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Lactose-Free Milk Market worth $USD 34.4 billion by 2032 -Hood Dairy, Fairlife, Organic Valley, Danone, Dean Foods, Seprod, Natrel, Valio, Arla, Sterilgarda, LALA, Alpura, Nestle, Liddells, Procal, Anchor Dairy, Mary Anne, Amul, Yili, Mengniu

09-30-2022 09:58 AM CET | Advertising, Media Consulting, Marketing Research

Press release from: MR ACCURACY REPORTS

the lactose-free products market is estimated to be valued at USD 11.11 billion in 2021 and is projected to reach USD 34.4 billion by 2032, recording a CAGR of 11.11 %, in terms of value. Factors such as the increasing awareness of lactose intolerance among consumers across regions and the growing demand for reduced added sugar or no added sugar products are projected to drive the growth of the lactose-free products industry during the forecast period. However, the growth of the lactose-free products market is inhibited by factors, such as high cost of lactose-free products and stiff competition from plant-based alternatives.

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Restraints: High price of lactose-free products
For the production of lactose-free milk, the milk has to be treated with ultra-high temperature (UHT) method of the pasteurization process for increasing its shelf-life and improving the consistency of milk while turning it into lactose-free milk. For turning the normal milk to lactose-free milk, the milk is treated with lactase enzymes for breaking the complex lactose disaccharide into two simple sugars, namely, glucose and (monosaccharides) galactose. This process of converting the milk into lactose-free milk increases the price of lactose-free dairy products as compared to normal packaged dairy products. Due to these factors, lactose-free milk is offered under the premium product category, which caters to a smaller consumer population, wherein ordinary milk is a commodity offered at cost-effective prices, due to which it is consumed by a large-scale population.

Opportunities: Availability of lactose-free products with added health benefits
The increase in innovations in lactose-free dairy products has led to a rise in health benefits offered by lactose-free dairy products, which represents key growth opportunities for the lactose-free dairy market. The claims in lactose-free dairy products, such as gluten-free and low/no/reduced sugar, help in expanding the consumer base. The innovations are being witnessed around digestive health, such as lactose-free milk products with probiotics. For instance, Activia is a probiotic yogurt introduced by Danone Company S.A. (France), which contains probiotics that improve digestive health. Probiotics are bacteria that have been scientifically studied and proved that if they are consumed in sufficient amounts, they help in providing health benefits beyond basic nutrition. In addition, The Coca-Cola Company (US) under its brand Fairlife LLC provided lactose-free milk with Omega-3, which helps in improving brain health. These innovations are projected to drive the growth of the market.

Dairy manufacturers are capitalizing on this trend to expand their consumer base by promoting easy digestion, lower fat, and sugar content, developing a variety of products by mixing lactose-free ingredients with healthy ingredients, such as vitamins, proteins, and fibers, for providing a wide range of choice to consumers. The inclination of consumers toward healthy choices of food & beverages is increasing globally. The willingness of consumers to pay extra for food & beverages with health features is growing. This creates growth opportunities for lactose-free products in the dairy industry during the forecast period.

Challenges: Stiff competition from plant-based alternatives
Lactose intolerant consumers across the world have become conscious about their health, as they are aware of allergies or gastrointestinal diseases caused by the intake of lactose in their bodies. The major challenges for lactose-free products are plant-based alternatives as the demand for plant-based products is increasing and their availability in the market is rising as compared to that of lactose-free products. For instance, plant-based milk, such as soy milk, rice milk, almond milk, coconut-based milk, cashew milk, and oat milk, are increasingly present in the market. Therefore, lactose intolerant population focuses on opting for plant-based products as an alternative for lactose-free products. Furthermore, plant-based products have high nutritional value. For instance, soy milk is original plant-based milk, which constitutes 8 grams of carbohydrates, 7 grams of protein, and 100 calories in an 8-ounce pour. It is also a preferred alternative for those adhering to a diet lower in fats as it contains only 4 grams of fat with only 5 grams of saturated fat and is also low in sugar. Almond milk is one of the most widely consumed plant-based milk in North America, the EU, and Australia. In addition, doctors suggest that almond milk is an effective alternative for children and adults who suffer from allergies or intolerances to milk. However, people are shifting their interest from dairy products to plant-based products, as they are turning vegan these days. In addition, various health experts recommend plant-based diets to people who have heart problems, such as high blood pressure, diabetes, and other health conditions.

Major Key players profiled in the report include:
Hood Dairy, Fairlife, Organic Valley, Danone, Dean Foods, Seprod, Natrel, Valio, Arla, Sterilgarda, LALA, Alpura, Nestle, Liddells, Procal, Anchor Dairy, Mary Anne, Amul, Yili, Mengniu

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Segmental Analysis:
The report has classified the global Lactose-Free Milk market into segments including product type and application. Every segment is evaluated based on share and growth rate. Besides, the analysts have studied the potential regions that may prove rewarding for the Lactose-Free Milk manufcaturers in the coming years. The regional analysis includes reliable predictions on value and volume, there by helping market players to gain deep insights into the overall Lactose-Free Milk industry.

Market split by Type, can be divided into:
Whole Milk, Low-Fat Milk, Fat-Free Milk.

Market split by Application, can be divided into:
Baby, Adults

Report Scope:
This research report categorizes the lactose-free products market based on type, form, category and region.

By Type
Milk
Plain
Flavored
Other milk types*
Yogurt
Set
Drinking/ Ambient
Regular
Probiotic
Other yogurt types**
Cheese
Cheddar
Cottage
Hard
Soft
Other cheese types***
Ice cream
Confectionery products
Other types****
*Other milk types include sour milk products such as kefir and ayran.

**Other yogurt types include skyr, Greek yogurt, and cream yogurt.

***Other cheese types include cream cheese, curd cheese, and blue cheese.

****Other types include milk powder, infant milk formula, butter, spreads, and sour cream.

By Form
Lactose-free
No added sugar products/ reduced sugar claims
Reduced lactose products
By Category
Organic
Inorganic
By Region
North America
Europe
Asia Pacific
South America
Rest of the World (RoW)
Middle East
Africa
Recent Developments
In January 2020, The Coca-Cola Company acquired all the remaining stake in Fairlife LLC from its joint venture partner Select Milk Producers to meet the fast-changing demands of consumers for lactose-free products.
In April 2020, Valio and Palmer Holland (US) entered into a joint venture to offer lactose-free powders in the US market.
In May 2017, Danone launched a lactose-free product line, under its brand Activia, in Spain with several flavors for tapping the lactose-free market in the country.

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An individual's small intestine produces the enzyme lactase on its own, which is in charge of breaking down lactose in the body. It is a commercially accessible enzyme that can be isolated from molds like Aspergillus Niger and Aspergillus oryzae as well as yeasts like Kluyveromyces lactic and fragile. Lactose-free dairy products are similar to regular milk and other milk products on the market in terms of flavor, texture, and nutritional value.

Market participants have been compelled to concentrate on strong branding and enhanced advertising as a result of the fierce competition in the lactose-free dairy market. Gaining consumer exposure to the products through branding and advertising is essential. Players are therefore engaging in profitable marketing strategies to entice customers.

Additionally, a rise in the number of lactose-free dairy product launches that are supplemented with vitamins and minerals draws customers to the product. Consumers can recognize the chemicals used in a product and the benefits they can obtain from consuming it due to strong branding by market participants and the implementation of clear labels on the items.

Manufacturers are aiming to make products with more protein components to meet the gradual shift in taste as well as the preference of consumers to maintain a better diet in order to drive the market for lactose-free dairy products. The market for dairy products without lactose is therefore anticipated to grow over the projected period.

COVID-19 Impact Analysis

The lactose-free market is one of the markets that has suffered because of the COVID-19 outbreak. Business demands have changed to liquidation methods and stock organization as a result of post-pandemic client preference shifts, with consumption at a standstill and inventory building up in stockrooms. It was one of the most severely impacted businesses by the pandemic due to the combined effect of outlet closures as well as balanced results due to the fast deteriorating financial position. Also, because of the strict lockdown measures put in place by the government, the COVID-19 pandemic afflicted both farmers and employees.

Market Growth Factors

Rising Prevalence Of Lactose Intolerance, Awareness, And Self-Diagnosis

Lactose, the sugar in milk, cannot be fully absorbed by those who have lactose intolerance. They can witness diarrhea, gas, and bloating as a result of consuming dairy products. The illness, which is also termed lactose malabsorption, is normally harmless, however, its symptoms can be irritating. Lactose intolerance is typically caused by insufficient amounts of the enzyme lactase, which is produced in the small intestine. The number of lactose intolerant people is rising all over the globe.

Increasing Popularity Of Social Media Marketing

Some of the reasons that are fueling the industry, even more, include extensive celebrity and athlete marketing campaigns to promote vegetarianism as a healthy lifestyle choice and the simplicity of product accessibility through an abundance of online retail channels. As a result of the growing penetration of the internet along with the increased number of people using various social media platforms, people are becoming more aware regarding the issues such as lactose intolerance as well as the availability of lactose free substitutes.

Market Restraining Factors

The High Cost Of Lactose-Free Ingredients

When making lactose-free milk, the milk must be pasteurized using the ultra-high temperature (UHT) method in order to extend its shelf life and improve the consistency of the milk while creating lactose-free milk. Milk is processed with lactase enzymes, which break down the complicated lactose disaccharide into two simple sugars, known as glucose and (monosaccharide's) galactose, to transform regular milk into lactose-free milk.

Product Launches and Product Expansions:

Jul¬-2022: Danone released the latest Dairy & Plants Blend baby formula. This launch focused on fulfilling parents' demand for feeding options suitable for vegetarian, flexitarian, and plant-based diets along with addressing their baby's specific nutritional requirements. The latest Dairy & Plants Blend recipe combines the advantages of Danone's trusted dairy-based baby formulas with more plant nutrition that includes carefully selected plant proteins, fats, and fibers. It is the industry's first blended baby formula for healthy babies, which contains more than half (60%) of the plant-based protein.

Mar-2022: Organic Valley released Creamers, a new premium organic creamer available in french vanilla and sweet cream flavors. The company aimed at providing customers with creamers that have lactose-free, smooth, creamy taste and no artificial ingredients.

Nov-2021: General Mills released Bold Cultr, an animal-free dairy cheese brand. It's a big deal that actual dairy proteins can be produced without a cow and From this launch, the company aimed at meeting the consumer need for animal-free substitutes which could fulfill cheese demand.

Sep-2021: Lifeway Foods introduced the latest plant-based Lifeway Oat line. Also, the latest Chocolate Kefir flavor would be launched at the upcoming Natural Products Expo East 2021. Through this launch, the company would be able to expand its portfolio of probiotic beverages beyond their best-selling kefir to include a dairy-free, certified vegan option that offers customers probiotic advantages to help support a healthy gut and immunity.

May-2021: Nestlé released Wunda, a new pea-based beverage. The product would first be introduced in France, the Netherlands, and Portugal, and then in other European markets. Under this launch, Wunda offers most cereal-, nut- or pea-based milk alternatives that have a specific taste, are less in protein or don't mix or foam well in hot beverages. This shows customers might require two or three plant-based options for different uses until now.

Apr-2021: Nestlé expanded their existing brand Milo by adding plant-based versions. This latest version substitutes the milk in the original recipe with almond and soy, but the other two core ingredients - malt and cocoa stay the same. From this expansion, the company focused on providing customers with on-trend alternatives in formats they want.

Sep-2020: Nestlé expanded its range of dairy alternatives by introducing a plant-based Nesquik drink in Europe which consists of less sugar in comparison to the existing version. The latest ready-to-drink beverage would initially go on the market in Spain, Portugal, and Hungary before being rolled out in other European countries. This launch would address Nestlé's growing focus on authentic plant-based food and beverages as customers look at different ways to enjoy and balance their protein intake and lower the environmental footprint of their diets.

Acquisitions and Mergers:

May-2021: Saputo took over Bute Island Foods, an innovative manufacturer, marketer, and distributor of a variety of dairy alternative cheese products. The acquisition would allow the company to accelerate its growth in this region worldwide, putting innovation at the forefront of its priorities.

Mar-2021: Danone took over Follow Your Heart, Los Angeles-based vegan dairy maker by purchasing Earth Island shares. This acquisition would support the company's growth in plant-based beverages, yogurt alternatives, and creamers, further accelerating the growth of Danone's North American plant-based business.

Apr-2020: Prairie Farms Dairy acquired Dean Foods Company, an American food, and beverage company. This acquisition would enable the company to grow from 44 (processing) plants to 52 plants, growing from 16 states' distribution to 20 states' distribution.

Jan-2020: Coca-Cola completed the acquisition of Fairlife, an American brand of ultra-filtered milk distributed in Canada. From this acquisition, the company focused on diversifying its portfolio beyond its iconic sodas. Despite facing challenges with the brand's reputation in 2019, value-added dairy has been an expanding sector in the U.S. and one that could help Coca-Cola going forward.

Partnerships, Collaborations and Agreements:

Jul-2020: Coca-Cola entered into a partnership with Boardwalk Frozen Treats, a sales, marketing, manufacturing, and distribution partner for national ice cream brands. The product offers seven flavors: vanilla, chocolate, cookies & cream, chocolate peanut butter, double fudge brownie, java chip, and mint chip.

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