Dairy Alternatives Market size was valued at USD 29 billion in 2023 and is set to reach USD 122.1 billion by the end of 2036, growing at a CAGR of 13% during the forecast timeline, i.e., 2024-2036. In 2024, the industry size of dairy alternatives is assessed at USD 34.2 billion.
The market expansion is attributed to the increasing consumer demand for plant-based products due to health, environmental, and ethical considerations. The Plant Based Foods Association and the Good Food Institute reported that in 2021, plant-based food retail sales in the U.S. grew by 6.2%. Many consumers are shifting towards plant-based diets to manage lactose intolerance, reduce cholesterol intake, and avoid hormones and antibiotics found in conventional dairy products.
The environmental impact of dairy farming, including greenhouse gas emissions, water usage, and land requirements, is driving consumers to seek more sustainable alternatives. Dairy accounts for 2.9% of all human-induced greenhouse gas emissions. Furthermore, dairy production in intensive farming systems pollutes the air and water and contributes significantly to soil degradation and deforestation. Concerns about animal welfare and the treatment of dairy animals are also prompting more people to explore plant-based options.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
13% |
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Base Year Market Size (2023) |
USD 29 billion |
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Forecast Year Market Size (2036) |
USD 122.1 billion |
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Regional Scope |
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Product (Milk, Ice Cream, Yogurt, Cheese, Creamers, Butter)
Milk segment is poised to capture around 69.1% dairy alternatives market share by the end of 2036. Increasing health consciousness is driving consumers towards plant-based milk alternatives such as almond, soy, oat, and rice milk. These options are often seen as healthier alternatives to dairy milk due to lower cholesterol, lactose-free benefits, and additional nutrients. Moreover, financial investments enable companies to innovate and develop new plant-based milk varieties, such as blends with added proteins, vitamins, and flavors. For instance, brands are introducing oat milk blends fortified with additional nutrients.
Source (Soy, Almond, Coconut, Rice, Oats)
The soy segment is estimated to gain a significant revenue share of 36% by 2036. The increasing global burden of obesity can be attributed to the segment's expansion, which is expected to drive up demand for low-calorie products like soy milk. As per the World Heart Federation, nearly 2.3 billion adults and children worldwide are estimated to be overweight or obese. Soy milk typically has fewer calories compared to whole dairy milk, which appeals to individuals looking to manage their weight. This lower caloric content makes it an attractive option for those trying to reduce their overall calorie intake.
With increasing awareness of the health risks associated with obesity, such as diabetes, heart disease, and hypertension, more consumers are seeking healthier dietary options. Soy milk, being low in fat and high in protein, aligns with these health-conscious choices.
Distribution Channel (Supermarket & Hypermarkets, Convenience Stores, Online retail)
The supermarket & hypermarkets segment in the dairy alternatives market is anticipated to gather a substantial CAGR shortly. As grocery spending rises, supermarkets and hypermarkets experience increased sales volumes. For instance, global food sales at supermarkets and convenience stores reached over USD 1.35 trillion in 2021. Increased consumer spending enables retailers to expand their product lines, invest in marketing and enhance store offerings, which in turn supports the growth and accessibility of dairy alternatives.
Our in-depth analysis of the market includes the following segments:
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Product |
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APAC Market Statistics
Dairy alternatives market in the Asia Pacific is anticipated to hold the largest share of 46.2% by the end of 2036. The market growth in the region is expected on account of rising disposable income. Moreover, factors including lactose intolerance, health trends, environmental concerns, cultural shifts are contributing to the market growth.
In China e-commerce platforms such as Tmall, and JD.com provide extensive reach to both urban and rural areas. This accessibility ensures that dairy alternatives are available to a broader audience, including consumers in areas where physical stores may have limited offerings.
India has a large vegetarian population, and there is a growing interest in vegan diets. As of 2022, over 24% of the Indian population is strictly vegetarian with 9% vegan. This cultural trend supports the demand for plant-based milk and dairy alternatives.
In South Korea there is a growing trend towards plant-based diets and veganism. This shift is supported by the rise of veganism and increased awareness of animal welfare and environmental issues.
North American Market Analysis
The North America will encounter huge growth for the dairy alternatives market during the forecast period and will hold the second position owing to the increasing health awareness. Plant-based meat consumption is increasing in the region, as are acceptance rates of dairy substitutes, as health-conscious customers actively seek alternatives to meat, gluten, and dairy.
In the U.S. almond, oat, and soy milk are leading the market, with innovation and e-commerce playing significant roles in driving growth.
In Canada awareness about animal welfare and sustainable farming practices is driving the shift towards plant-based products. Many consumers choose dairy alternatives as part of a broader ethical and environmentally friendly lifestyle.
Major players leverage their established brand presence and marketing expertise to increase consumer awareness and trust in dairy alternatives. They often engage in partnerships and acquisitions to enhance their product offerings and market reach. Through these roles, key players significantly influence market trends and drive the growth of the dairy alternatives industry.
Author Credits: Parul Atri
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