5 Things to Know About Dairy and Non-Dairy Alternatives


With Asia Pacific, the Middle East and Africa (APMEA) accounting for half of global dairy beverage sales in 2020, consumers in the region are seeking sustainable dairy options and embracing dairy alternatives

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KerryDigest Fast Facts:

  • Asia is projected to lead in dairy beverage sales this year, with China and India set to be the biggest markets.
  • This growing interest in dairy beverages has led to increased appeal for non-dairy beverages, too.
  • Health and flavour continue to be deciding factors for consumers of plant-based dairy alternatives.
  • Oat milk is gaining popularity for its taste, nutrition and sustainable qualities.
  • When it comes to flavour, culture and background influence taste preferences. What consumers prefer in one country may not win over fans in another.

KerryDigest Full Scoop:

The dairy landscape in APMEA is changing as consumer preferences continue to evolve. While plant-based milk is not new to consumers in the region, growing awareness and demand for more sustainable and healthier options are driving innovation in both the dairy and non-dairy beverage spaces.

Recently, Kerry showcased its innovative dairy alternatives in a virtual tasting event, “Dairy without Compromise”. While tasting custom beverages, attendees were presented with new findings about the current dairy landscape and innovation opportunities through market insights. Here are the key takeaways from the session, including localised recommendations. (For more about the specific sustainable dairy and dairy alternative beverages that were served, see the box at the bottom of the page.)

Asia has the biggest market potential for dairy alternatives

According to a Euromonitor report, APMEA accounted for 50% of the global dairy beverages retail volume sales in 2020. Within APMEA, Asia is projected to lead global dairy market sales as well as new dairy beverage product launches. And within Asia, China and India are currently the biggest markets for dairy beverages with the rest of Southeast Asia fast catching up.

While dairy consumption continues to be high, there is also a growing interest in dairy alternatives in the region, brought upon by the rise of the flexitarian (consumers who eat both plant- and animal-based products) and lactose intolerance, which affects 85% of the APMEA population. These factors drive consumers to seek out lactose-free dairy beverages that can be easily adopted into their diets.

Globally, more than half of consumers associate plant-based milk as being nutritious and product launches with plant protein claims are up by 21%. As plant-based drinks continue to gain traction in APMEA, Kerry estimates the APMEA market will hit 9.22% Compound Annual Growth Rate (CAGR).

Health is the top priority and motivation for dairy consumption

Health remains the most important consideration in the APMEA consumer’s decision-making process. Thai and Indian consumers surveyed in an Innova report cited health as their main reason for consuming dairy.

Launches of new dairy beverages across the region show just how much influence consumer demand for healthy products has—the top five health claims include sources of protein, gut health, bone health, vitamins and minerals as well as lactose-free.

Consumers in APMEA also express strong interest in healthy lifestyle benefits. Kerry’s 2021 global consumer research cites immune and digestive health, as well as support for healthy bones and joints, among the top three reasons for purchasing healthy lifestyle products in this region. According to the research, nearly three-quarters of consumers in APMEA said they had either used, or considered using, healthy lifestyle products that support these need states in the last 6 months. As well, consumers in this region ranked both dairy and alternative dairy products high on the list of choices for foods and beverages with digestive, immune, and joint health benefits—specifically, spoonable yogurt and dairy and dairy alternative drinks.


With today’s growing demand for dairy-free options, brands can benefit from this insight by crafting plant-based beverages that offer the same nutritional benefits consumers look for in dairy, broadening the scope for more non-dairy alternatives. While plant-based dairy alternatives are generally perceived to be heathy, there is opportunity to further enhance nutritional value in these product applications by adding science-backed functional ingredients that support digestive and immune health, including probiotics and yeast beta glucans.

Flavour drives consumer purchase decisions

If health benefits drive purchase motivation, flavour is what seals the deal. Consumers polled in an Innova study on the science of beverages in APMEA showed that flavour (48%) is the top factor that influences purchase with cost (47%) and health (40%) following closely behind. The same study also concluded that tried and tested flavours like chocolate, banana, vanilla and strawberry continue to be popular flavours, as seen in new flavoured milk launches in 2020.

However, brands should note that culture and background will influence taste preferences. What consumers prefer in one country may not win over fans in another.

For example, to better understand the sensory definition of ‘fresh dairy taste’ in different markets—and to develop custom consumer preferred flavours—Kerry conducted an in-depth study of consumer tastes and preferences and profiled iconic fresh milk in China, Australia, India, Thailand and Japan.

The results showed a wide range of ‘preferred’ fresh dairy taste attributes: consumers in Australia and Japan prefer their milk  creamy, buttery and taste like vanilla; Chinese and Indian consumers are partial to milk that has an earthy, straight-from-the-cow taste; and those in Thailand and Korea like their milk fresh, less creamy and slightly watery.


Kerry’s study shows the importance of customisation to replicate local taste profiles as well as easy local execution. Not only that, the research also proved how first taste impressions can influence purchasing decisions while other attributes such as a balanced and full-bodied flavour, compatible mouthfeel, no off-flavours and a minimised aftertaste all play a part in the consumer’s decision making.

Oat milk is catching up with soy milk

As plant-based beverage solutions continue to evolve, consumers are now looking beyond soy milk (a staple in Asia for decades) and setting their eyes on oat milk. The statistics speak for themselves—55% of Thai consumers prefer oat milk as their ready-to-drink, 41% of Australians prefer to have oat milk with their tea and coffee and 40% of consumers in China consume oat milk two to three times a week.

Plant-based drinks are gaining momentum in China, which is currently one of the biggest markets for dairy beverages. Local e-commerce site Tmall reported an 800% increase in plant-based beverages sales and a more than 900% increase in consumers buying plant-based drinks—this raked in around US$130 million in online sales for plant-based beverages in 2020.

As more and more Chinese consumers associate plant-based beverages with health and better quality, they are seeking out new taste experiences in plant-based drinks and it’s not uncommon to see cafes incorporate fruit-, vegetable- or floral-flavoured oat milk into their menus.

It’s the same in Australia, where plant-based beverages have gone beyond soy, almond and coconut milk as consumers start to embrace oat milk. Euromonitor projects plant-based drinks in Australia to hit $333 million in 2021 and $423 million in 2025 with a 4.9% CAGR.

Across the board, oat is fast becoming the preferred choice for dairy alternatives as it is a sustainable plant base that delivers taste, nutrition and environmental goals. According to data from Poore & Nemecek, switching from dairy milk to oat milk in a regular sized latte can reduce carbon emissions by half.

Plant-based instant mix products are on the rise

Plant-based beverages are not only offering consumers healthier and more sustainable options but are also influencing other product categories, specifically the 3-in-1 instant coffee space. Kerry predicts a category shift with the boom of a new generation of instant mix powders—one that offers plant-based solutions.

The plant-based technology lies in the creamer component of the instant mix, with the plant-based instant mix market projected to increase by 40% from 2021 to 2025. Consumers are seeking out alternatives that offer authenticity, taste and nutrition. They are looking for products that are ‘natural’ or ‘made with real ingredients’, which were the top two claims in consumer purchasing, as well as options that offer fibre. Once again, taste is a deciding factor, with 75% of Asian consumers citing good taste as essential.

“Dairy without Compromise” Beverage Creations

A key highlight of Kerry’s virtual engagements is the live drink-making demonstrations: seven tasting samples were showcased in our "Dairy without Compromise" event, incorporating Kerry’s functional non-dairy and sustainable dairy solutions with authentic taste. Each attendee, who also received a personal taste box to create the different drinks, got a taste of Kerry Barista Oat Milk and Eco Crème Instant Coffee, a market-leading sustainable creamer.

“The way our technologies are applied − through a focus on superior taste, better nutritional value and sustainability − is the way forward in winning in the beverage category,” said Daniel Sjogren, VP & GM, Beverage, Kerry APMEA.

Some of the featured beverages and solutions include:

Eco Crème Instant Coffee

Eco Crème is a market leading sustainable creamer that delivers a rich ‘real dairy’ taste and the same caffeine level and content as its dairy counterpart. This concentrated creamer is optimised for nutrition and production. Using Kerry’s proprietary taste modulation technology, it also offers 12% less sugar without compromising on taste.

Chocolate Oolong Milk Tea

This concoction uses Kerry’s premium TCreme especially designed for milk and bubble tea applications. It has reduced sugar and improved dairy taste to complement the flavour of the tea.

Kerry Barista Oat Milk and Kerry Barista Oat Milk SEMI

The Kerry Barista Oat Milk is Kerry’s first barista oat milk made with Kerry’s functional oats, crafted to deliver quality taste with the goodness of wholegrain oat, while being allergen friendly and easy to use. The Kerry Barista Oat Milk SEMI is a non-dairy taste solution designed to offer less fat content without sacrificing the taste experience.

Vegan Oat Latte

This beverage creation utilises Kerry’s functional oat creamer, a 100% plant-based dairy alternative crafted to be smooth, creamy, with a layer of dairy-free foam. It delivers instant solubility, good dispersibility and desired mouthfeel.

Protein Choco Oat

A 100% plant-based, low-sugar beverage made with Kerry’s ProDiem® Complete PR that enhances protein content and optimises nutrition, taste and texture. It’s a luxurious chocolate drink with functional benefits.

To learn more about dairy and alternative dairy insights, ingredients and product opportunities, contact us.

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