Shelves have been inundated with an ever-expanding array of plant-based dairy products. This is a response to the increase in flexitarian diets and the consumer perception of free from dairy as healthier and good for digestion. This report analyses factors driving adoption, key hotspots that manufacturers should be exploring for future investments, developments on the ingredients front and key recommendations to remain relevant moving forward.
This report comes in PPT.
Dairy is under siege in key markets, most significantly in Western countries. This is due to a wide range of reasons, including health, concerning indigestion and allergies/intolerances, and changes in consumer beliefs around sustainability and animal welfare. On the other hand, plant-based dairy continues to surge in popularity. The rise of flexitarian diets is the driving force, and the key motivators of dairy-free diets include health reasons and good digestion.
Despite the hype for plant-based foods, the penetration of dairy-free alternatives remains low in milk, yoghurt and ice cream globally. In the West, the US dominates and leads innovation, but fast growth is also expected in Western European markets such as the UK and France. On the other hand, APAC draws a different dynamic. It is the region with largest sales coming from traditional soy milk and popular nut-based drinks. Western manufacturers are looking to enter the region through the foodservice channel and e-commerce.
In recent years, shelves have been inundated with an ever-expanding array of plant-based dairy products. While soy milk has struggled due to bad press around sourcing from GMO crops, other non-soy milk alternatives have skyrocketed. Pea is one of the newest ingredients entering the category, benefiting from its high protein content and its sustainability credentials. Other more exotic ingredients, such as pistachios and pili nuts, have also arrived on the scene.
Dairy manufacturers are following several approaches to benefit from the plant-based movement. On the one hand, some players are leveraging the trend as a means of revamping their struggling dairy brands. This is the case of Danone’s launch of plant-based Activia and Chobani’s entry in plant-based yoghurt in 2019 to reverse declining sales. On the other hand, there are also players focusing on extending their fastest-growing brands into the plant-based space. This is exactly what General Mills and Lactalis pursued with their successful brands Oui and Siggi’s.
In packaged food we consider two aspects of food sales: 1) Retail sales. 2) Foodservice. Retail sales is defined as sales through establishments primarily engaged in the sale of fresh, packaged and prepared foods for home preparation and consumption. This excludes hotels, restaurant, cafés, duty free sales and institutional sales (canteens, prisons/jails, hospitals, army, etc). Our retail definition EXCLUDES the purchase of food products from foodservice outlets for consumption off-premises, eg impulse confectionery bought from counters of cafés/bars. This falls under foodservice sales. For foodservice, we capture all sales to foodservice outlets, regardless of whether the products are eventually consumed on-premise or off-premise. Foodservice sales is defined as sales to consumer foodservice outlets that serve the general public in a non-captive environment. Outlets include cafés/bars, FSR (full-service restaurants), fast food, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks. Sales to semicaptive foodservice outlets are also included. This describes outlets located in leisure, travel and retail environments. 1) Retail refers to units located in retail outlets such as department stores, shopping malls, shopping centres, super/hypermarkets etc. 2) Leisure refers to units located in leisure establishments such as museums, health clubs, cinemas, theatres, theme parks and sports stadiums. 3) Travel refers to units located in based in airports, rail stations, coach stations, motorway service stations offering gas facilities etc. Beyond the scope of the foodservice research are captive foodservice units that serve captive populations around institutions such as hospitals, schools, and prisons. This is also known as institutional sales.See All of Our Definitions
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