except for coconut-based milk), more water content (for better hydration), and some products are fortified with other vitamins and nutrients. The low carb and low-fat varieties of dairy alternatives help reduce fat. Such nutritional benefits contribute to the growth of the dairy alternatives market.
Why is allergy concerns among consumers of soy products a critical restraining factor that is holding back growth of market of dairy alternatives?
Incidences of food allergies and intolerances have been witnessed for centuries. However, in recent years, the prevalence of food allergies has increased and has become a great concern for consumers and food manufacturers. According to the Food Allergy Research & Education Organization (US), soy is among the top eight major food allergens responsible for most of the serious food allergy reactions in the US. Soybeans are rich in nutrient content, such as vitamins, minerals, isoflavones, and proteins; however, anti-nutritional components in soy could cause health issues, such as soy allergy (which could also lead to itching and hives in people). Other symptoms include gas, bloating, and low levels of irritation of the intestinal tissue. These factors are expected to restrain the dairy alternatives market during the forecast period, as soy protein is one of the major sources used to produce dairy alternatives.
What opportunities does changes in lifestyles of consumers open up for companies?
The global population is growing, putting more pressure on scarce resources. High energy prices and rising raw material costs impact food prices, thus affecting low-income consumers. The pressure on the food supply is being exacerbated by a water shortage, particularly across Africa and Northern Asia. Asia Pacific also provides a cost advantage in terms of production and processing. High demand, coupled with the low cost of production, is a key feature that will aid dairy alternatives suppliers and manufacturers target this market.
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