The challenge for dairy lay mostly in fluid milk, retail sales in Western Europe and the United States having declined at an annual rate of 5% and 3% respectively in the five years to 2017, according to Euromonitor.
The results over the past five years had favoured dairy players who had invested in milk alternatives across the supply chain, from planting almond trees to buying brands.
Global demand for dairy was expected to grow 2.5% annually for years to come, demand for non-fluid categories offsetting weak fluid milk sales.
There was cause for concern for the dairy industry, sales of fluid milk globally having fallen 3.5% in the five years to 2017 versus dairy alternatives, which had grown 4% over the same time.
That was ``somewhat baffling'' and the dairy industry rightly pointed to the nutritional and flavour superiority of dairy compared with plant-based beverages, Mr Bailey said.
``However, according to our research, brands in this space get more traction by connecting emotionally, rather than through facts and figures.
``The marketers of dairy alternatives generally appear to be doing a better job of connecting emotionally with consumers who favour more dairy-free options to meet their own perceptions about health and lifestyle.''
The dairy alternative space was bound to continue to develop and move in response to rapidly changing consumer demands.
But the market was challenged in several ways which could make the sector vulnerable over the coming decade.
According to multiple studies, plant-based dairy alternatives did not perform as well in conventional taste tests, hence alternatives were being sought that matched the taste of milk.
They were also less nutrient-dense, cost more than conventional dairy products, were highly processed and had lengthy comparative ingredient lists.
Improving protein quality and quantity was a major challenge, as increasing plant protein tended to negatively impact taste.
According to RaboResearch, the consumer awareness of the protein quality of dairy alternatives remained relatively low but was gaining traction.
To date, nutrition had not been a major challenge for dairy alternatives but, as consumers increasingly considered nutritional content on labels, the weakness in dairy alternatives might come to light.
Fat was back and alternative dairy beverages did not have much of it; the lower fat percentages in dairy alternatives did not bode well for them.
The retail price of dairy alternatives was another hurdle to overcome. Alternative dairy beverage prices were typically much higher than dairy prices in the US and Europe.
The driver of those higher prices tended to be processing costs. Dairy alternative processors generally had not yet reached economies of scale, resulting in higher production costs.
Hoping for the best and waiting for the tide to turn was not an advisable strategy for the dairy industry; consumers had spoken.
"They want new and innovative quality products - dairy-based or otherwise - and they were willing to pay for them.''
