Inflationary challenges are driving retail value performance in dairy products and alternatives in 2022, but slight drop in retail volume. Plant-based dairy remains the driver of growth as consumers continue to associate these alternatives as a healthy product. There is also room to grow product innovations around functionality, sustainability and elevated experiences.
This report comes in PPT.
Aside from supply chain bottlenecks and high transportation costs, the dairy products and alternatives industry is facing inflationary pressures from industry-specific issues, like the rise in feed and fertiliser prices. This has resulted in increased demand for affordable offerings and changes to price/package mix by manufacturers.
Plant-based dairy continues to show strong potential, and this is expected to continue in years to come, gaining penetration across the entire dairy spectrum. The future of plant-based dairy will be driven by efforts directed towards replicating dairy as much as possible.
Fortified/functional dairy products and alternatives are perceived as proactive solutions to tackle health concerns and are gaining traction. Opportunities are emerging for functional products in the dairy products and alternatives industry that address consumer needs relating to immunity, gut health and mental wellbeing.
Manufacturers and ingredients companies are continuously working on improving their long-term sustainability credentials. Dairy players are no exception and are innovating in areas such as carbon neutrality and food waste.
As consumers have fewer out-of-home activities than pre-pandemic, and are reducing lifestyle expenses, dairy products and alternatives positioned for elevated consumption experiences within the home are growing.
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