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Consumers are changing the way they approach health risks and wellness-related decisions. Specialty diets, plant-based products, and their associated benefits continue to grow in demand and acceptance globally.
Increasing consumption of plant-based milk is at the forefront of this growth, driven mainly by a growing intolerance to dairy products. According to the statistics released by World Population Review for 2022, lactose intolerance is most common in Asian countries, particularly in East Asia, where nearly 70 percent to 100 percent of the population has lactose intolerance. In Northern and Central Europe, close to five percent of the population suffers from lactose intolerance.
Six in ten consumers surveyed across the globe from the NielsenIQ Global Health and Wellness report already buy or are more likely to buy plant-based products than two years ago. Over 65 percent of respondents said they would pay more for plant-based products.
As this trend develops further, businesses must also shift along with this consumer shift. Here are three dairy-alternative trends to look out for in Asia for 2023 and beyond.
The COVID-19 pandemic has prompted consumers to switch to healthier versions of the food they had been consuming . More consumers are paying attention to what they put inside their bodies whereas natural immunity and health are becoming more prevalent. One example is how people are now opting for alternatives that are enriched with vitamins and nutrients, are less heavy, low in calories, and are more nutritious to help them fight diseases and improve immunity.
In practice, the ripple of innovation with this new trend of plant-based and dairy alternatives provides consumers with a variety of benefits to choose from ranging across calories, water content, fat, fiber, protein, and variations on vitamins and nutrients, when compared to cow milk.
Non-dairy or dairy alternatives have seen strong demand across the region in the past decade with the steadfast core dairy alternative in Asia being soy milk. In fact, in markets like Thailand and Hong Kong, the soymilk segment is even bigger than cow’s milk.
It is also expected to see an extension of this dairy alternative trend into a wider alternative range such as pea, barley, and hemp milk. On the other hand, rice and nut dairy alternatives have been established in several key markets across Asia, with successful growth over the past decade while a few have done well to enter several segments of dairy, such as soy-based yogurts and a few plant-based options in cheese and ice cream.
Across the dairy alternatives market landscape, oat milk continues to be the rising star. Searches for oat milk were up 15 percent (by over 50,000 monthly searches) in July 2021. Top search terms include variations of “oatmilk”, “oat milk”, “unsweetened oat milk”, “creamy oatmilk”, and “vanilla oatmilk”.
Oat products, oat fiber, and functional oat flours possess a variety of attributes that make them an ideal choice in the formulation of dairy-free alternatives. Oat milk is also comparatively lower in fat than traditional milk and much higher in fiber, making it far easier to digest. Health credentials are also associated with oats in general due to their prebiotic fiber content adding to its already good reputation. As a result, the growing prominence of oat products has urged beverage chains to leverage the trend and cater to widespread dairy-free beverage customers.
On environmental impact, oat milk uses 60 percent less energy than cow milk according to a study. The same study also reveals that oats use 80 percent fewer gas emissions and 80 percent less land than cow milk. Still, it must be noted that oats are grown repeatedly on the same land, which can potentially lead to an increase in pests, soil depletion, and crop fertility.
Today’s consumer is increasingly invested in the source of food as it ties in with major global concerns of health, sustainability, and waste. It is clear that while consumers are on the search for better-for-you foods and beverages, they are also eager to learn where exactly everything comes from and if their products are eco-conscious. As a result, these factors are now becoming part of their purchasing decision and there are movements being made towards more clean label options and ingredient transparency.
Given many researches show that cow’s milk has significantly higher environmental impacts than plant-based alternatives across all metrics from greenhouse gas emissions to the use of land and freshwater, many consumers are switching to plant-based alternatives in the hope to reduce the environmental footprint.
Moving forward, greater transparency and visibility of value and supply chains will become even more critical as these consumers have growing understanding on the impact of diets – dairy alternatives included – on the environment.
Asia is projected to be an investment hub for dairy alternatives in the years ahead. Besides increased consumption and production of plant-based dairy-free products, evolving dietary habits and lifestyle changes in the region have also escalated the prevalence of obesity and diabetes in markets like China, India, and Japan.
Dairy alternatives, excluding soy, are showing a strong forecasted CAGR with Hong Kong, Singapore, Japan, Thailand, Indonesia, and Malaysia all projected to exceed double-digit growth in the next few years.
Recently, suppliers have established local production in Asia such as Singapore and Indonesia to bring the choice closer to local Asian Countries for better efficient logistics, localized taste profiles, and more attainable price points for consumers. A quick search query showed that the most popular food and beverage searches are for vegan products. Market data also showed that the vegan segment captured a 16 percent CAGR as dairy-free products gains interest throughout Asia. McKinsey’s Dairy Survey revealed that 73 percent of millennials and Generation Z reported purchasing a dairy-free alternative in the past 12 months.
Despite the growing demand for dairy alternatives across Asia, only a few alternatives have managed to generate a strong mainstream shopper audience but as manufacturers achieve more accessible price points, innovative formats, and local taste profiles, this trend will make a strong stand of permanence for Asia.
Reach out to DKSH for a better understanding of how food manufacturers and alternative dairy product brands can innovate, build market presence, and subsequently benefit from these growing consumer trends.