Lactose-Free Dairy Market Report 2025

The lactose-free dairy market size has grown strongly in recent years. It will grow from $12.87 billion in 2024 to $13.98 billion in 2025 at a compound annual growth rate (CAGR) of 8.6%. The growth in the historic period can be attributed to health awareness, rise in lactose intolerance cases, product innovation, marketing and education campaigns, retail expansion.

The lactose-free dairy market size is expected to see strong growth in the next few years. It will grow to $19.37 billion in 2029 at a compound annual growth rate (CAGR) of 8.5%. The growth in the forecast period can be attributed to increasing health awareness, continued rise in lactose intolerance, expanding product offerings, technological advancements in production, evolving taste and texture improvement. Major trends in the forecast period include health consciousness, rise in vegan and plant-based diets, product innovation, marketing and education, retail expansion.

The increasing consumption of organic food and beverages is expected to drive the growth of the lactose-free dairy market in the future. Organic foods are produced using organic farming techniques, without the use of chemicals or other synthetic substances. Lactose-free products, which are also produced using organic methods, are preferred by consumers who prioritize organic foods. For example, in October 2023, an article published by Food Engineering, a source of news and insights for professionals in the food and beverage processing industry, reported that consumer spending on food and beverage products in the United States is projected to reach $1.77 trillion by the end of 2024, marking a 3.6% increase from the previous year. In 2023, 60% of consumers expressed a willingness to pay more for products made with familiar ingredients and sustainable practices. As a result, the rising consumption of organic foods and beverages is fueling the growth of the lactose-free dairy market.

The lactose-free dairy market is expected to benefit from the increasing expansion of the lactose-intolerant population. Lactose intolerance, a digestive disorder hindering the full digestion of lactose found in milk and dairy products, prompts a demand for dairy alternatives specifically designed to be lactose-free. With approximately 65% of the world's population being lactose intolerant, according to the National Institutes of Health (NIH), the lactose-free dairy market addresses this demand by offering products such as lactose-free milk, yogurt, cheese, and other alternatives. This market caters to individuals with lactose intolerance, varying from 50% to 80% in South Americans, 100% in American Indians, and 60% to 80% in Ashkenazi Jews and Africans in the US.

A key trend in the lactose-free dairy market is product innovations introduced by major companies to maintain their market positions. These innovations include animal-free creams and other easy-to-digest products. For example, Modern Kitchen, a US-based animal-free products company, launched the world's first animal-free cream cheese in February 2022. Utilizing precision fermentation technology, this product is made from real dairy but is lactose-free, hormone-free, and cholesterol-free, providing a sustainable and innovative option in the lactose-free dairy market.

Mmajor companies in the lactose-free dairy market are investing in new lactase enzyme solutions to gain a competitive edge. Lactase enzyme facilitates the breakdown of lactose into simpler sugars and is crucial in lactose-free dairy production. DSM-Firmenich AG, a Switzerland-based health and nutrition company, introduced Maxilact Next in May 2023, offering a 25% increase in processing speed compared to previous references. This innovation optimizes production efficiency without compromising taste, addressing the rising demand for lactose-free products globally.

In February 2024, Unilever PLC, a UK-based consumer goods company, collaborated with Perfect Day to introduce a lactose-free chocolate frozen dairy dessert under the Breyers brand. This innovative ice cream is made using Perfect Day's whey protein, which is produced through precision fermentation, eliminating the need for cows in the dairy production process. Perfect Day is a food technology startup based in the United States.

Major companies operating in the lactose-free dairy market include Dairy Farmers of America Inc., General Mills Inc., Lifeway Foods Inc., Nestle SA, Saputo Inc., Organic Valley, Prairie Farms Dairy Inc., Omira GmbH, Hiland Dairy Foods, Meggle Group, Murray Goulburn Co-Operative Co Ltd., Arla Foods AMBA, Valio Ltd., The Kroger Company, Cabot Creamery Cooperative Inc., Danone SA, Lactalis SA, Green Valley Organics LLC, Aurora Organic Dairy LLC, Land O'Lakes Inc., Parmalat SpA, Meiji Holdings Co Ltd., Agropur Cooperative, Bel Group, Agri-Mark Inc.

Europe was the largest region in the lactose-free dairy market in 2024. The regions covered in the lactose-free dairy market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the lactose-free dairy market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Lactose-free dairy refers to dairy products that retain all the nutrients found in regular dairy while excluding lactose. These products are designed for individuals with lactose intolerance, but they are generally not suitable for those with milk allergies or those adhering to a vegan or dairy-free diet.

The primary types of lactose-free dairy products include milk, cheese, yogurt, and others. Lactose-free milk specifically refers to milk from which lactose has been removed. These products are available in solid, liquid, and powder forms, and they are distributed through various channels such as hypermarkets or supermarkets, convenience stores, online platforms, and others.

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The lactose-free dairy market consists of sales of low-lactose butter, low-lactose protein powders, and kefir. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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