Dive Brief:
- The global dairy alternatives market is predicted to grow to $21.7 billion by 2022, expanding at a CAGR of 13.3% from 2016 to 2022, according to a new report from Allied Market Research.
- The dominant region generating dairy alternative sales was Asia-Pacific, followed by North America. Allied expects Asia-Pacific to continue to lead the global market in the forecast period, due mainly to demand spikes in China and India.
- Large retail is the top distribution channel with a 55% market share in 2015. But Allied expects online retail to be the fastest-growing channel because of its ability to provide a wider range of products, flavors and formulations, in addition to lower prices and convenient delivery.
Dive Insight:
Dairy alternatives' distribution via major retailers demonstrates the increasingly mainstream embrace of these products. No longer relegated to health food stores, dairy alternatives could contribute to further destabilization of the traditional dairy market.
While dairy alternatives are common in both food and beverage, Allied anticipates beverage to boost sales faster. That includes milk shakes, energy drinks and fruit mixed drinks made with soy, almond, coconut or other alternative dairy ingredients. Soy milk has long dominated this segment, but nut milks, such as almond and cashew, are starting to take over some of soy milk's market share.
But the food segment is just as ripe for plant-based dairy innovation, especially in the spreads segment, which offers a lower level of saturated fats compared to traditional dairy, according to Allied. Plant-based yogurts are also becoming more popular, as WhiteWave and its acquirer Danone can attest. Alternative dairy-based yogurt may also eventually be a part of General Mills' yogurt overhaul. That's especially considering its venture arm 301 Inc.'s investments in products like plant-based dairy producer Kite Hill.