Dairy Alternatives Market Size, Share, Growth & Industry Analysis, By Source (Soy, Almond, Coconut, Rice, Oats, Hemp, Others), By Product (Milk, Yogurt, Ice Cream, Cheese, Creamer, Others), By Distribution Channel (Supermarkets/Hypermarkets, Convenience Stores, Online, Others) and Regional Analysis, 2024-2031

Dairy Alternatives Market Size

The global dairy alternatives market size was valued at USD 25 billion in 2023 and is projected to reach USD 53 billion by 2031, exhibiting a CAGR of 11.8% during the forecast period, driven by a combined push generated from growing health consciousness, dietary shifts, and rising environmental concerns.

A high prevalence of lactose intolerance and milk allergies is a major factor contributing to the increased demand for plant-based dairy products. Many people are lactose intolerant or allergic to milk. This drives up the demand for dairy alternatives. Studies show that over 65% of the world is lactose intolerant. This drives consumers to seek alternatives like almond, soy, and oat milk. This health-driven shift has spurred significant market growth.

This surge is driven by a demand for healthier food, the rise of veganism, and better product formulas. The market includes various plant-based products. These are almond milk, soy milk, oat milk, and coconut milk. Beverages make up a large part of total revenue. The rise in sustainability and animal welfare drives market growth. Consumers opt for dairy alternatives that match these values. As flavors, textures, and nutrition improve, the market is expected to grow over the forecast period.

Dairy Alternatives Market Trends

Three major trends are shaping the dairy alternatives market. There is a growing preference for clean-label products:

• Innovative formulations are rapidly developing
• Plant-based protein sources are expanding
• Consumers are becoming more conscious of ingredients,

This is expected to increase demand for clean-label products with fewer additives and preservatives. This trend is evident as brands focus on transparent labeling and natural ingredients. The second trend is product innovation. Manufacturers are constantly improving the texture, taste, and nutrition of plant-based dairy alternatives.

Fortified milk alternatives and better yogurt and cheese are now popular. Lastly, the diversification of plant-based protein sources is gaining traction. Beyond soy and almond, new nutritious and versatile alternatives like oat, pea, and cashew-based milk alternatives are gaining a sizeable market share. These trends show a shift to sustainable, health-conscious consumption. They drive a worldwide interest in and adoption of milk alternatives.

Dairy Alternatives Market Growth Factors 

Several key growth factors are propelling the expansion of the dairy alternatives market. A growing awareness of health, especially about lactose intolerance and milk allergies, is driving consumers to adopt healthier alternatives. Lactose intolerance affects over 65% of the world's population. This has spiked demand for dairy-free products.

The rise of veganism and flexitarian diets is another key factor. More people want plant-based options for ethical, environmental, and health reasons. Also, rising awareness of sustainability is shifting consumers to eco-friendly products. Dairy farming is often linked to high greenhouse gas emissions and water use. The rise of dairy alternatives is boosting the market supported by their increasing availability in online and specialty stores. The market is expected to grow in the next few year due to rising R&D investments in better products and marketing campaigns.

Segmentation Analysis

The dairy alternatives market is segmented by Source, Product, and Distribution Channel. Each category shapes the market's growth and consumer preferences.

By Source

The market is driven by various plant-based sources, key ones being soy, almond, coconut, oat, and rice. Soy-based alternatives have a big market share. They are high in protein and widely used in milk and yogurt. Almond milk is popular, especially in North America and Europe, especially for its smooth texture and low calories. Oat-based products, especially drinks, are growing fast. They are creamy and lactose-free, and therefore, preferred by health-conscious consumers. As consumers seek new options, new alternatives like  pea protein and cashew are gaining popularity.

By Product

The dairy alternatives market has five categories: milk, yogurt, cheese, ice cream, and creamer. Milk alternatives dominated the market, making over 50% of the revenue in 2023. This is due to the rising demand for plant-based drinks. Yogurt alternatives are also growing fast. Consumers prefer probiotic-rich options. Almond and coconut yogurt lead the segment. Cheese alternatives are gaining traction, especially in vegan and flexitarian diets. This is due to their better taste and texture. The ice cream segment is growing fast. Brands are launching many plant-based flavors to please health-conscious and indulgent consumers.

By Distribution Channel

The dairy alternatives market has been segmented into supermarkets, online platforms, specialty stores, and others. In 2023, supermarkets and hypermarkets held nearly 60% of the market. They are the main distribution channel, due to their wide product range and convenience. Online platforms are a key growth area, especially post-pandemic. Their CAGR is projected to be over 12% from 2024 to 2031. Meanwhile, specialty stores, with their curated plant-based options, attract niche consumers seeking premium products.

Dairy Alternatives Market Regional Analysis

The dairy alternatives market is diverse by region. Key markets are North America, Europe, Asia-Pacific, and Latin America. North America is a leading region in the dairy alternatives market as lactose intolerance is common in the region and vegan and flexitarian diets are gaining popularity. NIH estimates that 30-50% of U.S. adults are lactose intolerant. In 2023, the US held nearly USD 8 billion in market revenue with almond milk and oat milk being the most popular products.

Europe is another key market where countries like Germany, the UK, and France are rapidly adopting plant-based diets. The European market is expected to grow steadily with stringent food labeling rules and a demand for sustainable products. In the Asia-Pacific, markets like China, Japan, and India are growing fast. This is due to a rising urban population and higher disposable incomes. China has a large lactose-intolerant population.

Therefore, the rise in consumer health awareness is driving the demand for dairy alternatives. The region is projected to achieve a CAGR of over 13% from 2024 to 2031. Latin America and the Middle East are emerging markets. Western diets and a focus on health are driving this growth. The global dairy alternatives market should grow in all regions. Both mature and emerging markets will support this growth.

Competitive Landscape 

The dairy alternatives market is highly competitive. Both established brands and newcomers are vying for market share. Danone, Blue Diamond Growers, and Oatly have boosted their market presence with new products and expansions. For example, Danone's plant-based yogurts and milk alternatives have boosted its market position. At the same time, new brands are gaining traction. They are introducing innovative products with unique flavors and health benefits. The market is seeing more mergers and acquisitions. Key players want to improve their products and expand their reach. This competition will drive constant innovation and growth in the market.

List of Key Players in Dairy Alternatives Market

• Hain Celestial
• SunOpta Inc
• Danone
• Oatly AB
• Vitasoy International Holdings Limited
• DAIYA FOODS INC.
• ADM
• Blue Diamond Growers
• Melt Organic
• Living Harvest Foods Inc.
• Ripple Foods

Key Industry Developments

Several recent developments highlight the growing momentum in the dairy alternatives market:

• In 2023, Blue Diamond Growers' almond milk sales rose by 15% due to introduction of new flavors and fortified varieties.
• Oatly Group AB opened a new facility in Texas to meet rising North American demand. This facility will boost company production by 25%.
• In 2024, Danone announced a USD 50 million investment in its plant-based products. this investment will be focused on improving texture and nutrient profiles of its popular dairy alternatives.

These developments reflect a rise in consumer interest in dairy alternatives and signal strong market growth in the coming years.

The global Dairy Alternatives Market is segmented as:

By Source

• Soy
• Almond
• Coconut
• Rice
• Oats
• Hemp
• Others

By Product

• Milk
• Yogurt
• Ice Cream
• Cheese
• Creamer
• Others

By Distribution Channel

• Supermarkets/Hypermarkets
• Convenience Stores
• Online
• Others

By Region

• North America
• U.S.
• Canada
• Mexico
• Europe
• Germany
• UK
• France
• Italy
• Spain
• Russia
• Rest of Europe
• Asia-Pacific
• China
• Japan
• India
• South Korea
• Rest of Asia-Pacific
• Middle East & Africa
• GCC
• South Africa
• North America
• Rest of Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America