Aug 07 2019
Rising health consciousness and veganism’s growing popularity have contributed to skyrocketing demand for non-dairy milks over the past five years. According to industry research firm IBISWorld, revenue for the Soy and Almond Milk Production industry, which also includes other alternative milk varieties such as coconut and rice milk, is expected to grow at an annualised 8.3% over the five years through 2019-20.
“A rising perception that alternative milk products are healthier than dairy milk has boosted sales over the past five years. As a result, the industry’s success over the period has largely come at the expense of the dairy sector,” said IBISWorld Senior Industry Analyst, Matthew Reeves.
Per capita milk consumption is expected to decline at an annualised 0.6% over the five years through 2019-20. Conversely, per capita plant-based milk consumption is anticipated to increase at an annualised 16.9% over the same period, and now accounts for approximately 7% of all milk consumed in Australia.
“The greatest decline in per capita milk consumption has come from reduced and low-fat milk. This trend indicates that the preferences of health-conscious Australians are changing from the perceived healthier varieties of dairy milk to non-dairy alternatives,” said Mr Reeves.
Soy milk is the largest product segment in the Soy and Almond Milk Production industry, accounting for over 47% of industry revenue. However, soy milk has faced rising competition from other varieties, particularly almond milk and coconut milk. Almond milk, which now accounts for approximately 44% of industry revenue, is lower in carbohydrates than soy milk and is therefore seen as a superior alternative to dairy milk than soy milk.
Coconut milk has benefited from an increase in the number of consumers adopting vegan diets, with demand increasing in line along with coconut water and shredded coconut. Coconut milk’s rising popularity is also attributable to its increased use in cooking, with the rising popularity of Asian cuisines. Consequently, coconut milk is expected to account for 3.3% of industry revenue in 2019-20.
“One area that had traditionally limited the Soy and Almond Milk Production industry’s growth was the relative incompatibility of the products for use by cafes. Alternative milks have generally had a tendency to split when heated, making them less suitable for coffee applications than dairy milk. However, industry operators have developed successful barista-friendly dairy milk alternatives, creating a new avenue for industry growth,” said Mr Reeves.
The range of specialty plant-based milks designed for use in cafes has expanded over the past five years:
- Freedom Foods launched its MilkLab range of non-dairy milk for baristas in 2015.
- In mid-2018, Freedom Foods added Almond Breeze Barista Blend to its portfolio.
- Lion developed almond and oat flavours of its Vitasoy Café for Baristas range in 2016 and early 2019, respectively. These new varieties will likely intensify the competitive pressures faced by operators in the Dairy Cattle Farming and Milk and Cream Processing
“Demand for hemp milk, which has only been legal for consumption since November 2017, is forecast to grow substantially over the next five years. Pea protein milk is also gaining traction among consumers. Freedom Foods has launched three flavours of pea protein milk since October 2018 to compete with imported products, such as from the United States-based Ripple Foods,” said Mr Reeves.
In response to rising competition from alternative milks, the traditional dairy sector has attempted to wrestle back momentum in the milk market by staking a claim to the name ‘milk’. Dairy farmers are demanding that alternative drinks not derived from animals be marketed as juice instead. One of the peak dairy industry bodies, Australian Dairy Farmers, has lobbied the Federal Government to review and revise regulations relating to the labelling and promotion of plant-based alternatives to dairy milk.
IBISWorld reports used to develop this release:
- Soy and Almond Milk Production in Australia
- Dairy Cattle Farming in Australia
- Milk and Cream Processing in Australia
For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3641
Mobile: 0422 773 995