Dairy Milk Alternative Market Is Experiencing A 'Holy Cow!' Moment

The non-dairy segment started out as an alternative category catering to those with food allergies, but it has since evolved beyond a trend, now over 90% of U.S. households drink traditional dairy milk, but consumption is declining - consumers have reduced from 10 glasses of milk per week to 8 glasses. Plant-based dairy alternatives are displaying 6% better returns than traditional dairy products. In Britain, for example, 25% of people are choosing plant-based milk.

There’s one more reason people are jumping ship from dairy to plant-based alternatives. In the face of the climate crisis, it can’t be ignored that the impact of animal agriculture raises a number of issues for sustainability. Considering the fact that meat and dairy together use 83% of the world’s farmland and produce 60% of agriculture’s greenhouse gas emissions while supplying only 18% of calories and 37% of the protein consumed by humans, a group of researchers at Oxford concluded last year that 'A vegan diet is probably the single biggest way to reduce your impact on planet Earth, not just greenhouse gases, but global acidification, eutrophication, land use, and water use.’

Sales of plant-based dairy alternative beverages, especially almond milk, show no signs of slowing, and new alternative sources, such as coconut and cashews, are expected to drive the alternative segment even faster and higher over the next several years. Lactose Intolerance condition is most common in Finland, where it affects an estimated 1 in 60,000 new-borns. Approximately 60% of the human population has a reduced ability to digest lactose after infancy.

There is little doubt that the Coronavirus (COVID-19) pandemic is affecting every aspect of people’s lives—from virtual classrooms to telecommuting to early restaurant closing times to outright quarantines. Observing public health measures and reducing exposure to the virus are required to slow the spread of this disease.  However, in many countries, panic buying is taking place, leaving shelves empty of what some consider to be essential items. Toilet rolls, soap, painkillers, pasta, and canned goods are among those in short supply, along with some alternatives to milk products. This also extends to long-life dairy alternative products, which are also being snapped up in some places.

The milk alternative surged in U.S. sales by 477% during the week ending March 14 compared to the same period last year—one of the biggest increases of any food product. During ordinary times, this increase might seem to have been caused by the milk alternative’s trendiness. But during a pandemic, consumers might have had more practical concerns. Oat milk is shelf-stable—which means that consumers can keep it in their homes longer.

Another major reason for the increase in the sale of dairy alternatives is the disruption in the supply of milk in many countries across the world. The disruption to supply chains due to coronavirus is causing tonnes of fresh produce to be wasted in the U.S. Despite food shortages for dairy produce, the Dairy Farmers of America has had to ask farmers to dump their milk. The disruption to supply chains means that farmers are unable to get their products to market. The short shelf life and perishable nature of dairy products mean the effects of coronavirus have hit them harder, and faster, than other agricultural industries.

Goldstein Research analyst forecast the Dairy Alternative Market size is set to reach from USD 17.6 billion to USD 22.8 billion by 2024, at a CAGR of 13.2% over the forecast years.

On the basis of source, almond milk is leading the dairy alternative market with a 60% market share and is likely to be the customer’s first preference in the forecast period as well.

However, rice milk, nut-based milk, and coconut milk are in a growing phase due to the low cholesterol concentration and fat content in dairy alternative beverages. Coconut milk is the fastest growing dairy alternative, registering the CAGR of 15.25% over the forecast period.

Based on geography, Asia Pacific dominated the dairy alternative market with a market share of 41% in 2016. China is the largest consumer of soy milk in the APAC region owing to the increase in lactose intolerance, milk allergy, and awareness about the nutritional values of plant-based dairy alternatives.