What’s Driving the Non-Dairy Trend?
Non-dairy formulations of traditional dairy products and ingredients are increasingly more common to see across CPG and foodservice offerings; these are any products that traditionally contain milk, but have been formulated with a dairy-free alternative—typically plants, nuts or grains.
Common dairy-free item alternatives that consumers are seeing include:
Milk
Yogurt
Ice Cream
Cheese
Cream/Sour Cream
With soy milk hitting peak popularity back in 2010, dairy alternatives are not a new trend, nor are they going anywhere. The non-dairy market's long-term growth is estimated at 9.4% from 2024 to 2029, rising from $3.7B to $4.1B.1 There’s long-term potential for brands who formulate with non-dairy ingredients to continue to appeal to consumers.
The growth of this segment is predicted to occur organically as it’s driven by younger consumers.1 Gen Z and Millennials are driving demand for non-dairy products, and they’ll continue to represent an increasing share of total consumers. These groups are primarily choosing non-dairy for health benefits and environmental reasons.
Driver 1: Avoiding Lactose
Many consumers avoid dairy for digestive reasons. Difficulty digesting lactose and lactose intolerance are very prevalent, with 65% of adults worldwide unable to break down and/or absorb lactose.2 Growing popularity of non-dairy products has brought renewed awareness to the prevalence of lactose intolerance and has steered consumers towards choosing a dairy-free diet.
Driver 2: Other Health Benefits
Many may think that a consumer looking for non-dairy products is avoiding lactose, which is true for a portion of shoppers, but healthfulness goes beyond intolerances and allergies affecting digestion. Many of today’s non-dairy consumers are choosing these products for their health benefits.
For example, some dairy ingredients—such as cream and butter—can be calorie dense. So, for some formulations there’s opportunity for decreased calories count by using non-dairy ingredients.
Additionally, some non-dairy products have additional nutrition and functional benefits. For example, nut-based milks—such as almond, cashew and macadamia—are higher in unsaturated fats compared to cow’s milk, which are shown to be good for heart health.
With around 50% of Americans actively trying to eat healthy,3 brands offering non-dairy options have the opportunity to appeal to this large population of health-conscious consumers. But brands also need to keep in mind that many consumers are also looking for simple, cleaner labels—and some non-dairy alternatives are perceived as highly processed. In fact, over one in four non-dairy milk consumers prefer simple ingredients;1 formulating with less additives and minimal processing can enhance natural perceptions of non-dairy options.
Driver 3: Ethical & Environmental Considerations
Many of today’s consumers are values-oriented,4 meaning they want to invest in products that align with their values, including ethical and environmental perspectives—and these shoppers may be avoiding traditional dairy for such reasons.
Dairy production impacts the planet; it’s a major contributor to greenhouse gas emissions, and there’s risk for mishandling of manure and fertilizers which can degrade local water resources.5 And, dairy is an animal product, typically from cows in the U.S., and 10% of American adults consider themselves vegetarian or vegan6 and therefore may choose to avoid animal products such as milk, cheese, butter, etc.
Consumers with a strong drive to protect the environment and animals may choose a dairy-free diet and therefore opt for non-dairy products.
Deliver Dairy-Like Results, Without the Dairy
Consumers may be reaching for non-dairy products, but they want the best of both worlds—they want non-dairy but with all the flavor, mouthfeel and functionality of real dairy.
With the help of Butter Buds® non-dairy concentrate ingredients, manufacturers can deliver the rich, creamy flavors of butter, milk and cream without using real dairy—promoting a vegan diet and avoiding the risk of exposure to lactose.
Flavor profiles Butter Buds® can deliver in non-dairy formats include:
- Cheese (cheddar and parmesan)
- Butter (butter and ghee)
- Milk & Cream (yogurt, sour cream, vanilla cream and buttermilk)
Our dairy concentrates offer up incredible taste at extraordinarily low usage rates, making them an easy addition to a range of formulations. Applications that can be enhanced with Butter Buds® concentrated ingredients include:
- Beverages & Drink Mixes
- Confectionery & Snacks
- Sauces & Dressings
- Soups & Seasonings
- Meats & Ready Meals
Request a sample today.
Learn more about our non-dairy offerings here.
Sources:
1 Mintel, Milk And Non-Dairy Milk – US – 2024
2 Cleveland Clinics, Lactose Intolerance
3 Statista, Katharina Buchholz, Are Americans Trying to Eat Healthy?, Feb 24 2023
4 Spins, The Values Based Shopper, 2023
5 WWF, Sustainable Agriculture | Dairy | Overview
6 Alliance for Science, F. Bailey Norwood & Courtney Bir, 1 in 10 Americans say they don't eat meat - a growing share of the population, March 10 2022
