Got milk? Nope. Dairy-free ice cream is filling up freezers.

The open kitchen of New City Microcreamery looks as if it’s on fire. On the other side of the ice-cream serving counter, a white vapor begins to billow like smoke. Six children dash over to investigate. A chef is pouring a canister of liquid nitrogen into a massive mixing bowl. As soon as the clear liquid mixes with the base, it creates a white fog that floods the kitchen. It looks like dry ice at a rock concert. 

This is no ordinary ice-cream parlor, and not just because of the neat effects. New City Microcreamery is taking the sugar and, sometimes, cream out of ice cream. The chefs utilize an innovative process – using liquid nitrogen as a bonding agent so less sugar is required – for ice cream as well as confections made with coconut milk, tapping into a rising consumer trend for nondairy alternatives. 

“Vegan chocolate avocado is probably the most famous one,” says chef Alyssa Lieberman. “Nondairy stuff like that has always been something that we are committed to because we aim to be inclusive. ... And it certainly is something that is in high demand.”

Startups such as New City are leading a boom of nondairy alternatives to ice cream. These craft-style microcreameries are breaking new ground with products that are billed as not only good for you but also good for the planet (fewer dairy cows means less methane emissions). Their creativity comes in the form of recipes with sophisticated flavors that emulate the texture – and fun – of dairy desserts. 

“There is a unique surge of innovation in maybe the last three to five years in this realm,” says Scott Rankin, chair of the food science department at the University of Wisconsin-Madison. One of its departments, the Frozen Dessert Center, provides technical expertise for producers in the nondairy sector. “Many of our clients are small, nimble, entrepreneurial,” he adds.

There are a lot of new players. Global Market Insights, a consumer research firm, predicts that dairy-free ice cream will become a $1 billion industry worldwide by 2024. But there’s intense competition in the sector and only so much space in the freezer. Successful companies will have to meet the growing demand by millennials and Generation Z consumers for animal-free products that closely replicate the texture and taste of ice cream. Unusual flavor combinations are a plus – maple is fine, but hold the bacon – as are lower calorie options.

Cajou Creamery in Baltimore claims to meet all those criteria. Husband-and-wife co-founders Nicole Foster and Dwight Campbell cater to health-conscious consumers by handcrafting pints made with cashew, almond, and hazelnut milks. They tout the products’ “responsibly sourced” ingredients and lack of sweeteners and additives. The baklava and kulfi recipes are beyond anything you’ll find among Baskin-Robbins’ 31 options. 

“What we’re finding is a lot of young people who are health conscious but adventurous want to eat something healthy, but they don’t want to sacrifice flavor and taste,” says Ms. Foster. “We want [Cajou] to stand for innovation, cultural exploration, and how to bring the world to you on a spoon.”

Cajou’s products are available in stores in and around Baltimore and via shipping. It’s about to open its first retail store in the Bromo Arts District in conjunction with four other Black-owned businesses in a bid to revitalize the downtown area. 

The challenges of mass production and transportation mean it’s difficult for frozen dessert to scale up beyond regional markets. But it’s not impossible. NadaMoo!, a coconut-milk product that uses agave nectar in place of sugar, made the leap from Austin, Texas, to supermarkets nationwide in 2016. 

Brave Robot, a newcomer, is on course for similar market saturation. Less than a year since it first hit shelves, the Los Angeles-based dessert is already available at 5,000 retailers. Brave Robot’s product line incorporates animal-free whey protein developed in a lab by scientists at Perfect Day. Brave Robot says it’s identical to whey protein in regular milk.

“It’s dairy ice cream, just without the cow,” writes co-founder Paul Kollesoff in an email, noting that companies like his have to get it right. “We know from the data that 70% of shoppers who buy plant-based never come back for a second trip.”  

Mr. Kollesoff says that legacy brands still dominate the ice-cream pint category but nimble startups can gain traction. Numerous smaller entrepreneurs have launched products with bases such as chickpeas, soy, tahini, oats, coconut, and avocado. 

But the biggest players aren’t about to let new competitors chip into their lead. Last year, Ben & Jerry’s became the first company to offer nondairy frozen desserts made with sunflower butter. Virtually every brand-name ice-cream company now churns out vegan products. One even went so far as to embark upon an unconventional partnership with a nondairy startup.

“Graeter’s is a dairy company, but they just started making ice cream with Perfect Day’s animal-free whey protein,” says Anna Boisseau, managing editor of Dairy Foods magazine. 

“The fact that a dairy company themselves decided to make a product with that for their nondairy and frozen dessert was really interesting. So I predict we’ll see even more of that,” she says.

One area where smaller ice creameries believe they hold a significant advantage over Big Dairy is in labeling and eco-friendly packaging. The so-called clean label movement looks for simple and recognizable ingredient lists. That means cutting out additives and artificial sweeteners. It’s the rocky road less traveled. 

Rachel Geicke, founder of a frozen dessert called Snow Monkey, can attest to that. At age 20 she bought a blender at Bed Bath & Beyond and started trying to develop a plant-based frozen dessert with a banana purée. During the downtime of the pandemic, Snow Monkey teamed with a former senior product developer for Ben & Jerry’s to refine its recipes.

“Snow Monkey basically defied the traditional basis of ice cream, which is dairy, fat, and sugar,” she says. “[We] actually eliminated all three of those.” 

Consumers, especially in Gen Z, demand transparency for what’s in their food, she says. More than that, “it’s a generation calling you out if you’re not aligned with your mission statement and your values.”

Milleñea Román, a Gen Z artist and model in Atlanta, exemplifies that ethos. Since becoming vegan in early 2020, she has scrutinized the labels of a lot of nondairy frozen dessert products. “I have to make sure there’s no animal products, sugar,” says Ms. Román, who is particularly partial to Trader Joe’s strawberry oat milk flavor. “A big issue, honestly, is a lot of packaging, which is a contributor to climate change. That’s definitely another part of being vegan – helping the Earth.”

Back at New City Microcreamery, the liquid nitrogen clouds have dispersed and Ms. Lieberman is raving about the company’s Vegan Mounds flavor. It’s a combination of toasted coconut, dark chocolate chips, and coconut milk. Ever keen to appeal to vegan customers, she’s currently developing new products with other nondairy milks. 

“In the past, it was sort of easy to trick people who had a lot of special requirements into giving them just something that they could eat so that they felt included,” says Ms. Lieberman, who won a 2020 Boston Rising Star Award from StarChefs magazine. “But I think now we’re in a great place where there are so many options out there. They have the ability to be discerning and make choices based on what’s actually good.”