In the 1967 musical “Doctor Doolittle,” Rex Harrison in the title role sings about being a “reluctant but sincere vegetarian,” as he hears piglet Gub-Gub’s squeals as sausage and bacon sizzle over an open flame. Some 50 years later, 7.5% of millennials and Gen Z have given up meat, while only 2.5% of Americans over the age of 50 consider themselves vegetarian (meat-free and in some cases, free from animal-derived foods such as eggs and milk), reports market research firm Statista.

Market research analysts and experts note that dairy alternative “milks,” not to mention dairy-free creamers, cheese, vegan ice cream, and yogurt are experiencing mixed results.

Westchester, Ill.-based Ingredion notes that plant-based creamers have quickly gained momentum.

“In general, we have seen a greater amount of innovation activity in the creamers space, where companies are looking at bringing not only cleaner and simpler label products to market, but also products with a healthier halo that are lower in sugar, have fiber benefits, and are fun and exciting concepts for a younger generation of consumers,” says Ivan Gonzales, Ingredion’s director of category marketing for Dairy, Texture and Healthful Solutions US/Canada.

Although it comprises the largest subcategory within plant-based milk at 58%, almond milk dollar sales were down 8.5%, while volume is down 9.4% in total U.S. multi-outlets and convenience stores for the 52 weeks ending June 16, states John Crawford, senior vice president of Client Insights-Dairy at Chicago-based Circana.

Oatmilk, which makes up 24% of the total category, is flat in dollars and up 0.2% in volume, while soy milk, which comprises 7% of the category, is up slightly at 1.1% in dollars and down 3.6% in volume; yet, price increases are offsetting volume losses, he explains.

When looking at other plant-based segments, Crawford notes that plant-based cream cheese are tops in dollar sales and volume at 5.2% and 8.1%, respectively, while plant-based refrigerated desserts had dollar gains of 3.4% and a volume increase of 2.5% versus a year ago.  Also faring well with an 8.8% increase in volume are plant-based refrigerated dips. Yet, dollar sales only increased 1.3%. Additionally, plant-based sour cream is up in dollars but down in volume.

“All other plant-based categories in the Dairy15 are down in dollars,” Crawford says.

Yet, dairy-free coconut milks, which comprise just 5% of the plant-based milk category, is generating double-digit dollar sales. “Coconut milk is seeing a bit of a resurgence, up 11% in in dollars and 7.3% in volume,” Crawford states. Pea and cashew milk only comprise 1% of market share, respectively, he adds.

“Dairy milk has actually seen better performance than plant-based milk recently, particularly in volume (consumption) growth [at -0.5% vs. 7%, respectively],” Crawford states. “Plant-based milk has had a couple of years of declines following consistent strong growth prior.”

The market research firm reports sluggish sales decline of 2.3% for dairy milks and 5.4% for plant-based milks for the 52 weeks ending June 16.

Yet, consumers are still reaching for dairy alternatives. January 2023 proprietary research from Chicago-based ADM Outside Voice reports that more than 70% of plant-forward consumers (defined as flexitarians, vegetarians, or vegans) state they consume dairy alternatives.

“In the U.S., consumer trial of plant-based products has significantly increased since 2020, with plant-based alternatives of milk leading the trend,” notes ADM’s Bastian Hörmann, global marketing director for Sweet Goods, Dairy & Specialized Nutrition. “Global consumers state they have increased their consumption of both traditional and non-dairy (soy-, oat-, almond- or coconut-) milk in the past 12 months [per FMCG Gurus, Global Milk Trends, Dairy and Non-Dairy, 2023].

“Plant-forward consumers in the U.S. also state they’re eating plant-based alternatives of yogurt, cheese, and ice cream more regularly than they did a year ago,” he continues, citing Euromonitor’s Global Plant-Based Dairy, CAGR 2024-2029.

“Market research further indicates interest in plant-based dairy alternatives, with the global plant-based milk category expected to have a [compound annual growth rate] (CAGR) of 4.1% and the global plant-based yogurt category to have a CAGR of 4.2% through 2029,” Hörmann says. “Additional growth is expected for plant-based cheese, with the global category anticipated to have a CAGR of 8.2% in the next five years.”

Peter Losee, vice president of marketing at Bowling Green, Ky.-based Bluegrass Ingredients, notes that inflation and rising food costs are a challenge across sectors.

”All food manufacturers — and consumers — are looking for ways to cut costs through innovative approaches to ingredients.” Losse explains. “Specifically, dairy costs have continued to rise, while non-dairy options have continued to expand and improve. That’s created a real incentive for consumers to seek out these alternatives, and the consistent evolution of new flavors and applications has made that more exciting.”

A “Dairy Alternatives Market” report from Pune, India-based Maximize Market Research suggests that veganism has risen as a lifestyle choice that avoids eating animal-derived products, including dairy, due to a “growing global awareness of animal cruelty that has increased demand for dairy alternatives at a rapid pace.”

After studying both source (e.g., soy, almond, coconut, rice, oats, and others) and distribution channels (e.g., supermarkets, hypermarkets, convenience stores, online, retail, and others) the market research firm predicts the vegan market will grow at a CAGR of 12.6%, from $26.7B in 2023 to $61.4B by 2033.

With the rise of the flexitarian eater, there’s a much larger, more mainstream appetite for plant-based eating, Cargill’s Mark Fahlin says. Photo courtesy of Cargill.

Persistence Market Research’s projections for vegan cheese, once a niche product found primarily in health food stores, are even higher. It suggests that dollar sales will climb at 12.6% CAGR from 2024-2031, with vegan cheese sales of $23 million and $86 million in 2024 and 2031, respectively.

“This growth is fueled by increasing lactose intolerance, rising vegan and flexitarian populations, and the mounting environmental concerns associated with dairy farming,” the report stated.

Specialty flavors fuel excitement for plant-based milks

In addition to vegan cheese, the top growth driver in dairy alternatives are plant-based milks. Derived from sources like almonds, soy, rice, oats, cashew, and coconut, plant-based milks are experiencing “robust growth” in the dairy alternatives market, driven by increasing health consciousness, dietary preferences, and environmental concerns, according to Persistence Market Research.

“The global plant-based milk market is projected to grow at a CAGR of 9.2% from 2023 to 2033, increasing from $14.9 billion in 2023 to $36.2 billion by 2033,” Persistence Market Research data reports.

Within dairy alternatives, almond milk has true staying power, states Charice Grace, manager of Trade Marketing & Stewardship for Modesto, Calif.-based Almond Board of California.

“The largest alt-dairy subcategory for almond ingredients is still beverages, which Innova found has had a small increase in launches between 2023 to 2024,” Grace says. “Manufacturers are getting creative with specialty flavors to keep alternative milks trendy and in-demand. Almond milk’s asset among plant-based milk options is its smooth texture and relatively neutral taste, which appeals to a wide variety of consumers. As a result, in the past year we’ve seen companies launch almond-based beverages and creamers inspired by lavender, brown sugar, coffee cake, cinnamon churro, and more.

“Looking ahead using AI-driven insights from Tastewise, almond milk’s neutral taste can be a great vessel to support trending alt-dairy flavors from 2023-2024, like snickerdoodle, pumpkin spice latte, tiramisu, and speculoos,” she continues.

New flavors and applications have made plant-based products more appealing. Photo courtesy of Bluegrass Ingredients.

Bluegrass Ingredients’ Losee points out the “rapid rise” in oatmilk innovation and oat ingredients has “surprised even the most seasoned food industry trend experts, who anticipated movement toward this plant-based alternative but did not expect mass market acceptance so quickly.

“We’ve seen that excitement curb a bit in recent months, but it’s become more than a substitute,” he continues. “It’s a sought-after flavor in its own right, driving applications across categories. Today, it’s not just oat milk that’s popular, it’s all types of oat ingredients.”

The draw of non-dairy

Mark Fahlin, category marketing manager, Health & Nutrition and Dairy at Minneapolis-based Cargill, concurs that the milk alternative space, which accounts for 36% of all plant-based food dollar sales, remains the “behemoth of the plant-based world.”

Almond milk sales are No. 1, followed by oatmilk, while soy milk  — once the only game in town — is now a distant third, he says.

“Despite the recent slowdown, the plant-based dairy alternative market remains a sizeable prize,” Fahlin says. “Data from the Good Food Institute and SPINS pegged the plant-based milk category at $2.9 billion in 2023. Nearly half of all U.S. household purchase plant-based milk, with a 79% repeat purchase rate, and plant-based options account for about 15% of total U.S. retail milk dollar sales.”

Consumers also are using plant-based milks as the gateway to other dairy-alternative categories, including plant-based yogurts, ice creams, cream, coffee creamers, and puddings, Fahlin relays.

Plant-based cheese may be another space to watch, given all the interest and R&D investment being directed toward vegan cheese, he adds.

Founded in 2019 by Nathaniel Chu and Josh Moser, the Oakland, Calif.-based Plonts opened a pilot plant and utilized a $12M seed round to launch its first product, an aged Plonts Cheddar, in select restaurants in New York City and San Francisco in early August. The plant-based company is using fermentation to turn soy milk into a specially developed blend of cultures and enzymes designed to create tangy, cheesy flavors as the cheese ages. The result is a bold cheddar that slices, shreds and melts.

"As a chef, I believe it is increasingly important to understand how and when meat and dairy alternatives can supplement your menu," says Brandon Jew, Moongate Lounge & Mister Jiu's founder and executive chef. "There is already a rich history in Chinese cuisine that leans heavily into the creativity of using soy milk. Plonts is a new product with Old World sensibilities, providing yet another way to enjoy soy milk in a cheese that maintains the cheesy, melty properties of a cheddar and compels you to consider it in place of dairy cheese.”

An Ho, director of food science and product innovation at IFPC, St. Louis, also extols the benefits of soy as a very mature and a complete protein.

“Tree nut milk alternatives have good taste and … are always popular, but there are issues with a lot of the environmental issues that come with how much energy/water is used to support these plants,” Ho says. “Pea, lentil, faba, barley milks have a smaller footprint, but the protein profile is not as complete.

Plonts plant-based aged cheddar, available at the Moongate Lounge in San Francisco, is featured in this sandwich using housemade milk bread and featuring bok choy, Fresno chili mornay sauce, bright fermented cabbage and roasted maitake mushrooms. Photo by Erin Ng.

“I think plant-based alternatives will be steady, maybe grow if the manufacturers justify the lack of nutrition with the cost,” Ho continues. “It is a great substitute as an ingredient, but not nutritionally. There is fortification to mimic dairy milk, so that says that dairy milk is nutritious. I think that dairy based milk might not decrease at a higher rate. Maybe it will increase due to nutritional value, cost and not having so many additives.”/p>

Replicating taste and texture

When improving the nutritional profile of plant-based dairy products, taste and functionality are often compromised, notes Ingredion’s Gonzales and Circana’s Crawford.

Crawford affirms that cleaner-label, plant-based products are seeing some success with organic plant-based milks and “natural” plant-based creamers.

“The big challenge for PB dairy continues to be texture and product performance. Oat milk saw strong growth due to performance (more like dairy), particularly as used in coffee,” he states. “In Cheese, PB performance is still lacking, and while we saw strong growth, we now see large declines (-6.4% in dollars and -8.7% in volume). We see the growth in PB Cream Cheese where a PB product can perform more like dairy based on usage (i.e., spreading rather than cooking).”

Gonzales suggests that dairy manufacturers are bringing their A game to improve their offerings by bringing new and better ingredients to overcome taste and texture challenges.

Time and experimentation also can help in making dairy alternatives more appealing to consumers.

“Some examples that we can see in the market are plant-based milk, yogurts and cheese products, where the latest versions launched are much better than the ones that hit the market a few years ago,” Gonzales relays. “We’re helping companies in the dairy alternative space improve taste and texture and making products healthier. This includes cleaning up product labels and improving the nutritional profile with higher protein content, sugar reduction, fiber content, and more.”

Clean label in plant-based colors also is helping dairy processors when it comes to new product development in the dairy alternatives space, says Alice Lee, technical marketing manager at GNT USA, Dallas, N.C.

“Visual appeal is another critical factor for consumer acceptance and product differentiation,” Lee states. “The use of plant-based colors can significantly help overcome these hurdles. Many vibrant colors such as pinks, purples, yellows, and oranges can be achieved using fruit, vegetable, and plant sources such as beetroot, carrots, turmeric, and apple.”

Taking nutrition to the next level

“The global market for dairy alternatives is still growing: Innova reports that four of six regions including Middle East and Africa, Asia, Europe, and Australasia show exponential growth, but launch activity is slowing down in North America and Latin America,” states the Almond Board of California’s Grace.

“As the market expands and presents consumers with more choices, it will be important to deliver on consumer priorities like taste and nutrition. According to Innova Market Insights, consumers say they’ve increased their consumption of dairy alternatives because there’s more variety and novelty available,” Grace continues. “… There will still be room for both dairy and dairy-free products in the market — a McKinsey & Company survey noted that a quarter of consumers purchase both types.”

ADM’s Hörmann concurs the “vast opportunity” for non-dairy, as well as traditional dairy and blended dairy beverages, to take nutrition to the next level.

“Incorporating microbiome solutions like our Bifidobacterium longum CECT7347 heat-treated postbiotic (HT-ES1), which withstands harsh processing conditions like high heat and pasteurization, into plant-based dairy formulations can deliver on-trend gut health support,” he explains. “ADM’s new research, recently published in Gut Microbes, demonstrates that ES1 probiotic and HT-ES1 postbiotic may support overall gut and digestive health.”

As for the future of dairy alternatives, IFPC’s HO thinks food manufacturers will accommodate both sides:  dairy or plant based. “We just need to explain the advantages and disadvantages upfront when speaking to a customer,” she says.

Cargill’s Fahlin concurs that consumers are flexing between plant-based and traditional dairy milks, with both sitting side-by-side in the refrigerator.

“We see multiple macro factors that will give the plant-based dairy alternative category tailwinds for the future. Health and wellness trends are a part of that, as is our increasing ethnically diverse demographic,” Fahlin concludes. “Add in consumers’ growing concerns about the environment, all the technological advancements already here or on the near horizon, and the impact of dietary restrictions like lactose intolerance, and it’s clear that these products still have plenty of room to grow. Consumers are looking for choices; plant-based dairy alternatives give them more options.”