The global market for dairy alternative drinks is expected to reach US$16.3 billion in 2018, skyrocketing from $7.4 billion in 2010, according to recent data from Innova Market Insights. Dairy alternative drinks accounted for 7 percent of global dairy launches recorded by Innova in 2016, up from 6 percent in 2015. Actual global launch numbers more than doubled over a 5-year period, and more than half of the launches were positioned as lactose free, nearly 40 percent as vegan and just under one-quarter as GMO-free.

“The dairy alternatives market has seen rising levels of interest in recent years, spurred mainly by consumers increasingly looking for lactose-free, dairy-free and plant-based/vegan options as healthy lifestyle choices, rather than regarding them as simply for those with allergies or intolerances," said Lu Ann Williams, director of innovation, Innova Market Insights. “The category has been further boosted by the growing availability and promotion of plant-based options to traditional dairy lines, particularly beverages, but also cultured products such as yogurt, frozen desserts and ice cream, creamers and cheese."

Significant developments impacting sector growth include the acquisition of WhiteWave in 2016, presenting Danone with the opportunity to further developing its interests in this dynamic market in both North America and Europe. In another key region, Want Want, one of Greater China’s leading food processing companies, recently announced its expansion into soy and other plant-based beverages. China is enjoying particularly strong growth for dairy alternative drinks, with a CAGR of 18.7 percent forecast between 2010 and 2018, reaching a market value of $6.7 billion, compared with a compound annual growth rate (CAGR) of 10 percent in the United States.

Innova called out “Plant Powered Growth" as a top trend for 2017, noting plant-based foods are seeing increased demand from those who do not want to commit to a full vegan or even vegetarian lifestyle, but would rather pick and choose to suit their lifestyle, social life, or health conditions. Dairy alternative launches grew at a CAGR of 20 percent over the 2012–2016 period. Meat substitutes had a CAGR of 14 percent over the period, while the use of a vegan positioning in global food and beverage launches tripled from 2012 to 2016.

“In the move to offer something new, we are starting to see an increasing variety of non-soy plant-based alternatives, including cereals such as rice, oats and barley, and nuts—such as almonds, hazelnuts and macadamias—as well as more unusual options such as hemp and flaxseed," Williams noted. “There has been ongoing launch activity for a range of increasingly sophisticated flavors and blends of non-dairy milks from different sources. In line with the milks market as a whole, there has been a strong move into fashionable milk-based coffee drinks."

Products with free-from label claims have become big business as mainstream society increasingly seeks cleaner ingredients. From gluten, dairy, grains and genetically modified organisms (GMOs) to artificial colors, flavors and preservatives, limiting and omitting certain ingredients is becoming the new norm.