The dairy alternatives sector encompasses products that are 100% plant-based, made from nuts, seeds or grains, which replace dairy-based products in the form of beverages, spreads, ice cream, yoghurt and other ready-made food products. Once in aisles mostly frequented by consumers with lactose intolerances or milk protein allergies, today, plant-based options have become mainstream as more consumers pursue healthier lifestyles, seek to reduce their ecological footprint – or simply discover they really like the taste.

Compared to just 10 years ago, consumers in a growing number of markets are now relatively spoiled for choices, with new dairy-free products coming onto shelves each year. At the same time, consumer expectations around taste, texture, ingredients, nutrition, provenance and overall ecological footprint are also increasing. 

Global shift towards more healthful and purposeful eating

Some studies estimate that as much as 65% of the global population has a reduced ability to digest lactose after infancy. Lactose intolerance is most prevalent in people of East Asian descent, affecting more than 90% of adults in some of these communities. Lactose intolerance is also very common in people of West African, Arab, Jewish, Greek, and Italian descent. This intolerance most often occurs because our bodies produce less lactase – the enzyme required to break down the lactose sugar in milk – as we move away from milk as the primary source of nutrition. In many cultures this occurs already in early childhood and can result in digestion problems. Others have milk protein intolerance or suffer from a milk allergy – the latter involves the immune system and can be life-threatening. And some people avoid dairy products to minimize their exposure to steroids or hormones.

Globally, more people are adopting flexitarian eating habits, vegetarianism or vegan diets as a response to concerns about the ecological footprint of some foods. This has increased interest in plant-based beverages. Soy and pea drinks, for example, deliver high protein, which is key as more consumers make this shift. Pea-based beverages, in fact, have even more protein per glass than cow’s milk. And in some markets, these types of drinks are more affordable than traditional cow’s milk. And because most people need two or three servings of dairy (or dairy alternative) every day, this is a dietary matter that consumers cannot simply brush aside. Combined, these factors are driving the growth seen in this dynamic sector.

A walk down the plant-based beverage aisle

The tremendous variety in this sector is manifest in the numerous products made from nuts, seeds and grains, such as: soy, coconut, cashew, macadamia, hemp, quinoa, barley, flax and pea. Many of these drinks are highly nutritious and fortified with calcium and vitamin D. The most common are:

• Soy drink: a high-protein liquid made from ground cooked soybeans; typically fortified and used as a milk alternative; has roughly the same protein per cup as cow’s milk
• Almond drink: a plant-based drinkmanufactured from almonds; contains no cholesterol or lactose
• Rice drink: a grain-based drinkmade from rice (typically brown); mostly sold unsweetened
• Oat drink: a liquid made from oats; used as a milk alternative, cooking ingredient and beverage

Getting into that shopping basket

Culture and the economy play vital roles in the development and spread of plant-based beverage consumption. According to research organization, Zenith Global, “soy drinks”, which are well established in Asia, continued to dominate the global category throughout 2018 – representing about 50% of the global volume. Almond drinks followed at 26%, and are expected to greatly increase in popularity over the next five years, particularly in Western countries. In fact, almond overtook soy drinks as the best-selling plant-based milk alternative in the U.S. in 2013. In Asia Pacific, more new products are utilizing value added ingredients (e.g. collagen, amino acids or charcoal) and emphasizing free-from attributes (e.g. soy-free, nut-free, preservative-free, GMO-free or sugar-free). This shift is driven largely by an increased focus on healthy diet and the fact that more households have disposable income.

As seen throughout the food sector, cross-over formats are also gaining in popularity. For example, granola cereal in the form of granola bars or yoghurt, traditionally eaten from a container with a spoon, is now often sold in ready-to-drink (RTD) containers, including probiotic, dairy-free alternatives. The RTD option is ideal for active consumers who might be traveling to work, on their way to the gym or looking for a quick snack between meals. And while the growth opportunities in the dairy alternatives beverage sector are tremendous, consumer expectations have never been higher. When it comes to plant-based yoghurt products, Euromonitor International recommends manufacturers: 

Supporting customers with big ambitions with full process integration

The dairy alternatives market in China is well established – in large part due to high lactose intolerance among the population as well as a marked rise in veganism. Soy still dominates the market thanks to its superior high protein content and is being sold more and more often as a packaged product versus fresh, particularly as demand for convenience increases. Demands for clearly labeled ingredients from sustainable sources, followed up by sustainable and high-quality manufacturing processes, are also on the rise.