Plant-based dairy alternatives remained a relatively niche market in India due to the need for more consumer awareness and the high price per litre of such products. Despite this, India remains a promising market for dairy substitutes, given the burgeoning and economically empowered middle class and increasingly eco-conscious Millennial and Gen Z consumers.
Spurred by the growing health and wellness and ethical consumerism trends and the rising awareness about lactose intolerance and dairy-related allergies, the Indian market for grain, nut, rice, and seed milk alternatives’ value sales will expand at a compound annual growth rate (CAGR) of 9.5 percent over 2022 to 2027, according to GlobalData.
Priyanka Jain, Consumer Analyst at GlobalData, said that while dairy milk and derivatives are staples in Indian cuisine and diets, plant-based dairy substitutes are gradually penetrating the market, spurred by international health and wellness and ethical consumerism trends.
Lactose intolerance and dairy allergies are the prime reasons consumers worldwide switch to plant-based dairy alternatives. And over the years, several research studies have revealed that 60 percent to 90 percent of Indians suffer from lactose intolerance or dairy allergies, with the concentration being higher for some ethnic groups and communities and lower for others.
With increasing awareness about the lactose-intolerance, the demand for plant-based dairy alternatives is on the rise, albeit from a low base.
Francis Gabriel Godad, Consumer Business Development Manager at GlobalData India, said the COVID-19 pandemic has accentuated fears of transmitting viruses, bacteria, and other germs through animal-derived products. This has boosted the appeal of vegetarian, vegan, and flexitarian diets. Also, many Indian parents are worried about serving dairy milk to their wards amid media reports about milk adulteration and the overuse of antibiotics and growth hormones in cattle farms.
Due to their low carbon footprint and cruelty-free attributes, eco-conscious consumers prefer non-dairy milk products, such as almond milk, cashew milk, and coconut milk. Accordingly, 36 percent of Indian respondents in GlobalData’s 2023 survey deemed ‘plant-based’ an essential factor in purchasing decisions.
Jain added that the higher price markup on dairy alternatives is warding off low-and-middle-income consumers, especially amid high inflationary pressures. Consumers are also concerned about dairy alternatives being highly processed foods. To overcome consumer resistance, manufacturers must closely match dairy alternatives' taste, flavour, and textural qualities with traditional dairy products and offer a range of exciting options that attract flexitarians, not just committed vegans and vegetarians.
“Manufacturers can also launch public awareness campaigns and encourage consumers to get tested for lactose intolerance and milk allergies. Given the high prevalence of these conditions among Indians, this can be a game changer for the plant-based dairy alternatives market,” said Jain.