The squeeze on household budgets and price rises in the category led to cutbacks on dairy alternatives in 2023. Slowing inflation and price promotions will see volume declines ease in 2024. Modest improvements to consumer spending in 2025, coupled with slowing inflation, will give way to stronger momentum in 2026 and beyond. If dairy alternatives’ current younger user base retain their habits with age, usage across the population will grow.
Sustainability will become more front-of-mind as consumers’ confidence and incomes improve, creating growth opportunities for dairy alternatives. However, putting forward its green credentials will be crucial for the category to unlock this potential. At present, only a third of consumers view being environmentally friendly as a benefit of dairy alternatives.
The public focus on highly processed foods continues to challenge the market, with two in three people finding highly processed ingredients in dairy alternatives off-putting. This highlights the importance for brands with a clean-label positioning to clearly communicate this to stand out amid concerns about ultra-processed foods (UPFs). For the many brands using processed ingredients, explaining the role of less familiar components can help alleviate consumer concerns.
This report looks at the following areas:
- Key trends in launch activity and future opportunities
- Usage of dairy alternatives and key demographics
- The benefits associated with dairy alternatives
- Concepts of interest in dairy alternatives, including plant-based blends
- Behaviours related to dairy alternatives, including concerns around ultra-processed ingredients and the need for the category to deliver a positive eating experience
Volume sale declines eased in 2024. Rising interest in sustainability once incomes improve will provide new growth opportunities for the category.
Isabelle Shilling, Research Analyst
Market Definitions
For the purposes of this Report, Mintel has used the following definitions:
The market size includes dairy-free alternatives to cow’s milk products across milk, cream/custard, prepacked cheese, yogurt/drinking yogurt and desserts.
The market size refers to the retail channel only.
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Executive Summary
- Opportunities for the dairy alternative market
- Strong environmental credentials will earn brands favour
- High interest for plant-based blends
- Counter concerns about highly processed ingredients
- Market dynamics and outlook
- Market size & forecast
- Market predictions
- Growth to regain momentum
- Market value stagnates in 2024
- Graph 1: retail value sales of dairy alternatives, 2019-24
- Plant-based milk dominates the market
- Graph 2: retail value sales of dairy alternatives, by segment, 2022-24
- Alpro retains top position
- Graph 3: leading brands’ value sales in the retail dairy alternatives market, 2021-24
- What consumers want and why
- Nearly two in five people use dairy alternatives
- Graph 4: overall usage of dairy products and dairy alternatives, 2023 and 2024
- Dairy alternative milk holds lead in usage
- Graph 5: usage of dairy products and dairy alternatives, by product type, 2024
- One in four are interested in plant-based blends
- Graph 6: concepts of interest in dairy alternatives, by dairy alternatives and dairy-only users, 2024
- Few see being good for the environment as a benefit of dairy alternatives
- Graph 7: benefits associated with dairy alternatives, 2024
- Few see being good for the environment as a benefit of dairy alternatives
- A good eating experience remains paramount
- Graph 8: behaviours related to dairy alternatives, 2024
- Innovation and marketing
- Dairy alternatives’ share of launches declined in 2023
- Graph 9: share of launches in the dairy and dairy alternative market carrying vegan/no animal ingredients or dairy-free claims, 2020-24
- Range extensions from established players in 2024
- New names enter the dairy alternative market
- Adspend grows in 2023
- Graph 10: total above-the-line, online display and direct mail advertising expenditure on dairy alternatives, 2021-24
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Market Dynamics
- Market value stagnates in 2024
- Graph 11: retail value sales of dairy alternatives, 2019-24
- Underlying decline eases, value sales stagnate in 2024
- Market forecast
- Growth to regain momentum
- Value growth expected over next five years
- Market segmentation
- Plant-based milk dominates the market…
- Graph 12: retail value sales of dairy alternatives, by segment, 2022-24
- …hit hard as consumers economised on grocery spend
- Market share
- Alpro retains top position
- Graph 13: leading brands’ value sales in the retail dairy alternatives market, 2021-24
- A market of two halves
- Alpro regains momentum in 2023/24
- Plenish and Cathedral City shoot forward
- Market drivers
- Real wage growth continues, many consumers are still catching up
- Graph 14: CPI inflation rate and total pay growth rate, 2021-24
- Only one in four describe finances as healthy
- Graph 15: the financial wellbeing index, 2018-24
- Consumer confidence for the year ahead weakens
- Graph 16: the financial confidence index, 2016-24
- Strong consumer interest in healthy eating…
- Graph 17: how often people try to eat healthily, 2018-24
- …highlights need for dairy alternatives to not fall behind on nutrition
- Highly processed foods come under scrutiny…
- …with calls for further research
- Interest in sustainability to gain ground as income pressures ease
- CCC and IGD call for red meat and dairy reductions to meet net zero targets
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What Consumers Want and Why
- Usage of dairy and dairy alternatives
- Nearly two in five people use dairy alternatives
- Graph 18: overall usage of dairy products and dairy alternatives, 2023 and 2024
- Under-45s are top users
- Graph 19: usage of any dairy alternative, by age group, 2024
- Parents are more likely to use dairy alternatives
- Dairy alternative milk holds lead in usage
- Graph 20: usage of dairy products and dairy alternatives, by product type, 2024
- Concepts of interest in dairy alternatives
- One in four are interested in plant-based blends
- Graph 21: concepts of interest in dairy alternatives, by dairy alternatives and dairy-only users, 2024
- Plant-based blends appeal widely
- Celebrate the variety of plant-based ingredients
- SMUG dairy and plant-based blend offers cues
- Benefits associated with dairy alternatives
- Few see being good for the environment as a benefit of dairy alternatives
- Graph 22: benefits associated with dairy alternatives, 2024
- Taste and price are paramount in consumer choice…
- Graph 23: most important factors when buying food and drink products, 2024
- … however sustainability is expected to become more front of mind
- Strong green credentials will help brands win favour
- Making environmental benefits of dairy alternatives tangible is challenging
- Flora and Oatly spell out their impact
- Messages centred on a single green aspect can catch people’s eye
- A need to drive consumer awareness
- Behaviours related to dairy alternatives
- Many consumers see dairy alternatives as highly processed
- Graph 24: behaviours related to dairy alternatives, 2024
- Highly-processed ingredients in dairy alternatives are seen as off-putting
- …but this view doesn’t dampen usage
- Brands spotlight simple ingredients
- Communicate the benefits of processing and less-familiar ingredients
- Concerns about processing open up the door to competing products
- …like hummus and tofu
- A good eating experience remains paramount
- On-pack communication has a part to play in reassurance
- Violife spotlights its cheese as creamy, stretchy and melty
- Keen interest in more information on how to use dairy alternatives
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Innovation And Marketing Trends
- Launch activity and innovation
- Dairy alternatives’ share of launches declines in 2023
- Graph 25: share of launches in the dairy and dairy alternative market carrying vegan/no animal ingredients or dairy-free claims, 2020-24
- Dairy alternative launches take highest share in milk
- Graph 26: share of launches in dairy and dairy alternative categories carrying vegan/no animal ingredients or dairy-free claims, 2020-24
- Glebe farm launches ‘industry-first’ oat drink for tea
- Fresh oat milk brand Oato secures brick-and-mortar listings
- Packaging updates abounded in 2023
- Deliciously Ella and Oddlygood launch plant-based milks
- ‘Barista’ variants expand in organic milks
- Flavoured plant-based milk launches continue, seasonal flavours attract NPD
- Alpro extends Plant Protein range
- Flora launches plant cream, Costa introduces oat latte
- Biotful and Alpro explore gut health, Coconut Collab looks to support menopause
- NPD from Biotfiul, Alpro and The Coconut Collab
- Cathedral City extends plant-based range
- Sheese undergoes major rebrand and launches new recipe
- I AM NUT OK secures first nationwide listing
- Own label continues to expand dairy alternative cheese offerings
- Bel UK launches Boursin Plant-Based
- Lidl plans to triple plant-based range
- Ben & Jerry’s switches plant-based ice cream base to oats
- Advertising and marketing activity
- Adspend grows in 2023
- Graph 27: total above-the-line, online display and direct mail advertising expenditure on dairy alternatives, 2021-24
- Alpro partners with Peter Crouch
- Oddlygood champions oddness in new campaign
- Plenish has ‘Nothing to Hide’
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Appendix
- Supplementary data
- Value sales of dairy alternatives by segment
- Leading brands’ retail sales of dairy alternatives
- Leading brand owners’ retail sales of dairy alternatives
- Total above-the-line, online display and direct mail advertising expenditure on dairy alternatives, by advertiser
- Market forecast data and methodology
- Market forecast
- Market forecast and prediction intervals (value)
- Forecast methodology
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Consumer research methodology
- Nielsen Ad Intel coverage
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