Plant-based dairy drinks alternatives, particularly soy, oat, and almond milk, have gained considerable popularity among Malaysians in recent years due to their health benefits. However, the category’s mainstream penetration is being constrained by deficiencies in flavor, texture, and aroma, and high product prices. New technologies such as precision fermentation are thereby pivotal for catalyzing the growth of Malaysia’s plant-based dairy drinks alternatives market, which is less than a tenth the size of its milk market in volumes terms*, according to GlobalData, a leading data and analytics company.
Bobby Verghese, Consumer Analyst at GlobalData, comments: “While milk is ingrained in Malaysian diets, plant-based dairy substitutes have gained considerable traction in volume and value terms over the last five years, largely stimulated by the growing awareness of lactose intolerance and milk allergies. Owing to the high prevalence of lactose intolerance among Malaysian adults, there is a growing demand for milk alternatives that are rich in calcium. Additionally, new product launches with improved milk-like flavor and texture, and nutrient-fortification have bolstered consumer interest in dairy alternatives drinks.”
Tim Hill, Key Account Director at GlobalData Singapore, notes: “Though soy is a staple in Malaysian diets, consumption of soymilk and soy drinks has waned since the onset of the pandemic*. Contrastingly, the consumption of grain, nut, rice, and seed milk alternatives, which contributed to over half of Malaysia’s dairy alternatives drinks’ overall volumes*, surged over 2020–22. This is partly due to the rising soy import prices and the increasing choice of dairy alternatives products made from oats, almonds, coconut, and green peas that are available in retail stores.
“Oat and almond milk have already gained popularity for their pleasant flavor, creaminess, and health image. Pea milk is also gaining consumer appeal due to its milky mouthfeel and high protein content. As a result, volume sales of grain, nut, rice, and seed milk alternatives will continue to outperform soymilk and soy drinks through 2027*, underpinned by new entrants and new product launches. The strong marketing push by brands, such as Almond Breeze, Anpire, Australia’s Own Organic, Farm Fresh, Oatly, Oatside, Otis, Oya, Plenish, Sesamilk, So Good, Snappea, Sproud, and 137 Degrees, will also accelerate the category’s growth.”
Verghese adds: “Newer products made with groundnut, pistachio, algae, and seaweed have already made their way to the Malaysian market in recent years, claiming better organoleptic and nutritional benefits than soy, oat, and almond milk. However, each of these products has its pros and cons, with trade-offs between health, taste, and sustainability features. As a result, manufacturers are scouting for novel ingredients.”
Hill remarks: “Plant-based dairy alternatives still have a long way to go to achieve mass-retail penetration. GlobalData’s 2023 consumer survey reveals that taste, texture, and smell are the key factors that ward off 69% of Malaysian consumers from trying dairy alternatives with claims, such as ‘free-from’, ‘low/no’, plant-based, and lab-cultivated**. Additionally, a quarter of Malaysian survey respondents said they found dairy alternatives too expensive**. This calls for increased investment into research and development in the segment.”
Verghese concludes: “Manufacturers are thereby exploring innovative technologies, such as precision fermentation. This involves a controlled fermentation process using genetically modified microflora to convert raw materials into proteins. This technique can be used to produce animal-free dairy alternatives that closely mimic the taste and appearance of animal milk, minus the undesired nutrients such as lactose. Precision fermentation startups, such as Perfect Day, All G Foods, Cauldron, Phyx44, and Changing Bio are spearheading the precision fermentation movement in the Asia-Pacific. While the technology can revolutionize the dairy alternatives market, the bigger challenge will be to gain acceptance for genetically modified organisms (GMO) products among Malaysian consumers.”
* GlobalData Consumer Intelligence Center – Market Analyzers, accessed in July 2023
** GlobalData Q1 2023 Consumer Survey – Malaysia, with 510 respondents, published in May 2023
