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Dairy alternatives rise as consumers going dairy-free

Staff Writer |
Dairy alternatives are on a rise as consumers are increasingly going dairy-free, particularly when it comes to fluid "milk" used on things like cereal or in coffees.

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More recently, biotechnology has entered the arena, brewing milk proteins through biofermentation.

The time is right for the dairy sector to reflect on the success of alternative dairy products and to consider applying those lessons to dairy, according to the latest RaboResearch dairy report Dare Not to Dairy - What the Rise of Dairy-Free Means for Dairy... and How the Industry Can Respond.

Dairy alternatives have competed in the dairy space for decades, but competition has intensified as dairy alternatives broaden in types, styles, and categories of product.

Global retail sales growth for dairy alternatives has soared at a rate of 8 percent annually over the last ten years. With retail sales valued at $15.6bn, dairy-free ‘milk’ represented 12 percent of total fluid milk and alternative sales globally in 2017, according to Euromonitor.

Nutrition, price, and flavour tend to favour dairy, but changing consumer perceptions around health, lifestyle choices, curiosity, and perceived sustainability are increasingly drawing more people to select ‘dairy-free’ products.

The challenge for dairy lies mostly in fluid milk, where retail sales in western Europe ($18.6bn) and the US ($12.5bn) declined at an annual rate of 5 percent and 3 percent, respectively, in the five years to 2017, according to Euromonitor.

The results over the last five years have favoured dairy players who have invested in milk alternatives across the supply chain – from planting almond trees to buying brands.

The investments in dairy alternatives have shown returns above standalone dairy.

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