The market for dairy and dairy alternative beverages will reach a projected $28 billion by 2021, according to market research firm Packaged Facts in the new report, "Dairy and Dairy Alternative Beverage Trends in the U.S., 4th Edition." Spurring the segment’s growth will be plant-based dairy alternatives, which are expected to come to represent 40% of the combined total of dairy and dairy alternative beverages, up from 25% in 2016 when dairy alternative beverages alone accounted for barely $6 billion in retail sales.

The shift away from traditional dairy products such as cow’s milk towards plant-based alternatives revolves around health concerns with a growing number of consumers coming to believe that plant-based foods are healthier than animal-based foods. Further, there is a growing consumer base that is motivated by animal welfare concerns, leading them to choose plant-based beverages, as well as other plant-based foods over animal-based products.

“Vegetarians and vegans together account for less than 15% of all consumers and their numbers do not grow very rapidly, but a growing number of consumers identify themselves as flexitarian or lessitarian, meaning that they’ve cut back on their consumption of animal-based foods and beverages. It is this group that is most responsible for the significant and ongoing shift from dairy milk to plant-based milk,” says David Sprinkle, research director for Packaged Facts, which also recently established a free curated webpage on dairy and dairy alternatives.

In recent years, the plant-based dairy beverage alternatives category has seen an expansion of several nut- and legume-based milk alternatives beyond soy, rice, coconut, and almond to include varieties made from cashews, hazelnuts, macadamias, peanuts, pecans, and tiger nuts. In addition, there are non-dairy milks being offered made from bananas, cassava, oats, and potatoes, among others.

Looking ahead to 2018, Packaged Facts expects several of these new and novel non-dairy milks to find a wider audience:

Barley Milk: Pioneering a new plant-based milk alternative category is Canvas, a startup that has developed a way to convert unused barley grain leftover from the beer brewing process into a sustainable plant-based beverage—a winning idea for consumers concerned about the issues of food waste and sustainability. The line offers five flavors including original, cold brew latte, cocoa, turmeric chai, and matcha. All varieties are free from refined sugar, dairy, and artificial ingredients.

Flax Milk: The key selling point for flax milk is its high Omega-3s content. The leading brand, Good Karma, reports that it offers 1,200 mg per serving of this essential nutrient, further noting that its flax products are free of all major allergens. In addition to its various sweetened and unsweetened, flavored, and protein enhanced flax milks, Good Karma offers flax milk-based drinkable yogurts and eggnogs.

Hemp Milk: Participants in the hemp production industry have suggested that only 1% of the North American population has ever tried a food or beverage with the ingredient. This is a segment with the potential for rapid growth as consumers look for alternatives to the established plant-based beverage segments. Hemp is an excellent source of Omega-3 fatty acids as well as being a good source of plant-based protein, with all ten essential amino acids.

Pea Milk: While the idea of pea milk may sound quite unappetizing to many, it does have certain advantages over other dairy alternatives that may make it a hit with consumers. For example, the pea milk brand Ripple says that one serving has 8 grams of protein, the same as cows’ milk, compared to about 1 gram of protein in coconut or almond milk. And, Ripple has half the sugar of cows’ milk—something more and more consumers are sensitive to as they watch their waistlines—along with 50% more calcium, and vitamin D and iron. Ripple offers a pea-based half & half product as well as its pea milk line.

Quinoa Milk: This beverage formulation is reported to be high in protein, fiber, vitamins and all nine of the essential amino acids. It also contains important minerals such as magnesium, iron, copper, manganese, zinc, and phosphorus and has a low glycemic index.

Packaged for the Dairy Case

Both Ripple’s pea-based milks and Good Karma Flax milks are found in the refrigerated aisle, alongside dairy milk – as opposed to being packaged in the shelf-stable Tetra Paks that several brands of alternative milks use. This is because the milk does not contain preservatives and it’s also to grab consumers’ attention.