What’s new in dairy alternatives?

7 May 2019

Sales of dairy alternatives have surged over the past few years on the back of consumer concerns about the ethics of dairy farming and a sustained shift toward plant-based diets – and innovation in the category continues to broaden their appeal.

Until a few years ago, sales of dairy alternatives were driven by relatively small numbers of lactose intolerant and vegan consumers. Now, many non-dairy products appeal to a wider cross-section of shoppers, as manufacturers have found ways to improve their flavour and texture. Many have become more like dairy products, while others have opted to emphasise the inherent characteristics of plant ingredients, without necessarily attempting to mimic dairy.

What’s new in dairy alternatives?
Almond milk leads the market for plant-based milk alternatives

According to Innova Market Insights, products based on coconut and almond are leading the market, but other plant ingredients are up-and-coming, including cashew, oat and rice milk, as well as more unusual options like lupin, hemp and flaxseed.

The category continues to be led by beverages, but where soy once dominated, companies are experimenting with a wide range of new base ingredients, and soy has fallen from favour in recent years. In the United States, for example, almond-based milk has 64% of the total plant milk market, with soy trailing at 13% and coconut following at 12%, according to Mintel. And in the UK, where plant-based milk sales have risen 30% since 2015, almond milk accounts for two-thirds of the market.

Global sales of dairy alternative drinks accounted for over 8% of global dairy launches in 2017, according to Innova data, up from 7% in 2016. And the number of global dairy alternative drinks launches has more than doubled over a five-year period.

Meanwhile, spoonable yoghurt alternatives also have surged, with a 48% CAGR over 2013-2017. Innova says this category has grown from less than 0.5% of total dairy yoghurt launches in 2012 to 1.5% in 2017.

Increased consumer interest has been boosted by innovation, with greater attention to design and marketing, as well as new developments from ingredient suppliers to produce appealing flavour and texture. Jungbunzlauer, for example, produces a range of minerals specifically for fortifying dairy alternatives. As well as improving products’ nutritional profile, they also help mask undesirable flavours, such as the astringency or bitterness of some pea or soy protein ingredients. In addition, it says the minerals make plant-based drinks taste sweeter and creamier.

Ingredient companies with years of experience in the dairy sector now are also innovating in the plant milk space. For instance, Chr Hansen has started supplying yoghurt cultures and probiotic cultures for plant-based yoghurt alternatives, and DuPont Nutrition & Health, under its Danisco brand, supplies a range of cultures for plant-based fermented foods.

Meanwhile, Butter Buds Food Ingredients traditionally has focused on dairy concentrates to enhance flavour and cut the cost of dairy ingredients in dairy-based foods. It has introduced a vegan line to improve the flavour, richness and mouthfeel of dairy alternatives.

For ingredient firms with specialist expertise in the dairy sector, it is a common sense move to branch out into dairy alternatives – just as major dairy companies and cooperatives are doing the same.