Dairy products and alternatives in Australia is experiencing a modest growth rate of 3.6% in retail value terms, slightly above the overall growth rate for the industry in Asia Pacific and Australasia. One of the key drivers of growth in the industry is a growing focus on functional benefits across the major subcategories and it is becoming a pillar of consumer health and wellness.
Shifting to a protein-backed and sugar-free landscape
Consumers in Australia place much importance on protein as a key ingredient in maintaining health and wellbeing. Protein not only helps to build and maintain muscle but is also one of the most valuable nutrients in promoting longevity and enjoying an energetic lifestyle. High protein milk grew at an average rate of 8.7% in the last five years, with regular new product launches over this time taking advantage of the trend.
Plant-based alternatives aiming to close the nutritional gap
Plant-based dairy has experienced strong growth in Australia, growing at a rate of 5.2% in 2025, a faster rate than the overall dairy industry. While the plant-based market is no longer reaching the heights it did in the past (including double-digit growth prior to 2021), the market is still showing strong potential. In Euromonitor’s Voice of the Consumer: Health and Nutrition Survey, fielded in February 2025, Australian consumers indicated the main reasons for purchasing plant-based dairy alternatives were about feeling healthier, improving digestion and reducing sugar intake.
One of the pain points for consumers is that plant-based dairy often does not have the same nutritional value as the dairy product it is trying to replace.
32% of Australian consumers indicated that one of the reasons they do not consume plant-based dairy is due to dairy being perceived as being good for them
Source: Euromonitor Voice of the Consumer: Health and Nutrition Survey, fielded February 2025
However, this is an area where brands are actively trying to deliver improved results. So Good, one of the leading brands in plant-based milk in Australia, launched a range of high-protein oat milk, with 10g of protein per serving, which is similar to the 8-9g of protein per serving in fresh cow’s milk. In the Australian market, consumers are also indicating they are open to the idea of getting more protein from plant-based products, with 15% of consumers reporting they prefer to get protein from plant-based dairy products.
Over the next five years, the dairy products and alternatives industry in Australia is forecast to grow at an average rate of 0.8% per year, with plant-based dairy having the strongest forecast CAGR of 3.1%. During this time, high protein and low sugar will remain powerful claims for new product development as consumers continue to work on their long-term lifestyle goals. However, brands will also need to explore other functional benefits to pave the way for the next big trend. In other parts of Asia Pacific, brands are responding to their respective ageing population trends with products focused on functional benefits. Some of the key concerns consumers over the age of 60 in Asia Pacific are reporting include memory, heart and incontinence. These health concerns present new opportunities for dairy products to fortify their products with benefits beyond protein to appeal to a wide demographic of consumers.
Read our report, The World Market for Dairy Products and Alternatives, for further insights about the state of the global dairy industry.