5 plant-based Dairy alternative trends to watch in 2022 and beyond

The booming dairy alternatives market shows no signs of slowing down, with expected CAGR growth of 11.2% from 2020 to 2027, when it’s predicted to reach $44.89 billion.

Plant-based milk is at the forefront of this growth, but other dairy alternative products are steadily increasing in popularity. And it’s not just vegans and vegetarians consuming more dairy alternatives. There’s a community of “flexitarians” who gravitate towards quality brands with nutritional and ethical credentials.

On average, about half of Europeans (49%) claim to consume only traditional dairy products. While 45% of consumers regularly choose both traditional dairy and plant-based options. Finally, a small percentage of 4% consume only dairy-free-plant-based (or dairy-free) alternatives.

As a result, many producers and retailers are investing in vegan dairy alternatives to appeal to the growing number of consumers who deem it as healthy and more sustainable, and who want to introduce more plant-based products into their diet.

Below we identify 5 dairy alternatives trends that brands should watch in 2022 and beyond.

1. Consumers want functional dairy alternatives

Despite 54% of people believing that incorporating more plants into their diet makes them feel healthier, a product being “plant based” alone isn’t enough to win over consumers.

According to Mintel, 38% of those who live in plant-based milk consuming households look for high protein claims. Almost half of adults want to see plant-based milk options with more protein. This is a challenge for brands developing dairy alternatives because plant milk contains less protein than dairy. For example, a popular oat-based milk contains 1g of protein per 100ml, compared to 3g of protein per 100ml for cow’s milk.

However, innovations in plant-protein formulation and processing are helping brands overcome this challenge. Plant-based dairy manufacturers are enhancing products with protein, immunity ingredients and added nutrients. And they are communicating these health benefits on-pack.

In the plant-based dairy space, non-GMO is the most popular label claim, followed by gluten-free and vegan. The fastest-growing label claim is organic ingredients, which is valued at $555 million, an increase of 19% from the previous year.

Of course, consumers don’t choose products based on health benefits alone. To get them to read the label, shelf appeal and quality still reign supreme. Natural looking packaging with artisanal ‘kraft paper’ look and feel really appeal to health-conscious consumers. Amcor’s paper banderole made with FSC certified material, for example, complements natural yoghurt brands and offers a more sustainable packaging option.

2. Innovating with alternative plant bases

One way around the challenge of protein is by experimenting with alternative plant bases like peas, barley, chia seeds, hemp, coconut, cashews, and bananas. Take Two Foods, for example, uses spent barley (the by-product of beer brewing) to make a nutrient-rich barley milk. The brand states that it contains complete protein, fiber, calcium, good fats and “50% less sugar than other flavored plant-based milks.”

Almond (61%), Soy (56%) and Coconut (43%), are the preferred plant-based alternatives to dairy for European consumers.

3. Focus on the flavor

Flavor can be a differentiator for dairy alternatives, especially those that offer consumers more choices. The dairy-free ice cream and frozen desserts segment has an excellent track record for this, with mainstream brands and start-ups quick to launch a variety of flavors - a trend that is set to continue. Ben & Jerry’s have a wide variety of vegan flavors available and UK-based brand Booja Booja offers 8 flavors including Honeycomb Caramel and Hazelnut Chocolate Truffle.

Dairy alternative brands producing milk, cheese and yogurt can take inspiration from the success of these ice cream products. A recent study found that over one-third of consumers are looking for “better tasting products” in the plant-based category. If dairy alternative manufacturers are going to appeal to flexitarian consumers, great taste and interesting flavors are a must.

Snack formats for dairy are an ideal way to promote new experiences, since this format allows adventurous consumers to taste new products without feeling like they must commit to a full-sized package. Portioned packaging gives them flexibility and peace of mind to sample different alternatives varieties guilt-free. Packaging that delivers smaller portions offers an additional, yet vital, benefit. It helps to minimize food waste by ensuring more product is consumed rather than disposed.

4. The one to watch: Plant-based cheese

Cheese is the most technically challenging space in dairy alternatives. Fans of cheesy pizza, grilled cheese sandwiches, and vegan cheeseburgers want dairy-free cheese to melt and stretch - but this response to heat is made possible by dairy proteins.

As plant proteins don’t act in the same way, manufacturers are faced with the challenge to balance ingredients like different starches and fibres to give the same stretchy texture that dairy lovers are used to. And, they need to do so without including too many “modified” ingredients, as seeing this word on dairy alternative packaging puts some consumers off.

Another way dairy alternative manufacturers are capturing the attention of consumers (vegans and non-vegans alike) is with packaging material.

PRODUCT SPOTLIGHT: PACKPYRUS PAPER TRAY

Our Packpyrus range uses a paper-based tray derived from FSC-certified sources, combined with a top film available in recycle-ready materials. Many consumers view paper-based packaging as more sustainable, making it a great option for companies looking to highlight their environmental credentials. The tray is also lightweight, resulting in a 10-30% packaging weight reduction, leading to further environmental benefits such as reduced energy and water consumption. With a long track record for cheese slices, Packpyrus is a proven solution for dairy-alternative slices as well.

Packs that are easy-to open and reseal will also capture the attention of consumers. Solutions like [Reclose packaging feature] (https://www.amcor.com/product-listing/reclose-and-reclose-e2) offers enhanced product safety and accessibility thanks to its hermetic fusion seal. This enables freshness, longer shelf life and less food waste, providing both consumer convenience and environmental benefits.

5. Sustainability remains a key concern

Recent research by IBM found that nearly 60% of consumers are willing to change their shopping habits to reduce environmental impact, while almost 80% indicate that sustainability is important to them. This demonstrates that sustainability is likely to be a key factor that drives consumers' future purchases.

Indeed, Mintel research highlights the importance of ethics and the environment for the dairy industry as a whole. With more than a quarter (27%) of dairy consumers interested in products with a guarantee of sustainable farming, traditional and dairy alternative brands have a huge opportunity to display their sustainability credentials on-pack.

To support consumers in making more ethical choices, brands can use innovative and sustainable packaging solutions that are easier to recycle. For example Amcor's team has developed a mono-PE flowpack solution that not only is recycle-ready but maintain the same long shelf-life, functionality, and high safety standards needed for hard cheese products. Compared to the traditional OPA/PE packaging, Amcor's new mono-PE structure allows a 25% reduction in non-renewable energy, 41% lower carbon footprint and 11% less water consumption (calculated using ASSET™, Amcor’s in-house life cycle assessment tool, certified by the Carbon Trust).