According to latest findings from BCC Research, the Asia Pacific market for Dairy Alternatives was estimated at US$7.5 billion in 2021 with a steady CAGR growth of 5.5% predicted until 2025.
BCC Research has highlighted a decline in global dairy milk consumption in recent years while milk alternatives have soared in popularity. Nielsen data has also confirmed that in the past 4 years, sales of non-dairy milks like soy and almond milks have grown rapidly.
Major factors influencing growth include the rising cases of lactose allergies, changing consumer lifestyles and growing health awareness among consumers.
With these favorable trends, many food and beverage manufacturers are entering the milk alternative categories to capitalize on the steady growth, however they can only be successful if they have the right partners like DSM to help close the nutritional, texture and sensory gap often found when comparing milk alternatives to dairy milk.
AFBR has the opportunity to interview DSM Food and Beverage representatives, Alan Abolencia, Regional Manager – Asia Pacific, Dairy ; and Ben Rutten, Global Business Manager, Milk & Plant-based Dairy Alternatives to gain more insights on this rapidly growing milk alternative category and what services and solutions DSM can offer for customers in this category. The following are excerpts of the interview with them.
What do you think is the current demand trend for milk alternatives in Asia ?
“Urbanisation, increased consumer spending power, a buoyant food and beverage sector and an increase in consumers’ changing diets from a desire to be healthier and more sustainable are the key factors driving the demand for dairy alternatives across the Asia Pacific region,” said Mr Alan Abolencia.
He added that countries such as India, China and Japan are expected to drive the consumption of dairy alternatives owing to their larger populations, while emerging markets such as Thailand and Vietnam are markets to keep a lookout for.
Asian consumers have a preference for what type of milk alternatives ?
Alan mentioned soy, almond and oats are among the most common milk alternatives. Soy especially has been part of the East Asian diet for centuries, nevertheless the rise of nut ‘milks’ such as cashews and almonds and oat-based beverages has started to chip away at the popularity of soy-based alternatives.
Cereals and oat-based milks however are relatively a new category, and manufacturers need to mask the ‘oatiness’ flavor. For example, the addition of ‘chocolate’ flavor, which appears to be among the top flavors for milk alternatives, helps to mask and balance the sweetness of oat milk, making it palatable to consumers. With DSM’s available solutions, customers can offer products that are 100% natural with no added artificial sugar, as DSM will utilize its existing enzymes to breakdown the sweetness found in oat starch into glucose or maltose. Customers can also adjust their products according to regional preferences, for example in Northern Europe, consumers prefer less sweet and ‘oaty’ milk alternatives. Customers can also rely on DSM’s wide range of health and wellness solutions that can fortify milk alternatives with vitamins like B2 and B12, and other nutrition depending on customer and regional requirements. DSM also helps producers of milk alternatives conform to the nutritional requirements of dairy milk.
What services/solutions can DSM offer to its customers in the milk alternative segment ?
According to Ben Rutten, “DSM’s integrated Food & Beverage business group is an end-to-end solutions provider and reliable partner. We provide stand-out products and extensive expertise alongside a full portfolio of solutions tailored to the evolving needs of the global food and beverage industry.” When it comes to the milk alternatives category, DSM has the following solutions that deliver on taste, texture and health while also enabling process efficiencies and improved sustainability:
• DSM’s Delvo®Plant family of enzymes delivers a better taste, texture and smoother mouthfeel to plant-based drinks. Delvo®Plant enzymes also unlock natural sweetness – fine-tuning the sugar profile of your products to meet different regional consumer preferences.
- Delvo®Plant ALT makes starch-based raw materials like rice and oats, soluble and easy-to-process during the liquefaction stage, helping to enhance the mouthfeel of starch-based beverages. Delvo®Plant GLU and MAL can be used to unlock the natural sweetness of starch during the second production step, the saccharification, allowing healthier products to be created without adding sugar. This enables manufacturers to tailor specific sweetness profiles to suit local market preferences around the globe.
- The recent launch of Delvo®Plant Go allows producers to simplify the production of oat-based dairy alternatives while also improving efficiencies. Delvo®Plant Go enables manufacturers to perform the liquefaction and saccharification process in one step, instead of the usual 2 step process – reducing hydrolysis time by up to 30%. As well as time savings, this solution requires less heating energy and water – helping manufacturers meet their sustainability targets. This new solution also supports organic and non-GMO formulations helping producers appeal to a broad range of consumers.
• These Delvo®Plant enzymes are complimented by DSM’s range of pectins and gellan gums such as our GELLANEER® and ModuMax® taste modulation solutions which can be used by manufacturers to create the right creamy texture that consumers love in their plant-based drinks.
Can milk alternatives exist and compete alongside the conventional dairy milk category ?
Competition is healthy as both milk and milk alternatives reach out to their own set of consumers. At most times, consumers who have no lactose allergies are also willing to consume both milk and milk alternatives as part of their regular diet.
Ben added, “At DSM, we believe that sales of milk alternatives can happen hand in hand with conventional dairy products. Both dairy and dairy alternatives are great vehicles to bring healthy products to the demanding consumers of today. However, as APAC (Asia Pacific region) is complex with differing consumer preferences, it is key to cater to local preferences and consumer behaviour. With our global reach and localized insights, we can enable companies to launch their novel products into the APAC market.”
In recent years, there is also a growing number of dairy players moving into the milk alternative space as they seek to diversify their market.
What do you foresee to be the future prospect for milk alternatives ?
While traditional dairy products remain popular around the globe, the rise of flexitarian diets means dairy alternatives will continue to grow in popularity, particularly after the onset of COVID-19 pandemic. This can be seen in India where a third of consumers have moved away from choosing traditional animal products including dairy. Similarly in China, 57% of urban consumers agree that climate change and the environment has become more important to them since COVID-19. This is reflected by 47% of plant-based dairy launches in Asia Pacific countries featuring a sustainability claim from May 2020 to May 2021, according to the latest Mintel data1.
Meanwhile, BCC Research highlighted that the Asia Pacific region will continue to dominate the milk alternatives market partly due to its strong agricultural base for plant-based sources. Lactose- intolerance is also one of the attributing causes that leads to rising demand for milk alternatives in this region.
As milk alternatives come closer to dairy milk in terms of taste and texture, price of milk alternatives however is still at a slight premium owing to raw material supply fluctuations amidst the Ukraine war and other political and climate uncertainties which affect harvest. Nevertheless, consumers will continue to buy milk alternatives even at a premium as it answers to their growing concerns over environmental sustainability.
In addition, Ben also highlighted the growth of coffee chains with their growing use of almonds, oats and soy milk to substitute milk in coffee, as they address a growing demand for low-fat and lactose-free alternatives by their consumers, now comprising of a growing number of younger consumers – the Millennials and the upcoming Gen Z consumers.