THE time is right for the dairy industry to fight back against the ever increasing use of alternative milk products, particularly for use on cereals or in hot drinks, according to the latest RaboResearch dairy report, Dare Not to Dairy.

While alternatives such as soya, coconut and even rice milk have competed for decades, competition has intensified in recent years with the result being that global retail sales for such products has soared by 8% per year over the past 10 years. Last year, global dairy-free 'milk' retail sales were valued at $15.6bn, which represented 12% of the total fluid milk and alternative sales, according to global market intelligence, Euromonitor.

Nutrition, price, and flavour tend to favour dairy, but changing consumer perceptions around health, lifestyle choices, curiosity, and perceived sustainability are increasingly drawing more people to select ‘dairy-free’ products.

“Global demand for dairy is expected to grow by 2.5% for years to come, with demand for non-fluid categories offsetting weak fluid milk sales,” said Tom Bailey, senior dairy analyst at RaboResearch.

“While it’s not essential to diversify into dairy alternatives, it would be wise for the milk industry to at least learn one thing from their success, which may be putting the consumer first and trading in the old grass-to-glass model for glass-to-grass.”

The report shows that the challenge for the dairy sector lies mostly in fluid milk, where retail sales in western Europe and the US fell by 5% to $18.6bn and 3% to $12.5bn respectively, in the five years to 2017.

Dairy players who invested in milk alternatives across the supply chain – from planting almond trees to buying brands, were also shown to be favoured producing returns above those of standalone dairy farms.