Plant-Based Beverages: Key Trends In Asia

Friday, May 15th, 2020

A significant lactose-intolerant population in Southeast Asia offers huge potential for dairy producers to launch new and diverse lactose-free product ranges in the market. By Arvind Kaila, Consumer Markets Analyst at GlobalData

Lactose intolerance, the growing trend towards veganism, product personalisation, health & wellness, ethical and environmental concerns, and fears about adulterated and hormone/antibiotics-laced dairy milk, are driving the growth of the plant-based beverage market in the APAC region. GlobalData reports that the market for plant-based beverages (including Grain, Nut, Rice, Soya and Seed milk) for Asia stands at 14.9 billion litres in 2019, expanding at CAGR of 6.9 percent from 2014 to 2019.

Christopher Victor, Director Beverages at GlobalData, says: “Plant-based drinks have been gaining traction over the past few years, and 2020 is going to be another significant year for the category. With a large number of Asian people suffering from lactose intolerance, there is likely to be surge in demand for lactose-free dairy products in the region. We could see more innovative plant-based products entering into the APAC market in the next few months.”  


Lactose-Free Products To Drive The Trend

Milk, the largest category in the Asia-Pacific dairy market, is expected to witness a decline in consumption share across all countries from 2018 to 2023. The fall in consumption share of milk is attributed to the increasing penetration of lactose-free plant-based dairy alternatives in the region. Moreover, consumers in countries such as China increasingly prefer drinkable yoghurts for their perceived health benefits and ease of consumption on-the-go.

Demand For Personalised Products Driving The Growth Of Plant-Based Beverages

According to GlobalData’s Q3 2018 consumer survey, 85 percent of consumers from Asia & Australasia stated that their food product choice always, often or somewhat depends on how enjoyable or unique the product is. Urban consumers are even more likely to choose novel products that are different from regular products. As a result, manufacturers are releasing uniquely flavoured variants and visually appealing packages which are customised to meet distinctive consumer needs.

Concerns About The Health Impact Of Artificial Ingredients 

Growing concerns over the harmful effects of artificial ingredients among Australians has led them to seek fresh products which are free from artificial ingredients and preservatives. Australian consumers increasingly perceive them to be of better quality and always tend to choose brands with natural ingredients. This is substantiated by a GlobalData consumer survey wherein 43 percent respondents said that natural ingredients in a product would make them choose one brand over another. The rising perception that milk alternatives are all-natural and contain no artificial ingredients or preservatives has boosted the popularity of plant-based beverages in Australia in recent years.



New Investments In China And Southeast Asia Set To Boost Category Growth

A significant lactose-intolerant population in Southeast Asia offers huge potential for dairy producers to launch new and diverse lactose-free product ranges in the market. The region has been attracting foreign alternative milk brands to the tap on opportunities in this space. Swedish oat milk brand Oatly has entered the Chinese market in 2019 in order to take advantage of consumers’ lactose intolerance and strengthen its position in the market. The company has introduced a new Chinese character for ‘vegan milk’ to attract milk drinkers to its product. The company has also launched a cocoa-flavoured oat milk drink under the name Oat Drink Chocolate Junior in Hong Kong. According to The Good Food Institute—a non-profit organisation that promotes plant-based alternatives—most major food brands in China now have a plant-based beverage strategy as well. However, the recent Coronavirus outbreak in China could spoil the investment climate in the economy, which may adversely impact the planned expansions and innovations in the plant-based beverages market.


A Plant-Based Future?

Plant-based beverages are expected to gain a bigger market share in the years to come. However, a major challenge that manufacturers face in boosting consumers’ acceptance is replicating the authentic taste of dairy milk. The dairy industry’s resistance to the rise of dairy alternatives has hitherto been largely focused on limiting the use of the terms milk, cheese, butter, ice cream, and yoghurt to only those products produced with natural dairy milk. For instance, recently in Australia, dairy farmers petitioned the government that as these alternatives are not sourced from animals, so they should be called juice instead of milk. Despite these challenges, the plant-based beverage market will continue to register strong growth underpinned by the growing number of consumers looking to explore new options and including plant-based offerings in their diet.


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