Japan Dairy Alternatives - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2017 - 2029

Japan Dairy Alternatives - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2017 - 2029

The Japan Dairy Alternatives Market size is estimated at USD 1.39 billion in 2024, and is expected to reach USD 1.85 billion by 2029, growing at a CAGR of 5.88% during the forecast period (2024-2029).

Strong penetration of organized retail channels fueling the market growth

• The off-trade segment holds a dominant position in the distribution channels of the Japanese dairy alternative market. Among the off-trade channels, supermarkets and hypermarkets occupied a significant value share of 71.9% in 2022. These channels benefit from their proximity to consumers, particularly in large and developed cities, influencing their purchasing decisions with the wide variety of products available. Furthermore, the adoption of an omnichannel approach by major supermarket and hypermarket retailers worldwide is driving the market for dairy desserts.
• The on-trade channels in Japan have a relatively small market presence and are still in the early stages of development. Consumers prefer to consume dairy alternatives at home and are less inclined to eat at restaurants or food service outlets. Plant-based milk and non-dairy butter are experiencing growth, with some restaurants in the region using plant-based milk as an ingredient option in cocktails, smoothies, coffees, and espresso-based drinks. Consequently, the sales value of plant-based milk through on-trade channels increased by 5.43% in 2022 compared to 2021.
• Within the off-trade segment, the online retail channel sub-segment is experiencing the fastest growth, projected to achieve a CAGR of 15.6% over the forecast period. The expansion of e-commerce has provided companies with the opportunity to reach a broader target market and effectively cater to customer needs. Convenience is the primary motivation for Japanese shoppers transitioning to online grocery shopping. Among all dairy alternative products, plant-based milk accounted for the majority share in off-trade channels. In 2022, plant-based milk represented over 90% of the value share.

Japan Dairy Alternatives Market Trends

Surging health and wellness consciousness propels the adoption of plant-based dairy alternatives in Japan

• A plant-based diet, including veganism and vegetarianism, is gaining popularity in Japan. The estimated percentage of the vegan and vegetarian population in Japan is about 4-5%. This number has significantly increased over the past two to three years and is considered a major driving force behind the consumption of dairy alternative products.
• Various factors, such as ethics, politics, environment, religion, and economics, contribute to Japan's inclination toward plant-based diets and lifestyles. As a result, the per capita consumption of dairy alternatives is expected to grow significantly during the forecast period. Additionally, Japan hosts annual vegan festivals like the Kyoto Vegan Gourmet Festival, Green Food Festa, and Nagoya Vegan Gourmet Festival to promote vegan foods in the market. These events continue to fuel the demand for non-dairy butter throughout the forecast period.
• The rising awareness of health and wellness among Japanese consumers is a key factor driving the consumption of plant-based dairy alternatives in the country. Many Japanese consumers are lactose intolerant and, therefore, do not consume milk or milk products. This has led to increased consumer demand for dairy alternative products. The per capita consumption of dairy alternatives is estimated to increase by 5.41% in 2023-2024.
• Plant-based milk is the most consumed category among all dairy alternatives across the country. Soy milk and almond milk are particularly popular and collectively accounted for a 98.08% share of the overall plant milk consumption in Japan in 2022.
• The per capita consumption of non-dairy butter increased by 1.71% in 2021-2022. The primary motivations for Japanese individuals adopting non-dairy butter are a concern for animals or sustainability, followed by a change in dietary habits.

Japan Dairy Alternatives Industry Overview

The Japan Dairy Alternatives Market is fairly consolidated, with the top five companies occupying 65.29%. The major players in this market are Ezaki Glico Co. Ltd, Kikkoman Corporation, MARUSAN-AI CO. LTD, Otsuka Holdings Co. Ltd and Saputo Inc. (sorted alphabetically).

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