Dairy Alternative Trends Within Asia

Friday, July 19th, 2019

Plant-based milk alternatives have been traditionally consumed in Asia in the form of tofu and drinkable soy products. However, in the recent years, consumption of Ready-To-Drink (RTD) soy drinks has increased significantly because of rising disposable income and urbanisation.

Furthermore, with milk alternative manufacturers widening their distribution network and retailers providing dedicated shelf space, these products are now more accessible to a wider population. Globaldata reports Grain, Nut, Rice, and Seed Milk Alternative market for Asia to be valued at 5.5 billion litres in 2018 and Soymilk market at 8.7 billion litres.

Dairy alternatives such as plant-based products, have considerable potential to capitalise on consumer’s preference for traditional dairy products with few of these drivers highlighted below:


Lactose Intolerance Driving The Growth Of Milk Alternatives

There is high prevalence of lactose malabsorption in Southeast Asian countries (reported around 90 percent) compared to other parts of the world. This has led to a large segment of consumers opting for diary alternatives which are free from lactose. According to a GlobalData survey on Indonesia, 54 percent of respondents aged between 18 to 24 years, and 44 percent of respondents aged between 25 to 34 years, purchase food/drinks which are ‘lactose-free’ as they believe it is healthy, therefore driving the demand for milk alternatives such as soy milk, nut-based and grain-based milk.


Rising Proportion Of Ageing Population

The proportion of consumers aged 60 and above in Asia is on a rise, with countries such as Japan and South Korea reporting a high proportion of this age group. This consumer group can be lactose intolerant, and are turning to milk alternatives as an alternate dietary source of calcium in order to reduce the risk of diseases such as osteoporosis.

Furthermore, the burgeoning middle class who are seeking healthy food and drink options, and younger generations’ growing preference for Westernised products are also driving the consumption of milk alternatives.


Dairy Alternatives Have A Potential To Erode The Dairy Category


‘Veganism’ Trend Driving The Growth Of Milk Alternatives

There is a rising vegan population in Asia, especially in Australia which is among the fastest-growing vegan countries globally, along with China. Young consumers are increasingly opting for plant-based alternatives to meet their daily dietary requirements of proteins and calcium, along with other nutrients. According to a GlobalData survey on Australia, 16 percent of respondents aged between 18 to 24 years, and 19 percent of respondents aged between 25 to 34 years, affirmed to follow a vegan/vegetarian diet. Reliance on sustainable, vegan alternatives is thus contributing to the growth of dairy substitutes.

FOSHU Certification Boosting Milk Alternatives Sales In Japan

Foods for specified health use (FOSHU) are functional foods containing ingredients approved by the Ministry of Health, Labour and Welfare, Japan which helps promote health or control conditions such as blood sugar, dental hygiene and so on. Soy protein and isoflavones, the two key compounds of Soy milk are FOSHU certified for its effectiveness against blood cholesterol and osteogenesis, respectively. Such products therefore resonate well with Japanese consumers who are concerned about their overall wellbeing and is driving the consumption of these products in Japan. Japanese are increasingly substituting these with dairy products, not only as a beverage but also a cooking ingredient.

All these drivers have resulted in manufacturers launching innovative milk alternative products to cater to the changing consumer requirements.

Though there is growing demand for milk alternatives in Asia, one of the major inhibitors of growth is the high price associated with these products. With a significant portion of milk alternative products being imported, they attract additional import taxes which in turn increase the price. As witnessed, regular milk (low fat/skimmed) would cost a consumer half the price compared to soy milk. This price gap limits a large consumer segment from switching to milk alternatives as they cannot afford these products on a regular basis.

By Deepika Bansal, Director—Consumer Insights at GlobalData.

Further reading:
Oats: The Next Big Plant-Based Dairy Alternative
Flora-Based Milk Protein: No Cows About It!