Stay ahead of the curve and future-proof your business with Mintel’s UK Dairy Alternatives Market Report 2023. Our full report is packed with consumer-led market intelligence, the latest trends and consumer behaviours affecting your industry. Get a 360° view of the dairy alternative products market including market size, share and forecasted growth to help you align your business strategy with the needs of your audience.
Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.
Key Topics Covered in this Report
- The impact of the rising cost of living on consumer habits in the market and sales.
- The outlook for the market in the re-emergence from the income squeeze and recovery up to2028.
- The latest NPD trends and opportunities for future development.
- Barriers to using dairy alternatives.
- Consumer behaviours and attitudes related to dairy alternatives.
UK Dairy Alternatives Market – Current Overview
Following years of rapid growth pre-pandemic, the dairy alternatives market took a hit in 2022 thanks to the cost-of-living crisis. Consumers are cutting back on spending, and dairy alternative products generally have weak value-for-money associations compared to their dairy equivalents. Once pressures of household incomes start to ease, Mintel predicts that consumer spending will regain momentum and support growth for the dairy alternative industry.
- Dairy alternatives market size: The market increased by +1.8% in 2022, but high levels of inflation mask a sharp fall in volume sales.
- Dairy alternatives market forecast: Value sales in the dairy alternatives retail market are forecast to increase by 50.2% over the next five years.
UK Dairy Alternatives Market Trends and Opportunities
Poor taste perceptions
Addressing the negative taste associations of dairy alternatives remains crucial to grow the market, as this is the most commonly cited reason for not using them. Many UK consumers agree that dairy alternatives should have the same taste and texture as equivalent dairy products. There is already a focus on dairy alternatives delivering both the same taste experience and behaving in the same way texturally, however, there is also scope for more products to celebrate their unique ingredients and the taste and texture they deliver to sidestep comparisons to dairy.
Highlight sustainability
In an increasingly crowded category, brands can stand out in the dairy alternatives market by highlighting the environmental and sustainability benefits of their products. Over a third of non-users of dairy alternatives agree that more information about environmental benefits would encourage them to switch from a dairy product to a dairy-free alternative. This is an opportunity for ice cream and desserts, Mintel’s UK Sustainability in Food 2023 Market Report found that a third of adults think that sustainability claims make indulgent treats feel more permissible. Highlighting that making more of the sustainability benefits could help dairy alternatives gain ground in these categories.
Products and Brands Covered in this Report
This report covers dairy alternatives which includes all dairy-free alternatives to cow’s milk products, including milk, cream , cheese, yogurt/drinking yogurt/kefir and ice cream. Leading brands covered in this report include Alpro, Oatly, Violife, Califia Farms, The Coconut Collaborative, Koko Dairy Free, Rude Health, and more.
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To learn how to connect with your audience, purchase our full UK Dairy Alternatives Market Report 2023. Discover lucrative innovation opportunities to help your business grow during times of financial uncertainty.
Expert Insights from a Food Industry Analyst
This report, written by Emma Clifford, a leading food and drink analyst, delivers in-depth commentary and analysis to highlight current trends in the UK Dairy Alternatives market and add expert context to the numbers.
Due to dairy alternatives’ comparatively high prices, the cost-of-living crisis has hit the demand for these. While the market will rebound strongly once consumers can reprioritise sustainability and health, products must prove their credentials in these areas. Bridging the gap between dairy and dairy alternatives on taste, texture and price will play a role in future growth, precision fermentation offering huge potential here.
Emma Clifford
Associate Director – Food and Drink Research UK
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Overview
- Key issues covered in this Report
- Products covered in this Report
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Executive Summary
- The five-year outlook for dairy alternatives
- Figure 1: Category outlook, 2023-28
- The market
- Market size and forecast
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- Figure 2: Market forecast for retail value sales of dairy alternatives, 2018-28
- One in five buyers have cut back on dairy alternatives
- Figure 3: Changes in purchasing of dairy alternatives due to the cost-of-living crisis, 2023
- Sustainability takes a backseat, but expected to rebound
- Healthy eating intentions have taken a dip
- Companies and brands
- A troublesome year sees Alpro lose share; own-label the big winner in 2022/23
- Figure 4: Leading brands’ value sales in the total UK retail dairy alternatives market, 2021/22 and 2022/23
- NPD in dairy alternatives picked up again in 2022
- A sharp increase in adspend on dairy alternatives in 2022
- The consumer
- Usage of dairy products remains near-universal, a third use dairy alternatives
- Figure 5: Overall usage of dairy products and dairy alternatives, 2023
- Poor taste perceptions remain the biggest challenge
- Figure 6: Reasons for not using dairy alternatives, by product type, 2023
- Brands should embrace precision fermentation; UK-sourced ingredients are a strong selling point
- Figure 7: Behaviours relating to dairy alternatives, 2023
- More transparency over sustainability benefits is needed; highly processed ingredients are off-putting
- Figure 8: Attitudes towards dairy alternatives, 2023
- The five-year outlook for dairy alternatives
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Issues and Insights
- Brands should embrace precision fermentation
- More transparency over sustainability benefits is needed
- Capitalise on UK-sourced ingredients as a strong selling point
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Market Size and Performance
- Helped by the pandemic, value growth peaked at 25% in 2020
- Real-terms declines in 2022 and 2023
- Figure 9: UK retail value sales of dairy alternatives, 2018-23
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Market Forecast
- The five-year outlook for dairy alternatives
- Figure 10: Category outlook, 2023-28
- Growth to pick up from 2024
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- Figure 11: Market forecast for retail value sales of dairy alternatives, 2018-28
- Learnings from the last income squeeze
- Forecast methodology
- The five-year outlook for dairy alternatives
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Market Drivers
- One in five buyers have cut back on dairy alternatives
- Discounters and own-label reap rewards
- Figure 12: Changes in purchasing of dairy alternatives due to the cost-of-living crisis, 2023
- The ambient aisle also benefits
- Rapidly rising prices in dairy see the price gap between dairy alternatives narrow
- Figure 13: CPI for all food and selected dairy markets, 2019-23
- Inflation will continue to eat into consumer spending power over the course of 2023
- Further interest rates increases will hit mortgage holders
- High inflation and rising interest rates will compound the impact of the slowing recovery
- Consumer spending power will be curbed
- Low unemployment is helping underpin consumer confidence
- Consumers’ financial wellbeing has fallen from the highs of 2021…
- Figure 14: Household financial wellbeing index, 2016-23
- …and most people are feeling the effects of price rises
- Sustainability takes a backseat, but expected to rebound
- Meat and dairy’s impact on climate change continues to attract media attention
- Related concerns go hand in hand with consumers’ plant-based choices
- Keen interest in clearer information about environmental benefits
- Eco-Score and Eco Impact labels are being trialled
- Healthy eating intentions have taken a dip
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Market Share
- A troublesome year sees Alpro lose share
- Figure 15: Leading brands’ value sales and shares in the total UK retail dairy alternatives market, 2021/22 and 2022/23
- Own-label was the big winner in 2022/23
- Figure 16: Leading brands’ sales and shares in the UK retail dairy-free milk and flavoured milk alternatives market, by value and volume, 2021/22 and 2022/23
- A troublesome year sees Alpro lose share
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Launch Activity and Innovation
- NPD in dairy alternatives picked up again in 2022
- Figure 17: Share of launches in the dairy and dairy alternatives market* carrying vegan/no animal ingredients or dairy-free claims, 2018-23
- NPD aims to match the taste of dairy as closely as possible
- Mighty forays into precision fermentation
- Figure 18: Plant-based milk launches from Alpro and Mighty, UK, 2022
- A rise in plus and functional NPD activity in 2022
- Figure 19: Share of launches in the dairy alternatives market*, by claim category, 2018-22
- Gut health attracts attention
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- Figure 20: Plant-based yogurt launches with gut health claims, UK, 2022
- Benecol branches out into plant-based
- High levels of NPD in plant-based cheese alternatives
- Leading cheese brands continue to join the fray
- The Simple Root creates plant-based cheese line from root veg
- Vegan cheese brands extend their ranges
- Figure 21: Plant-based cheese alternative launches, UK, 2022
- Vegan cheese brands win supermarket listings
- The indulgence trend in dairy alternatives is going strong
- Figure 22: Plant-based ice cream launches, UK, 2022/23
- The Coconut Collab shows the cream segment some love
- Figure 23: The Coconut Collab Double Cre&m, UK, 2022
- Powdered formats improve oat milk’s eco credentials
- NPD targets kids
- SMA looks to appeal to flexitarians with plant-based formula milk
- Figure 24: SMA Nutrition Little Steps Plantygrow Plant-Based Growing Up Drink, UK, 2022
- Activity in mess-free plant-based yogurts
- NPD in dairy alternatives picked up again in 2022
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Advertising and Marketing Activity
- A sharp increase in adspend on dairy alternatives in 2022
- Figure 25: Total above-the-line, online display and direct mail advertising expenditure on dairy alternatives, by brand, 2019-23, sorted by 2022
- Milk alternatives highlight their similarity to dairy milk
- Alpro focuses on its new range’s likeness to milk
- Oatly positions itself as successor to cow’s milk
- Califia Farms blurs the line between different plant-based drinks
- Dairy alternative brands call for a change by challenging consumers’ perceptions
- Violife shows mouthwatering food with melted cheese on its OOH campaign
- Arla uses experiential activity to promote Jörd
- DUG dares consumers to be brave with its new campaign #daretodug
- Moma launches new growth strategy
- Glebe Farm advocates 100% British oat milk
- Plenish Drinks refreshes its look with new marketing campaign
- Nielsen Ad Intel coverage
- A sharp increase in adspend on dairy alternatives in 2022
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Usage of Dairy Alternatives
- Usage of dairy products remains near-universal, a third use dairy alternatives
- Figure 26: Overall usage of dairy products and dairy alternatives, 2023
- Milk has a strong lead in dairy alternative usage
- Figure 27: Usage of dairy products and dairy alternatives, by product type, 2023
- Usage of dairy products remains near-universal, a third use dairy alternatives
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Barriers to Dairy Alternatives Usage
- Poor taste perceptions remain the biggest challenge
- Figure 28: Reasons for not using dairy alternatives, by product type, 2023
- Encourage product trial to overturn outdated associations
- Most want dairy alternatives to taste and feel the same as standard dairy…
- …but potential to celebrate unique taste profiles as well
- Poor taste perceptions remain the biggest challenge
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Behaviours Relating to Dairy Alternatives
- Young consumers open to genetic engineering technology
- Figure 29: Behaviours relating to dairy alternatives, 2023
- Precision fermentation can bridge the gap between dairy and dairy alternatives…
- …and brands should embrace this technology
- UK-sourced ingredients are a strong selling point
- Young consumers open to genetic engineering technology
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Attitudes towards Dairy Alternatives
- More transparency over sustainability benefits is needed
- Figure 30: Attitudes towards dairy alternatives, 2023
- Overall measures of sustainability resonate with shoppers
- Figure 31: Mighty Ultimate Oat Barista Drink, UK, 2023
- Spotlighting ‘greener’ plant-based ingredients can drive standout in dairy alternatives
- Figure 32: DUG Barista Dairy Free Potato-Based Drink, UK, 2023
- Dairy needs to work harder to minimise its environmental footprint
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- Figure 33: Agreement with attitudes towards dairy alternatives, by usage of dairy alternatives, 2023
- Highly processed ingredients in dairy alternatives are off-putting
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- Figure 34: On-pack communications on Plenish Organic & Unsweetened Coconut Drink, UK, 2023
- More transparency over sustainability benefits is needed
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Consumer research methodology
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Appendix – Forecast Methodology
- Market forecast and prediction intervals
- Figure 35: Market forecast for retail value sales of dairy alternatives, 2018-28
- Figure 36: Market forecast and prediction intervals for retail value sales of dairy alternatives, 2023-28
- Market drivers and assumptions
- Forecast methodology
- Market forecast and prediction intervals
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Appendix – Market Share
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- Figure 37: Leading manufacturers’ sales and shares in the UK retail dairy-free milk and flavoured milk alternatives market, by value and volume, 2021/22 and 2022/23
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Appendix – Launch Activity and Innovation
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- Figure 38: Share of launches in the dairy alternatives market*, by launch type, 2018-22
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