From plant-based almond milks to oat and soy — the Top 3 segments in the category — global sales of dairy alternatives were valued at $32.7 billion in 2024 and are expected to reach $66.9 billion in 2030, growing at a compound annual growth rate (CAGR) of 12.7%, states Grand View Research.

In 2024, Asia Pacific was the largest market for dairy alternatives, with lactose intolerance particularly common among Southeast Asian populations. Grand View Research’s report suggests that the growing prevalence of lactose intolerance and milk allergies is expected to be a major driver in the dairy alternatives market. (See article on lactose-free in this issue).

However, in the United States, dairy alternatives are experiencing a slowdown. “Plant milk continues to struggle, down -3.7% in dollars and -6% in volume, while in contrast, dairy milk is up 4.8% in dollars and flat in volume [for the 52 weeks ending July 13],” says John Crawford, senior vice president of Client Insights-Dairy at Circana, a Chicago-based market research firm.

“The driver of plant milk declines is almond, which is 66% of plant milk volume. Almond is down -7.1% in dollars and -9.5% in volume,” Crawford says. “Oat is the second-largest segment at 20% of volume and is flat in dollars but up 1.3% in volume.

“Oat was the hot new variety a few years ago. It found its footing in coffee shops before retail because it was closer in texture to dairy milk than almond,” he continues. “Oat grew to the second-largest type surpassing soy very quickly. In recent years, oat has struggled along with almond.”

Daphna Miller, co-founder and CEO of NewMoo, expresses similar sentiments, noting the declining popularity of traditional dairy alternatives like almond, soy, rice and cashew, while dairy milk saw its first sales increase in over a decade.

“Consumers are turning away from alt milks due to concerns around taste, texture and nutrition. Fifty-seven percent say the experience doesn’t meet expectations, and many products fall short on protein and key nutrients,” Miller states. “As a result, some brands have pulled products from shelves, and many consumers are looking for next-gen alternatives that more closely replicate the real thing but still have advantages like lactose free and animal free.”

When it comes to basket rings, dairy milk is the runaway favorite — purchased by 91% of households annually, compared to only 38% of households who purchased plant milks, which also is down 1.4 percentage points from previous years, according to Circana.

Cargill’s Allison Leibovich, marketing manager for dairy and dairy alternatives at the Wayzata, Minn.-based ingredient company, suggests the plant-based market has leveled off.

“Compared to previous years, the plant-based space has entered a period of market normalization, as traditional dairy and dairy alternatives share the spotlight,” Leibovich says. “This doesn't mean plant-based is fading, rather the frenzy to launch new products has slowed. Plenty of quality plant-based products remain.”

On the other hand, Jamie Matthews, head of customer technical support North America at BENEO, notes that several alternative dairy categories are showing strong potential for growth. This is driven by a greater variety of plant protein options and shifting consumer preferences, he suggests.

He cites a survey from McKinsey that states that a quarter of United States consumers buy both conventional dairy as well as dairy alternatives.

“The share of ‘only plant-based buyers’ is quite low at 5%,” Matthews relays. “So, in most cases, plant-based options are an add-on to the conventional dairy options and hence contribute to a flexitarian lifestyle, which is gaining popularity.

“In fact, a 2023 consumer survey on behalf of BENEO revealed that 41% of U.S. respondents try to avoid or limit their dairy consumption,” he continues.

Yet, as protein remains a go-to for many consumers, the Parsippany, N.J.-based company is assisting product developers in exploring emerging protein sources. This includes faba bean to enhance functionality, improve protein quality, and support sustainability initiatives. Additionally, multi-ingredient plant-based blends are being utilized to optimize nutritional and functional properties.

Matthews notes that other trends include clean label via natural ingredients that provide functionality (inulin, native rice starch), sugar/fat reduction, and sustainability.

On the cutting edge with sustainable, cost-effective solutions

When it comes to new product development in the dairy alternatives space, NewMoo’s Miller reports that dairy manufacturers are seeking solutions that are sustainable, cost-effective, can easily scale-up and most importantly are compatible with their existing infrastructure.

“That’s why NewMoo developed a liquid casein base, not a powder, that functions like milk in dairy production. Unlike other fermentation or [Peptide Mass Fingerprinting] (PMF) approaches, our format avoids costly separation and purification steps, making it more scalable and affordable,” Miller explains. “Most importantly, it integrates seamlessly into current manufacturing processes, minimizing disruption and investment for dairy producers.”

Since taste and nutrition are king and plant-based products can’t often measure up, NewMoo is decidedly different, according to Miller.

“Our NewMoo milk, identical to cow’s milk in taste, nutrition, and functionality, not only solves existing challenges for dairy producers but also unlocks a new era for the industry,” she explains. “By enabling ‘just-in-time’ supply planning, reducing production gaps, offering a long shelf-life raw ingredient, lowering processing costs, and supporting lean, flexible transportation, we bring efficiencies and innovations that move dairy into a more sustainable, agile future — without the cow.”

Many of today’s consumers don’t view dairy and plant based as an “either-or” decision, Cargill’s Leibovich points out.

“They treat them as complementary. It’s common to find oat milk and traditional yogurt side-by-side in the same fridge,” she states. “Usage often depends on the moment: almond milk for a morning latte, dairy cheese for a Friday pizza night.

In the milk alternative space, Leibovich is seeing a resurgence in soy.

“Once overshadowed by almond and oat, soy’s status as a complete protein source is driving renewed attention and new product launches,” she says. “On the indulgent side, we’re seeing growth in premium coconut cream-based yogurts, which appeal to consumers looking to splurge with rich, indulgent mouthfeels. Inclusions are also adding fun and texture to plant-based options. Even plant-based pudding is gaining traction, with pistachio-, rice- and almond-based options appealing to flexitarian consumers.

“Whether it’s traditional dairy or plant-based alternatives, protein remains a golden halo of opportunity,” Lebovich continues. “While the protein content on many plant-based dairy alternatives lags behind their conventional counterparts, we are seeing some brands push past previous boundaries, achieving double-digit grams of protein per serving. Advances in plant proteins are making those gains possible, with a new generation of better tasting and more soluble ingredients.”

Plants and protein

The plant-based protein market will be estimated at nearly $35 billion by 2030, according to MarketsandMarkets.

Finding alternative protein sources is a priority for many companies. In July, GEA Group unveiled a new $20M Food Application and Technology Center in Janesville, Wis., to scale alternative proteins in such foods as meat, dairy, seafood and eggs.

BENEO recently opened a new pulse-processing site in Germany, where locally grown pulses like faba bean will be turned into high-quality protein ingredients for the food industry.

“As a high-quality, clean-label ingredient, BENEO’s faba bean concentrate contains a minimum of 60% protein on dry matter, and offers very good emulsifying, foaming, thickening and binding properties,” Matthews says. “For instance, the BENEO-Technology Center developed a recipe of a rice-based whipping cream, where adding BENEO’s faba bean protein concentrate further improved the foamability of the plant-based cream, resulting in excellent whipping properties.

“Also, in a dairy-free cocoa dessert, the protein concentrate allowed for an appealing nutritional profile,” he continues. “This offers manufacturers interesting opportunities for tapping into the plant-based trend.”

Looking to the future

Now and in the future, Circana’s Crawford predicts plant alternatives will continue to struggle, but expects declines could moderate and possibly return to slow growth.

“I do not anticipate double-digit growth nor declines for plant alternatives in the coming years. I still expect the percentage of category sales to be relatively small. For perspective, plant makes up 12.5% of milk, 8.9% of cream/creamers, 2.5% of yogurt, 0.7% of cheese, 1.4% of cream cheese, 0.6% of sour cream and 0% of cottage cheese,” he explains. “There is certainly upside for plant alternatives, but I expect share of total categories will be small.”

Yet, innovation in dairy alternatives and with protein-packed products continues to drive interest.

With more than 50 years of combined executive experience in business, food technology, and marketing management from the traditional dairy industry, the NewMoo team has gained deep insight into the dairy industry’s strengths and limitations, Miller states.

“This knowledge shaped NewMoo’s strategy and guided the development of our unique solution for the animal-free dairy market. The future of dairy alternatives will be defined by a shift from compromise to equivalence,” she notes. “Consumers are no longer satisfied with ‘good enough.’ They want animal-free options that taste, perform, and nourish like real dairy.

“Traditional alt milks are plateauing, but next-generation technologies like plant molecular farming are unlocking new possibilities for mimicking milk proteins for this industry,” Miller concludes. “As these innovations scale and reach cost parity, we expect to see a new wave of dairy alternatives that compete not just as substitutes, but as true equals on the shelf.” DF