Australia Dairy Alternative Market Report and Forecast 2025-2034

According to this report, the Australia dairy alternative market size reached around USD 536.48 million in 2024. Aided by a growing shift toward plant-based diets, increased consumer awareness regarding health and sustainability, and advancements in dairy alternative product offerings, the market is projected to grow at a CAGR of 12.1% between 2025 and 2034 to attain nearly USD 1.70 billion by 2034.

The Australia dairy alternative market is flourishing across a range of product categories, including milk, yoghurt, cheese, butter, and ice cream. With the increasing popularity of veganism, lactose-free diets, and flexitarian lifestyles, consumers are increasingly turning to plant-based substitutes for traditional dairy products. These alternatives are not only viewed as suitable options for those with dietary restrictions but also appeal to health-conscious consumers seeking to reduce their intake of saturated fats, cholesterol, and animal-based ingredients. As a result, Australia is witnessing a growing demand for products derived from ingredients such as almonds, oats, soy, coconut, and rice.

One of the primary drivers of the Australia dairy alternative market growth is the rising concern over health and wellness. As Australians become more health-conscious, there has been a significant shift toward reducing or eliminating animal products from their diets. This trend is reflected in the surge of demand for plant-based milk alternatives, such as oat milk, almond milk, and soy milk.

These options offer a variety of health benefits, including lower calorie content, reduced fat levels, and higher fibre content when compared to traditional dairy milk. Additionally, many of these products are fortified with essential vitamins and minerals, such as calcium and vitamin D, which further enhance their appeal as a nutritious alternative.

The growing prevalence of lactose intolerance in Australia is also contributing to the Australia dairy alternative market expansion. Lactose intolerance affects a significant portion of the population, and as awareness of this condition increases, more people are seeking dairy-free options. Plant-based milk substitutes offer an effective solution for individuals who are unable to consume dairy due to digestive discomfort. Dairy alternatives provide a wide range of options that cater to various dietary needs, including vegan, gluten-free, and nut-free products, allowing consumers to find products that meet their specific health requirements.

The environmental impact of dairy farming has become another key factor influencing the Australia dairy alternative market dynamics. With concerns about climate change and the ecological footprint of traditional animal farming, many Australians are turning to plant-based alternatives as a more sustainable choice. Dairy farming is associated with high greenhouse gas emissions, water consumption, and land use, which has led to growing scrutiny of its environmental impact. In contrast, plant-based dairy alternatives generally have a significantly lower carbon footprint, with ingredients such as oats and almonds requiring far fewer resources to produce. This sustainability factor is further fuelling the demand for dairy alternatives, particularly among environmentally conscious consumers.

In addition to health and sustainability concerns, the food and beverage industry’s innovation in dairy alternatives is playing a pivotal role in the Australia dairy alternative market development. Product development has led to a wider variety of dairy alternatives that cater to diverse consumer preferences. The texture, flavour, and nutritional profiles of plant-based cheeses, yoghurts, and milk have improved significantly, with many brands offering products that closely resemble their traditional dairy counterparts. These innovations have not only enhanced the appeal of dairy alternatives but have also contributed to their mainstream acceptance. Dairy-free ice creams, for example, have seen a surge in popularity, with brands offering flavours and textures that rival conventional dairy-based ice creams, making them more accessible to a broader consumer base.

The popularity of plant-based diets, coupled with increased product availability and improved formulations, has boosted the Australia dairy alternative market revenue. Supermarkets and health food stores are now stocking a broader range of dairy-free options, making it easier for consumers to access plant-based products. Major food retailers are expanding their plant-based sections to accommodate the growing demand, offering everything from plant-based milk and cheese to butter and ready-made meals. This expansion is helping to normalise dairy alternatives and make them a staple in the average Australian household.

In addition to conventional retail channels, online shopping has played a significant role in shaping the Australia dairy alternative market dynamics. E-commerce platforms provide an easy way for consumers to access a wide variety of plant-based products, especially those that may not be available locally. Subscription services and direct-to-consumer delivery models have also gained popularity, allowing consumers to conveniently purchase their favourite dairy alternatives from the comfort of their homes. This accessibility is key to driving the growth of the market, particularly among younger generations who are more likely to engage with online shopping and new food trends.

Moreover, the rise of foodservice applications for dairy alternatives is another key Australia dairy alternative market trend. As more consumers opt for plant-based diets, restaurants, cafes, and other foodservice providers are adapting to meet this demand. Coffee shops, in particular, are increasingly offering plant-based milk options, catering to those who prefer dairy-free beverages. Vegan and vegetarian-friendly restaurants are also expanding their menus to feature plant-based cheeses, butter, and other dairy alternatives. This trend is reflective of a broader shift in the foodservice industry toward catering to the dietary preferences of a more diverse and health-conscious consumer base.

In conclusion, the Australia dairy alternative market is poised for continued growth, driven by changing consumer preferences toward health, sustainability, and ethical concerns. With the increasing popularity of plant-based diets, the expansion of product offerings, and growing consumer awareness, the demand for dairy alternatives is expected to continue its upward trajectory in the coming years. As the market continues to evolve, innovation, sustainability, and accessibility will remain key factors in shaping the future of market.

Market Segmentation

The market can be divided based on source, formulation, nutrient, distribution channel, and region.

Market Breakup by Source

• Almond
• Soy
• Oats
• Coconut
• Rice
• Hemp
• Others

Market Breakup by Formulation

• Plain
• Flavoured

Market Breakup by Nutrient

• Protein
• Starch
• Vitamin
• Others

Market Breakup by Distribution Channel

• Supermarkets and Hypermarkets
• Convenience Stores
• Online Channels
• Others

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Competitive Landscape

The report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the Australia dairy alternative market. Some of the major players explored in the report are as follows:

• Nestle Australia Limited
• Nutricia Australia Pty Limited
• Blue Diamond Growers
• PureHarvest
• Califia Farms, LLC
• Others