In recent years, the global food industry has witnessed a significant shift in consumer preferences, with a growing trend towards dairy alternatives. This transformation reflects changing attitudes towards health, sustainability, and ethical concerns. As more people choose to reduce or eliminate dairy from their diets, the demand for dairy alternatives has surged.
At a robust 10.1% CAGR, the global dairy
alternatives market value is projected to reach USD 43.6 billion by
2028, up from an estimated USD 27.0 billion in 2023. In 2022, the market was
valued at USD 24.6 billion. A major driver behind this growth is the increasing
focus on health and wellness. Health-conscious consumers are seeking products
that align with their dietary needs, and dairy alternatives such as almond,
soy, and oat milk have become popular choices. These alternatives are often
perceived as healthier due to their lower saturated fat content and absence of
cholesterol. Moreover, many are fortified with essential vitamins and minerals,
appealing to those striving for a balanced diet.
How are Dairy
Alternatives Manufacturers Responding to the Rapid Growth Of the Vegan
Population?
The growth of the dairy alternatives market is primarily
driven by the global shift towards vegetarian and flexitarian diets. These
dietary preferences have gained significant popularity, influenced by various
factors such as concerns about animal welfare, environmental issues, and
personal health. Veganism has emerged as a lifestyle choice that abstains from
consuming animal-derived products, including dairy. The increasing worldwide
condemnation of animal cruelty has further boosted the demand for dairy substitutes.
Many consumers view a vegan diet as a healthy choice and opt for dairy
alternatives like soy milk, almond milk, rice milk, and other plant-based
options instead of traditional dairy milk.
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Significant growth in the vegan population has been observed
in major economies like the United States and the United Kingdom. Consumers in
developed nations embrace plant-based milk as it offers energy, health
benefits, aids in weight management, and enhances the taste of food. According
to The Vegan Society, avoiding meat and dairy consumption plays a crucial role
in reducing the environmental impact, particularly concerning carbon emissions.
Currently, the livestock industry contributes an estimated 18% to total
greenhouse gas emissions across the five major sectors for greenhouse gas
reporting. Within the agricultural sector, farmed animals are responsible for
nearly 80% of all emissions. This environmental concern has prompted
environmentally conscious consumers to shift towards dairy alternatives.
In 2021, The Vegan Society recorded 16,439 products bearing
The Vegan Trademark, with over 82% of these registrations occurring in the past
five years. The Vegan Trademark is now recognized in 87 countries globally, and
more than half of the registered products come from companies located outside
the UK. Given the rapid growth of the vegan population, numerous dairy
manufacturers are transitioning towards producing plant-based milk products,
which is expected to have a positive impact on the plant-based
beverages market.
What strategies are companies adopting to capitalize on
the fastest-growing CAGR in Europe?
The European Union is one of the biggest dairy exporters in
the world. Thus, conventional dairy has a huge share in the European market as
compared to dairy alternatives. However, despite the dominance of the dairy
sector in the region, a surge in the growth of the dairy and plant-based
alternatives sector has been observed in recent years. Many retailers and
supermarket giants are adding soy drinks and rice drinks to their product
shelves as they are witnessing an increase in sales of dairy alternatives. The
rise in demand for dairy-free food & beverage products that are
environmentally sustainable and healthy is driving the Europe
dairy alternatives market.
Consumers in the European market prioritize health, as well
as demonstrate awareness of animal welfare and environmental sustainability.
Consequently, they frequently scrutinize product ingredients prior to making
purchases. This heightened awareness has led to an upsurge in demand for
low-fat and lactose-free food options. As a result, major industry leaders are
shifting their focus towards acquiring other businesses and broadening their
product offerings to incorporate plant-based dairy
alternatives. In 2017, French dairy player Danone acquired WhiteWave
Foods, a specialist in dairy alternatives. According to Fi Global Insights
2021, Germany has recently replaced the UK as the top consumer of dairy
alternatives in the region.
What’s New in the Dairy
Alternatives Industry?
- In
June 2023, Oatly Group AB (Sweden) launched a vegan cream cheese, now
available nationwide in the US. This oat-based cream cheese comes in two
flavors: Plain and Chive & Onion.
- In
April 2021, SunOpta acquired the Dream and WestSoy plant-based beverage
brands from The Hain Celestial Group, Inc. This acquisition expanded
SunOpta’s product portfolio, further accelerating growth in the dairy
alternatives business.
Urbanization, Dietary Diversification, and Investment:
Shaping the Asia-Pacific
Dairy Alternatives Industry
The Asia-Pacific region is
witnessing a surge in demand for fortified nutritional food and beverages,
driven by busy lifestyles and rising disposable incomes. This trend is
accelerating the adoption of dairy alternatives, particularly soy milk, as
consumer preferences evolve. Economic growth in the region is expected to
further boost the consumption of affordable and abundant soy milk. To cater to
the growing interest in healthy and pasteurized dairy substitutes, food
manufacturers are diversifying their soy milk offerings with unique flavors. Additionally,
rising income levels, a growing middle class, heightened health awareness, and
the demand for nutritional products are creating significant growth
opportunities in the Asia-Pacific
dairy alternatives market.
This analysis focuses on key
countries within the region, including Japan, Australia, China, and India.
Major players such as Sanitarium Health & Wellbeing Company, Freedom Foods
Group Ltd., Vitasoy International Holdings Limited, and PureBates are central
to the expanding dairy alternatives market. The sector is rapidly evolving due
to urbanization, dietary diversification, and increased foreign investment in
the food industry.
Insights into the Dairy
Alternatives Market Report: What You Need to Know
- What
is the current size of the dairy alternatives sector?
- What
are the prevailing dairy
alternatives market trends?
- Are
there specific insights for Oceania (New Zealand and Australia) regarding
market size, key players, and growth rates?
Leading Dairy Alternatives Manufacturers
- Danone
North America Public Benefit Corporation (US)
- The
Hain Celestial Group, Inc. (US)
- Blue
Diamond Growers (US)
- Freedom
Foods Group Limited (Australia)
- Valsoia
S.p.A (Italy)
- SunOpta
(Canada)
- Oatly
Group AB (Sweden)
- Sanitarium
(New Zealand)
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