(Updated May 10, 2020) | The plant-based dairy alternatives market is expected to reach $35.8 billion by 2026, according to a new report from global supply chain, pricing and financial services company Czarnikow.
A number of factors will influence sales, Czarnikow predicts. These include allergies, sustainability, animal welfare, taste, and perceived health benefits.
Experts have been tracking the rise of the vegan dairy market for years. A 2018 report released by Dutch bank Rabobank suggests that the best way for the milk industry to survive in a market where plant-based alternatives continue to grow is to adapt.
Titled “Dare Not to Dairy—What the Rise of Dairy-Free Means for Dairy… and How the Industry Can Respond,” the Rabobank dairy industry report revealed that the plant-based milk market accounts for three percent of the $600 billion global dairy industry.
In a five-year period, the global plant-based milk market grew by four percent while sales of cow’s milk dropped by 3.5 percent. In order to combat the challenges faced by the failing milk industry, one expert suggested that companies may want to follow the lead of vegan milk brands.
“Global demand for dairy is expected to grow by 2.5 percent for years to come, with demand for non-fluid categories offsetting weak fluid milk sales,” explained Tom Bailey, RaboResearch Senior Analyst – Dairy. “While it’s not essential to diversify into dairy alternatives, it would be wise for the dairy industry to at least learn one thing from the success of dairy alternatives, which may be putting the consumer first and trading in the old grass-to-glass model for glass-to-grass.”
Rise of the Vegan Milk Market
Plant-based milk is not new, but in recent years, the influx of brands and new types of plant-based milk has put the dairy industry on the defense, culminating in a legal battle sparked by the dairy industry over the right to use the word “milk” on vegan plant milks.
The U.S. dairy industry has tried other methods to lure consumers back to traditional cow’s milk with new campaigns such as Undeniably Dairy. Tom Bailey, the Rabobank analyst who wrote the report, told CNBC that vegan milk companies are growing quickly due to successful marketing campaigns that appeal to trends like health and wellness.
With the global plant-based milk market expected to exceed $34 billion by 2024, consumers can likely expect more milk alternatives on the horizon, including technological advancements in food technology brought forward by cellular agriculture startup Perfect Day, which aims to create dairy products without the cow.