Plant-based dairy drink alternatives, such as grain, nut, rice, and seed, have seen a significant increase in popularity among Aussies in recent years, largely due to their health benefits. Nonetheless, the growth of this category is being restricted by shortcomings in flavor, texture, aroma, and high costs. The emergence of new technologies, such as precision fermentation, plays a pivotal role in fostering the growth potential of the plant-based dairy drinks market in Australia, which is projected to expand at a compound annual growth rate (CAGR) of 5–6% during 2024–28^, says GlobalData, a leading data and analytics company.
Mani Bhushan Shukla, Consumer Analyst at GlobalData, comments: “Although white milk is deeply rooted in the Australian diet, the past five years have witnessed a notable rise in the popularity of plant-based dairy substitutes. This trend has been largely fueled by a rising awareness of lactose intolerance and milk allergies. Additionally, the introduction of innovative products that offer a more authentic milk-like taste and texture, along with nutrient fortification, has captured the attention of consumers seeking plant-based dairy alternatives.”
Deepak Nautiyal, Consumer and Retail Commercial Director, Asia-Pacific and Middle East, GlobalData, adds: “Oat and almond milk have secured a prominent place in the Australian market, recognized for their enjoyable flavors, creamy textures, and healthful image. Likewise, pea milk is increasingly capturing consumer attention with its smooth mouthfeel and high protein content. Consequently, the volume sales of grain, nut, rice, and seed milk alternatives are set to continue their dominance over soymilk and soy drinks through 2028^, driven by the influx of new competitors and product offerings. The strong marketing push by brands, such as Cauldron Ferm, Vitasoy Australia, Noumi, and Alternative Dairy Co, will further expedite the category’s growth.”
Shukla notes: “In the past few years, the Australian market has seen the emergence of newer products derived from groundnut, pistachio, algae, and seaweed, which assert superior organoleptic and nutritional benefits over soy, oat, and almond milk. However, each of these alternatives presents its own set of advantages and disadvantages, leading to trade-offs in health, flavor, and sustainability. This has prompted manufacturers to explore new ingredient possibilities.”
Nautiyal continues: “Plant-based dairy alternatives are yet to fully establish themselves in the mass retail sector, indicating a need for further development. GlobalData’s 2023 consumer survey highlights that 66% of Aussies are reluctant to try dairy alternatives, primarily due to issues related to taste, texture, and smell, even with marketing claims like ‘free-from’, ‘low/no’, plant-based, and lab-cultivated*. Additionally, 22% of survey participants noted that they find these alternatives to be too expensive. This necessitates a greater allocation of resources towards research and development in this sector.”
Shukla concludes: “In their quest for innovation, manufacturers are delving into advanced technologies like precision fermentation. This method entails a regulated fermentation process utilizing genetically engineered microflora to transform raw materials into proteins. It offers the possibility of producing animal-free dairy substitutes that closely resemble the taste and look of animal milk, while eliminating undesirable components such as lactose.
“Precision fermentation innovators such as Cauldron, Perfect Day, Phyx44, Change Foods, and All G Foods are leading the way in the Asia-Pacific region. While this technology could revolutionize the market for dairy alternatives, the primary challenge will be to foster acceptance of GMO products among Australian consumers.”
^GlobalData Consumer Intelligence Center – Market Analyzers, accessed in October 2024
*GlobalData Q1 2023 Consumer Survey – Australia, published in May 2023, with 513 respondents
