Non-profit food research initiative Nectar has unveiled its Taste of the Industry 2026 report, built on what is claimed to be the most comprehensive public sensory analysis of dairy alternatives to date.
The organisation aims to accelerate the transition of the $1.2 trillion global dairy industry toward less carbon-intensive plant-based alternatives, with the dairy industry among agriculture’s largest contributors to greenhouse gas emissions.
Its latest report on alt-dairy follows its 2025 report that focused on meat alternatives. Like the alt-meat study, it is based on an extensive dataset on the sensory performance of alternative proteins, with Nectar having utilised over 30,000 consumer sensory evaluations to build its alt-protein research so far.
The global dairy-free market is forecasted to reach $66.9 billion by 2030, but has historically been held back by taste and texture constraints as manufacturers struggle to replicate the familiar, tangy and creamy flavours of dairy products like cheese and yogurt. However, significant strides in enhancing taste and texture have been made in recent years – though Nectar’s report found that there is still a huge opportunity for improvement.
For the new study, Nectar evaluated 98 commercialised dairy-free products across then categories, with 2,183 omnivore and flexitarian consumers in San Francisco and New York, US.
The product selection spanned the US market, from established brands with nationwide distribution to emerging food-tech companies working with novel ingredients. Blind consumer panels and conventional dairy benchmarking were used to assess how dairy-free products perform in familiar applications – such as barista drinks in coffee, and mozzarella alternatives on pizza.
Milk alternatives and creamers lead in taste parity
The report found that multiple categories – milk alternatives, particularly barista-style, and creamers – are leading the way in competing with conventional dairy on taste.
Califia Farms’ Oat Barista Blend product attained taste parity with the dairy Horizon Whole Milk in a hot latte. This was the only product to have achieved taste parity, defined as an at least 50% likelihood that Califia would be preferred on a future test against the dairy benchmark.
Three other products – Ripple Barista Blend, Dream Oatmilk Barista, and Oatly Sweet & Creamy Oatmilk Creamer – neared parity, with the dairy benchmark failing to achieve statisticaly significant preference.
R&D needed to close taste gap
The average dairy-free product was rated ‘like very much’ or ‘like’ by just 33% of participants, compared to 63% for the dairy benchmark, highlighting that taste improvements are still needed to unlock the category’s full potential.
Ice cream, cream cheese and mozzarella were the furthest behind, highlighting opportunity for improvement, with gaps in liking of 1.3 points to 2.1 points compared to the dairy benchmark products.
Flavour and texture are highlighted as key focus areas for improvement. Mozzarella and cheddar had the highest gaps in purchase intent (25% vs 67% for mozzarella, 40% vs 71% for cheddar), indicating the need for overall sensory improvements. This includes qualities such as stretching and melting capabilities, as well as decreasing stickiness and ‘gumminess’ to drive consumer adoption.
Milk alternatives, the best-tasting category, had 15 times higher market share than cheese alternatives, the worst-tasting category.
Categories that were rated at least 1.3 points worse than the dairy product have captured less than 2% of the market – these include cheese, cream cheese, sour cream and ice cream.
The biggest opportunities to improve flavour were in areas such as increasing richness, creaminess, sweetness and expected colours (such as whiteness in alt-milks), while decreasing undesirable aftertastes and artificial/chemical flavours. In cheese, increasing sharpness is also a notable focus.
Opportunities to increase purchase intent
Interestingly, despite increased scrutiny over ‘clean labels’ across the broader food and beverage industry, ingredients and macronutrients were found to have a ‘limited’ impact on purchase intent and product performance.
Higher protein increases purchase intent but reduces overall product performance, Nectar’s research found. Protein ingredients overall, except for pea, were reported by at least 20% of consumers as having an impact on their purchase intent (versus 16% for oils on average).
However, 48% of consumers said they ‘strongly agree’ that health factors into their decision making, suggesting an opportunity to drive growth through health-centric marketing. These consumers were also significantly more likely to purchase dairy-free products than the general population.
Nectar’s report also found that dairy-free products benefit from making consumers feel ‘more refreshed and responsible,’ with these emotions associated with moderate increases in purchase intent.
Nostalgia, indulgence, satiation and joy were more frequently associated with traditional dairy-based products. Dairy-free brands could therefore focus on attempting to replicate these positive emotions in order to drive adoption, with suspicion and disappointment more commonly experienced with dairy-free products and showing a large negative impact on purchase intent.
Price was also a significant factor. Introducing a 25% price premium prices out almost half (43%) of consumers compared to price parity, the report found, highlighting an opportunity to reduce perceived price gaps with smaller pack sizes or messaging focused on absolute dollar discounts – consumers tend to focus on absolute dollars instead of percentages, Nectar stated.
The state of alt-dairy
Generally, Nectar found that the purchase intent for dairy-free products is positive and outperforms plant-based meat. 67% of consumers said they ‘would buy’ or ‘definitely would buy,’ scoring 0.4 points higher on purchase intent compared to meat alternatives.
Dairy products are still ahead, with 66% stating that they ‘definitely would buy’ or ‘would buy’ (compared to 49% for dairy-free).
Creamer, milk and barista milk categories show that dairy-free could meet or even exceed dairy purchase intent – dairy-free creamer scored a purchase intent of 5.6 points vs 5.5 points for dairy creamer, and average purchase intent for dairy-free milk was equal to dairy.
Caroline Cotto, director of Nectar, said: “The path to mainstream adoption for dairy alternatives runs through taste”. Though she noted “remarkable progress from category leaders,” she said that there is still “significant work ahead for the dairy-free industry”.
“Our goal is to provide the objective sensory data that drives R&D innovation and ultimately expands consumer adoption of sustainable alternatives to dairy,” she concluded.
