Changing dietary needs and plant-based innovations have greatly altered the dairy industry, resulting in a broad spectrum of consumers with different demands across various demographics. Lee Jie Ying, strategic marketing manager of Beverages at Kerry Asia Pacific, Middle East & Africa, writes on the diversity of the dairy market.

The dairy landscape is fast evolving to keep pace with consumers growing demand for more sustainable, healthier options.

When it comes to beverages, a Euromonitor report reveals that in 2020, Asia Pacific, Middle East and Africa (APMEA) constituted 50% of the global dairy beverages retail volume sales.

But while dairy consumption remains high, it has led to rising interest in non-dairy beverage choices − 60% of dairy alternative value sales come from the APMEA region, with China, Thailand and Australia taking the lead in both dairy and non-dairy drinks. Among F&B product launches, we see a 21% annual growth in products with plant protein claims.

What is driving this shift? The pandemic has compelled consumers to rethink their diet. More than ever, they want nutrition, value, and added ingredients that support wellbeing. Health is non-negotiable.

When it comes to milk, more than half of global consumers consider plant-based milk as highly nutritious. And while plant-based milk is not new to the region – soy has long been a staple – oat milk is gaining ground as the dairy alternative to watch as it scores high as a sustainable plant base that delivers on taste, nutrition and environmental objectives.

Kerrys recent proprietary research reveals that 55% of Thai consumers like oat milk as a ready-to-drink, 41% of Australians enjoy oat milk with their tea and coffee, and 10% of Japanese are now drinking oat milk up to three times a week. Until recently, about a year or two ago, oat milk did not exist in the Japanese market. However, the uptake in non-dairy beverages should come as no surprise, given that 85% of the population in the region are lactose intolerant and seek non-dairy options that can be easily adapted into their diet.

Increasingly too, as people make healthier choices, they are more willing to try new types of foods; as a result, we see the emergence of flexitarian consumers who regularly enjoy both animal- and plant-based food and beverage.

Then, there is the generation of young consumers — millennials and Gen Z — who expect more from their beverages. Drawn to bold, new flavour offerings, they look for drinks that boost energy and wellness to help them keep up with their busy, active lifestyles. And as a generation of environmental advocates — whether dairy or non-dairy — ethical, sustainable production influences what they choose to consume.

What all this points to is a tremendous potential for plant-based beverage options in APMEA.

But while the landscape is dynamic for both dairy and dairy alternatives, one thing is constant. In a study by Innova on the science of beverages, flavour or taste – coming in at 48% − remains the number one factor behind the buyers decision. Price point (47%) and health (40%) were next.

Interestingly, deliciousness is not a one taste fits all. A Kerry study of consumer preferences in China, Australia, India, Thailand and Japan, reveals that buttery with a hint of vanilla is the preferred dairy taste in Japan and Australia. On the other hand, consumers in India and China like a robust, cow-fresh flavour, while in Korea and Thailand, they enjoy thin and less creamy dairy.  

The challenge for plant-based beverage innovation typically centres around the taste, texture, nutrition, appearance and product stability. only when these are addressed can brands deliver a product consumers would love.

about 30% of those surveyed in the region say that most current dairy alternatives do not match up to the taste and texture of regular animal dairy. A balanced flavour profile, mouthfeel, no off-flavours and minimal aftertaste all matter to consumers.

Today, people view healthy living in a much broader context. Sustainable ingredients that support nutrition and customised wellness are fundamental requisites. To win and retain consumers, food and beverage brands need to create products that meet market needs, align their brand purpose with their products and commit to supporting communities and the planet.