AUSTRALIA | Plant-based dairy drink alternatives, such as grain, nut, rice, and seed, have seen a significant increase in popularity among Aussies in recent years, mainly due to their health benefits.
The emergence of new technologies, such as precision fermentation, has played a pivotal role in fostering the growth potential of the plant-based dairy drinks market in Australia.
GlobalData projected that the market would expand at a compound annual growth rate (CAGR) of five to six percent during 2024–28. Shortcomings in flavour, texture, aroma, and high costs have also restricted the category's growth.
Mani Bhushan Shukla, Consumer Analyst at GlobalData, said that although white milk was deeply rooted in the Australian diet, the past five years have witnessed a notable rise in the popularity of plant-based dairy substitutes.
“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,” said Shukla.
“However, each alternative presents advantages and disadvantages, leading to health, flavour, and sustainability trade-offs. This has prompted manufacturers to explore new ingredient possibilities.”
A rising awareness of lactose intolerance and milk allergies has primarily fueled this trend. Innovative products that offer a more authentic milk-like taste, texture, and nutrient fortification have captured consumers' attention as they seek plant-based dairy alternatives.
Deepak Nautiyal, Consumer and Retail Commercial Director, Asia-Pacific and Middle East, GlobalData, added that oat and almond milk secured a prominent place in the Australian market, recognised for their enjoyable flavours, creamy textures, and healthful image.
Likewise, pea milk increasingly captured consumer attention with its smooth mouthfeel and high protein content. Consequently, the volume sales of grain, nut, rice, and seed milk alternatives were set to continue their dominance over soymilk and soy drinks through 2028, driven by the influx of new competitors and product offerings.
Brands like Cauldron Ferm, Vitasoy Australia, Noumi, and Alternative Dairy Co. will further expedite the category’s growth with their strong marketing pushes.
“Plant-based dairy alternatives are yet to fully establish themselves in the mass retail sector, indicating a need for further development,” said Nautiyal.
“GlobalData’s 2023 consumer survey highlights that 66 percent 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 percent of survey participants found these alternatives too expensive. This necessitates a greater allocation of resources towards research and development in this sector.”
Shukla mentioned that manufacturers were delving into advanced technologies like precision fermentation in their quest for innovation. This method entailed a regulated fermentation process utilising genetically engineered microflora to transform raw materials into proteins.
It offered 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 revolutionise the market for dairy alternatives, the primary challenge will be to foster acceptance of GMO products among Australian consumers.”
