The global dairy alternatives market was valued at USD 29.18 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 12.6% from 2024 to 2030. This market expansion is fueled by evolving consumer preferences, with many shifting towards plant-based diets and embracing dairy substitutes due to rising awareness of health and environmental benefits. Additionally, a growing number of individuals are experiencing lactose intolerance or milk allergies, further boosting demand for dairy alternatives.

According to the World Health Organization (WHO), over 60% of the global population is affected by some form of milk allergy, with lactose intolerance prevalent in over 30 million American adults. The prevalence of lactose intolerance also varies across different ethnic groups, affecting around 95% of Asians, 60-80% of African Americans and Ashkenazi Jews, 80-100% of American Indians, and 50-80% of Hispanics, while individuals of Northern European descent exhibit the lowest intolerance rates, at just 2%.

As awareness around lactose intolerance and the benefits of dairy alternatives grows, food and beverage producers are increasingly incorporating these alternatives to cater to the expanding market of consumers seeking plant-based products. This trend is amplified by an increasing focus on sustainability and health-conscious lifestyles, leading to a surge in the demand for dairy-free products across the globe.

Gather more insights about the market drivers, restrains and growth of the Dairy Alternatives Market

Soy milk is gaining particular traction among older adults and female consumers in the U.S., driven by its high content of isoflavones, which have been linked to potential reductions in heart disease and breast cancer risk. Isoflavones, which act as phytoestrogens, mimic estrogen in the body, making soy milk an attractive alternative for women seeking to maintain or increase estrogen levels. This aspect is a key factor driving market growth, as more individuals turn to soy milk as an alternative therapy. In response to this demand, manufacturers are expanding their product offerings. For example, in February 2023, Milo entered the dairy alternatives market by launching "Milo Soy," a product that combines soybeans with malt derived from barley, creating a unique and nutritionally rich beverage.

Almond milk, another popular alternative, is becoming increasingly favored by health-conscious younger consumers, particularly those adhering to ketogenic and vegan diets. Almond milk's high lipid, fiber, and protein content make it a nutritious substitute for dairy milk, driving its adoption among consumers and industries alike. In May 2023, Rude Health, a U.K.-based company specializing in dairy-free products, introduced an organic almond milk with no added sugars, further catering to the rising demand for cleaner, plant-based products.

Source Segmentation Insights

The soy milk segment held the largest revenue share in 2023, accounting for 35.08% of the market, followed closely by almond milk. Soy milk’s rich content of vitamin B boosts the body’s metabolic rate, aiding in efficient fat and calorie burning, a nutritional benefit that is likely to contribute to the segment’s growth in the coming years. However, there are still challenges facing the market. For example, in several European countries, plant-based milk alternatives like soy milk are subject to significantly higher value-added taxes (VAT) compared to conventional dairy milk. In Italy, for instance, the VAT on soy milk is 450% higher than that of cow's milk, which has limited the growth of non-dairy beverages in certain regions. Nevertheless, initiatives by non-profit organizations, such as ProVeg International, aim to address these disparities and are expected to drive market growth by advocating for fairer tax treatment of dairy alternatives.

Innovations and Product Expansions

The market for dairy alternatives is witnessing rapid product innovation as manufacturers strive to stay competitive and meet evolving consumer needs. In January 2022, Danone launched "Silk Extra Creamy Almond Milk" in both original and unsweetened varieties across North America. The product was developed using a blend of three different almond types, resulting in a creamier, smoother texture, and boasts 50% more calcium than reduced-fat dairy milk, while also being cholesterol-free. This product expansion reflects the growing consumer preference for dairy-free options that are nutritious, delicious, and have enhanced texture.

In addition to soy and almond milk, other dairy alternatives such as hemp, cashew, coconut, and oat milk are gaining popularity across global markets. Hemp and cashew milks offer unique nutritional profiles, while oat milk has seen a sharp rise in consumer interest due to its creamy texture and environmental benefits. In May 2022, Oatly Inc., a leading player in the oat milk sector, launched a one-hour delivery service for its oat-based products, including oat milk and dairy-free frozen desserts, in key cities such as Los Angeles and New York. This initiative, available through popular food delivery apps, highlights how the market for dairy alternatives is adapting to consumer demand for convenience as well as healthier, more sustainable options.

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