The global lactose-free products market is experiencing a significant upward trajectory, with its valuation set at USD 13.5 billion in 2023 and projected to soar to USD 23.9 billion by 2033. This market growth is driven by a steady compound annual growth rate (CAGR) of 5% from 2023 to 2033. The increasing demand for allergen-free and health-conscious food options, particularly in the wake of COVID-19, has accelerated consumer shifts towards lactose-free products.
Consumers’ eating habits are evolving rapidly due to on-the-go lifestyles and hectic schedules, leading to erratic eating patterns. This shift has driven the demand for lactose-free products as manufacturers continuously adapt to meet consumer needs. The preference for lactose-free products is also being fueled by their lower calorie profile, appealing to health-conscious individuals. The market is witnessing a surge in innovation, with products becoming more compact, convenient, and nutritionally packed.
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Key trends in the lactose-free market include the introduction of plant-based protein smoothies, organic coconut smoothies, and an expanded assortment of non-dairy alternatives such as soy and coconut milk. Companies like Genius Juice are at the forefront of this innovation, catering to the growing Gen Z customer base.
The lactose-free products market is driven by several key factors:
- The lower calorie profile of lactose-free products and their ability to prevent allergies and lactose intolerance are major drivers. Health-conscious consumers are increasingly opting for these products, boosting market growth.
- Continuous innovation in the lactose-free dairy sector has led to products with added probiotics, gluten-free claims, and reduced or no added sugar, widening the market base.
- Rising awareness about lactose intolerance and the demand for healthier, reduced-added-sugar products are propelling the market forward. Manufacturers are responding by producing lactose-free products with higher protein content to meet consumer demand for a healthier diet.
- The market is expanding as more consumers self-diagnose lactose intolerance using allergy kits, increasing the demand for lactose-free milk, butter, cream, and other products.
Key Takeaways from the Market Study
- By type, the milk segment is dominating the segment holding around 35.7% of the revenue and it is expected to grow with a CAGR of 5.2% over the forecasted period.
- By form, the no-added sugar segment is expected to dominate the lactose-free products market holding more than 35.6% revenue share and it is expected to grow with around 4.1% CAGR over the forecast period.
- By nature, conventional nature is dominating the lactose-free products market with around 76.0% share in 2022 and a CAGR of 5.7% over the forecasted period.
- Among sales channels, retail is dominating the lactose-free products market, however, online retailers are expected to dominate the market in 2032.
- In the North American lactose-free products market, the United States holds more than 79.2 percent of the market, which is expected to grow at a CAGR of roughly 5.3 percent over the projected period.
- China currently dominates the East Asian Lactose-free Products market, with a market share of over 35.6 percent and a CAGR of over 6.4 percent predicted over the forecast period.
- According to FMI, Germany is expected to account for more than 19.2 percent of the European Lactose-free Products market in 2022, with a CAGR of roughly 5.3 percent over the forecast period
Competitive Landscape
The lactose-free products market is highly competitive, with numerous mid-sized and small competitors. Major players are focusing on mergers and acquisitions, product innovation, and production capacity expansion to maintain a competitive edge. Notable developments include Nestlé Health Science’s acquisition of a majority stake in Orgain, Coca-Cola’s purchase of the remaining ownership in Fairlife LLC, and Valio and Palmer Holland’s joint venture to offer lactose-free powders in the USA market.
Market Segmentation
By Type:
- Milk
- Flavored Milk
- Regular
- Condensed
- Cheese
- Hard
- Cheddar
- Cottage
- Others
- Ice-cream
- Fats
- Confectionary Products
- Desserts
- Yogurt
- Drinkable
- Spoonable
By Form:
- Lactose-free
- No Added Sugar
- Reduced Lactose
By Nature:
- Organic
- Conventional
By Sales Channel:
- Food Service
- HoReCa
- Quick Service Restaurants (Sandwiches, fast casual, Coffee Shops)
- Retail
- Specialty Stores
- Hypermarket/Supermarket
- Convenience Stores
- Departmental Stores
- Grocery Retailers
- Online Retailers
Country-wise Analysis
- North America, particularly the USA, remains a significant market, holding more than 79.2% of the North American lactose-free products market. The market is expected to grow at a CAGR of 5.3% over the forecast period. The increasing consumption of lactose-free products due to their nutritional value and ability to prevent lactose intolerance is a major driver. Health-conscious consumers prefer lactose-free options, and there is a growing interest in trying new products, which further propels market growth.
- Germany is estimated to hold more than 19.2% of the European lactose-free products market in 2023, growing at a CAGR of 5.3%. Although a smaller percentage of the population is lactose intolerant compared to the global average, the use of allergy kits for self-diagnosis is creating a large consumer base for lactose-free products. Major players are leveraging self-analyzing apps and websites to help consumers test for lactose intolerance, driving market proliferation.
- China is a significant player in the East Asia lactose-free products market, holding more than 35.6% of the market share. The market is expected to grow at a CAGR of 6.4%. The high occurrence of lactose intolerance in the Asian population is a key driver. As urbanization continues and the adult population grows, the demand for easily digestible lactose-free products is increasing.
About Future Market Insights (FMI)
Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.
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