Australia’s plant-based dairy market continues to outpace traditional dairy – but signs of maturity are emerging as consumers seek better nutrition, stronger functionality, and more authentic flavour from their alt-dairy products.
According to Euromonitor International, the plant-based dairy segment – covering dairy milk, yoghurt and cheese alternatives – is growing at 5.2 per cent this year, compared with 3.6 per cent growth in the overall dairy category. Forecasts suggest plant-based products will continue to expand faster than dairy through to 2030.
But the era of explosive, double-digit growth appears to be over.
“Plant-based dairy has evolved from a small base, growing at double-digit rates for a very long time,” says Julia Illera, research manager at Euromonitor International. “Now it’s reaching a level of maturity. However, it remains more dynamic and continues to grow faster than the overall dairy market.”
From novelty to normal: A maturing market
Euromonitor has tracked the rise of plant-based dairy in Australia for more than a decade. Growth peaked in 2013–14, before spiking again in 2020 amid heightened health awareness during the pandemic.
Now, Illera says, the category is stabilising as consumers make more informed choices.
“A few years ago, people switched to plant-based because it wasn’t dairy,” she explains. “Today, they’re choosing it because it’s a good product – whether that’s a chocolate-flavoured oat milk or a high-protein yoghurt alternative. The motivation has shifted from novelty to quality.”
That evolution has also brought greater competition. With several plant-based brands merging, the market is now dominated by fewer but stronger players, including Cocobella (by Made), Coyo and Vitasoy in the yoghurt segment.
“This broader competition benefits consumers through more choice and innovation,” Illera says. “But it also puts pressure on brands to clearly differentiate. If your nutritional profile isn’t strong or your product lacks a clear functional claim, it becomes harder to stand out.”
Health and functionality take centre stage
While rising living costs are nudging some consumers back toward cheaper dairy products, Euromonitor’s data shows that nutrition perception is playing a greater role in slowing plant-based growth.
“One-third of Australians still don’t consume plant-based dairy because they perceive dairy as nutritionally superior,” says Illera. “People grew up with the idea that milk is a complete food. As more information circulates, consumers are comparing nutritional profiles – and noticing gaps in protein and calcium.”
To bridge that gap, manufacturers are reformulating and fortifying products with added protein, calcium and other nutrients. High-protein oat milks, for example, now offer levels similar to cow’s milk.
“Producers are actively improving their nutritional credentials,” Illera notes. “They’re reducing sugar, adding protein or calcium, and incorporating functional benefits like probiotics, botanicals, or ingredients that support cognitive and physical wellness — especially appealing to ageing populations.”
Consumers are increasingly driven by health and wellness motivations: Digestive health, sugar reduction, and ‘clean label’ attributes such as natural, organic, or lactose-free claims.
“Functionality has become a decisive factor,” Illera says. “We’re seeing products that combine the appeal of plant-based with the credibility of fortified, probiotic-rich options – much like a Yakult-style yoghurt drink that’s well recognised for its gut health benefits.”
Innovation drives differentiation
As plant-based dairy matures, innovation is becoming more targeted and sophisticated.
Coconut-based milks are gaining traction, attracting consumers seeking lighter tropical flavours with natural or allergen-free positioning. At the same time, improvements in taste, texture and convenience are critical to winning back lapsed buyers, particularly in categories like cheese and spreads.
“Plant-based cheese used to be seen as crumbly and niche,” Illera says. “But newer versions have improved texture and meltability, which is helping to broaden appeal.”
Flexitarian appeal and consumer sophistication
The rise of flexitarian diets – where consumers moderate their intake of animal products without eliminating them – has further normalised plant-based dairy in Australia.
However, as consumers become more informed, expectations are rising. Illera says that when plant-based milks first became popular, everyone jumped in to try them. Now, with greater awareness, people are reading labels more carefully. They understand that some plant-based milks need oils or sweeteners to achieve creaminess. That transparency is making them more selective.
The next phase: Competing on quality
As price competition intensifies and category boundaries blur, Euromonitor expects differentiation to hinge more and more on quality and functionality.
“This is a more competitive market, and that changes the rules,” says Illera. “Consumers now have more choice – so to justify their loyalty or a premium price, a product must deliver clear, evidence-backed benefits.”
That could mean cleaner ingredient lists, stronger nutritional claims, or proven functional benefits tied to wellness trends.
The next phase for plant-based dairy isn’t about replacing dairy, Illera concludes. It’s about giving consumers more options and better products that align with their health, lifestyle and sustainability values.
- Euromonitor has published a report, Health Trends in Focus for Dairy Products in Australia and another, focused on the global market for dairy products and alternatives, Key Trends Driving Dairy Products and Alternatives.
