Key Drivers and Trends in the Dairy and Egg Alternatives Market

Key Drivers and Trends in the Dairy and Egg Alternatives Market

Plant-based dairy and egg products include alternatives to dairy or eggs that attempt to replicate the flavor, function, and/or texture of these products with plant proteins. These products often use terms such as:

  • plant-based dairy/egg
  • vegetarian/vegan dairy/egg
  • dairy-free dairy/eggless egg
  • dairy/egg alternative
  • words that make slight changes to the name of the product they are imitating (e.g., chedd’r, mylk)
  • the plant-based ingredient along with the conventional product name (e.g., almond milk, cashew cream cheese)

According to Packaged Facts’ new report Dairy & Egg Alternatives: Plant-Based & Animal-Free Products, 2nd Edition, some consumers are abstaining from animal products by going vegan or vegetarian, but many more are simply reducing consumption of animal products with a flexitarian or semi-vegetarian diet, which may involve consumption of plant-based dairy and egg alternatives.

Food Allergies and Sensitivities Are a Key Driver for Adoption

Food allergies and food intolerances/sensitivities are being reported at higher rates than in the past. Milk and eggs, two of the “Big 8” major food allergens, are avoided by millions of consumers who are allergic to these ingredients.

Additionally, lactose intolerance affects even more consumers. Consumers with lactose intolerance experience unpleasant digestive symptoms when consuming dairy products with high lactose content. Thus, many people avoid dairy – particularly milk, yogurt, and ice cream. A serving of these dairy products typically has a much higher level of lactose than a serving of other dairy products such as cheese and butter.

Plant-based alternatives to dairy and egg products are a good option for consumers with dairy or egg allergies, as these plant-based products do not contain the allergens in question but do imitate their taste, texture, or function. Those who are allergic to milk but desire to have milk in their cereal, for instance, may use a plant-based milk product for this purpose. Similarly, someone allergic to eggs may use a plant-based egg powder for baking or a folded plant-based egg product on a breakfast sandwich to have egg functions or flavor/texture without risking an allergic reaction.

Consumers with lactose intolerance may also consume plant-based dairy if they want to enjoy dairy without feeling sick afterwards.

Though vegans and other plant-forward consumers are a prime target for plant-based dairy and eggs, food allergies and sensitivities are a more common reason for consuming these products. According to Packaged Facts’ August 2022 National Online Consumer Survey, 18% of those who consume plant-based dairy products report that lactose intolerance is a major factor affecting their decision to use these products.

Plant-Based Sales Trends During the COVID-19 Pandemic

In 2020, double-digit growth in the plant-based dairy and egg market accelerated because of rapid expansion in consumer adoption and an overall favorable environment for grocery purchases (and online purchases) as consumers spent more time at home during the pandemic.

In 2021 and 2022, topline growth for plant-based dairy products has decelerated to single digits, as some product categories are maturing (particularly plant-based milk).

However, it is worth noting that many people who tried plant-based milk and other plant-based dairy products may have had lactose intolerance and found that they felt better eating these products instead of conventional dairy. Thus, repeat purchases are relatively high for many plant-based dairy products.

The smallest product category, plant-based eggs, is experiencing much faster double-digit growth as more products are launched. For example, just this month, PURIS released a new plant-based egg product made with pea protein under the AcreMade brand, citing “a new era of plant-based eggs with delicious, easy-to-use, nutritious products free from the top nine allergens, unlocking a world of potential within plant-based eating.”

Growth in the plant-based dairy and egg market will continue through 2027, though at a slower pace, due to:

  • new product introductions and increasing availability, particularly in smaller non-milk categories
  • rising consumer adoption
  • product improvements that give products better taste and texture
  • upward momentum of consumption of these products among those who already eat plant-based dairy or eggs
  • falling prices in some categories as competition increases and availability of lower-priced private label brands expands

In Packaged Facts’ August 2022 National Online Consumer 15% of consumers indicated that they were eating more plant-based dairy alternatives than they did before the pandemic.

Animal-Free Dairy and Eggs: The Next Disruptor in the Dairy and Egg Market

Released for the first time in the past few years, animal-free products that contain the same proteins that exist in conventional milk or eggs may be desired by consumers concerned about the environment or animal welfare. Animal-free dairy and egg products may go by many names in corporate and consumer culture, including “cultivated,” “lab-created,” “lab-grown,” “cell-based,” “cruelty-free,” “clean,” “in vitro,” “cultured,” and “synthetic” dairy and eggs.

These products represent the cutting edge of dairy and egg alternatives. Many startups around the world have received funding and are developing products, some of which have already gone to market.

In 2019, animal-free dairy was first sold in the U.S. as a limited time offer from Perfect Day in the form of an ice cream made from non-animal whey protein. This animal-free ice cream, now sold under the Brave Robot brand, remains the only animal-free dairy product on the U.S. market today.

Similarly, The EVERY Company launched its first animal-free egg white protein in October 2021. Since then, the company has collaborated with other companies to release products featuring animal-free egg protein, such as protein-enhanced alcoholic beverages announced earlier this month.

Compared to plant-based dairy and eggs, animal-free dairy and eggs may face more regulatory hurdles due to how these proteins are produced. In particular, many of these proteins are produced using genetically modified bacteria or other organisms.

Nonetheless, some consumers who have rejected plant-based dairy or eggs may give animal-free dairy and eggs a more positive reception. Plant-based alternatives can contain ingredients (such as preservatives and additives) that are perceived as unhealthy or unnatural, while animal-free dairy and eggs contain only proteins (and any additional ingredients needed to finish a product, such as sugar being added to animal-free ice cream).

Additionally, some consumers who like to eat conventional dairy or eggs could find themselves more swayed to try animal-free products than plant-based alternatives that do not have quite the same flavors or textures as their conventional counterparts. Animal-free dairy and eggs will be a more direct substitute for conventional products since they are made with some of the same proteins.

Although skeptical consumers may not be ready for animal-free dairy and eggs, open-minded consumers may accept these products more readily. Consumers who are concerned about animal welfare and the environment but still eat conventional dairy and eggs are the most likely to be among this group, as removing animal agriculture from the equation will undoubtedly make animal-free dairy and egg products more environmentally and animal-friendly.

Packaged Facts forecasts a large prospective market for animal-free dairy and egg products, with fast sales growth expected over the next two decades as more products are commercialized.

Additional analysis of the plant-based and animal-free dairy and egg markets can be found in the October 2022 Packaged Facts report Dairy & Egg Alternatives: Plant-Based & Animal-Free Products, 2nd Edition.

About the blogger:

Cara Rasch is a food and beverage analyst for Packaged Facts. She studies consumer and industry trends in this space and has a B.A. in economics from Allegheny College.