Lactose Free Food Global Market Opportunities and Strategies to 2033

This report describes and explains the lactose free food market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global lactose free food market reached a value of nearly $15.2 billion in 2023, having grown at a compound annual growth rate (CAGR) of 7.5% since 2018. The market is expected to grow from $15.2 billion in 2023 to $26 billion in 2028 at a rate of 11.3%. The market is then expected to grow at a CAGR of 11.4% from 2028 and reach $44.5 billion in 2033.

Growth in the historic period resulted from the rising prevalence of lactose intolerance, rising consumption of healthy products, rise in disposable income and increasing penetration of social media platforms. Factors that negatively affected growth in the historic period were stringent regulations.

Going forward, rising health-conscious consumer and lifestyles, rising prevalence of chronic diseases and global population growth and urbanization will drive the growth. Factor that could hinder the growth of the lactose free food market in the future include high cost of production of lactose-free items.

The lactose free food market is segmented by type into lactose free products and lactose-reduced products. The lactose free products market was the largest segment of the lactose free food market segmented by type, accounting for 70.4% or $10.7 billion of the total in 2023. Going forward, the lactose free products segment is expected to be the fastest growing segment in the lactose free food market segmented by type, at a CAGR of 11.6% during 2023-2028.

The lactose free food market is segmented by technology into enzymatic hydrolysis, chromatographic separation, acid hydrolysis and membrane reactor. The enzymatic hydrolysis market was the largest segment of the lactose free food market segmented by technology, accounting for 65% or $27.8 billion of the total in 2023. Going forward, the membrane reactor segment is expected to be the fastest growing segment in the lactose free food market segmented by technology, at a CAGR of 13.1% during 2023-2028.

The lactose free food market is segmented by distribution channel into supermarkets/hypermarkets, convenience stores, online stores and other distribution channels. The supermarkets/hypermarkets market was the largest segment of the lactose free food market segmented by distribution channel, accounting for 43.2% or $11.3 billion of the total in 2023. Going forward, the online stores segment is expected to be the fastest growing segment in the lactose free food market segmented by distribution channel, at a CAGR of 14.4% during 2023-2028.

The lactose free food market is segmented by application into milk, cheese, yogurt, ice-cream, non-dairy products and other applications. The milk market was the largest segment of the lactose free food market segmented by application, accounting for 61.3% or $9.3 billion of the total in 2023. Going forward, the cheese segment is expected to be the fastest growing segment in the lactose free food market segmented by application, at a CAGR of 13% during 2023-2028.

North America was the largest region in the lactose free food market, accounting for 34% or $ 5.2 billion of the total in 2023. It was followed by Asia Pacific, Western Europe and then the other regions. Going forward, the fastest-growing regions in the lactose free food market will be Western Europe and Asia Pacific where growth will be at CAGRs of 12.6% and 12.5% respectively. These will be followed by Eastern Europe and South America where the markets are expected to grow at CAGRs of 11.4% and 7.5% respectively.

The global lactose free food market is highly concentrated, with a few large players operating in the market. The top ten competitors in the market made up to 50.8% of the total market in 2022. The market concentration can be attributed to the presence of large number of players in different geographies. Prominent players are acquiring the products and entering into partnerships with the other companies to consolidate their market positions across the globe, while others are distributing products. Arla Foods Limited was the largest competitor with a 10.9% share of the market, followed by Lactalis International with 7.8%, Danone S.A with 7%, Nestle S.A. with 5.8%, The Coca-Cola Company with 5.2%, Land O Lakes, Inc with 4.1%, Amul with 3.2%, Emmi AG with 2.8%, Valio Ltd with 2.2% and Dairy Farmers of America with 1.8%.

The top opportunities in the lactose free food market segmented by type will arise in the lactose-free products segment, which will gain $18.5 billion of global annual sales by 2028. The top opportunities in the lactose free food market segmented by distribution channel will arise in the supermarkets/hypermarkets segment, which will gain $11.3 billion of global annual sales by 2028. The top opportunities in the lactose free food market segmented by application will arise in the milk segment, which will gain $16.2 billion of global annual sales by 2028. The top opportunities in the lactose free food market segmented by technology will arise in the enzymatic hydrolysis segment, which will gain $16.6 billion of global annual sales by 2028. The lactose free food market size will gain the most in the USA at $ 2.4 billion.

Market-trend-based strategies for the lactose free food market include launch of advanced nanofiltration technology to create lactose-free food products, strategic partnerships and collaborations to drive innovation in the market, innovative product launches with focus on reducing sugar content, focus on enzyme technology to facilitate more efficient lactose-free dairy production and innovative lactose-free Greek yogurt meeting the growing demand for healthier alternatives.

Player-adopted strategies in the lactose free food market include strengthening business capabilities through new product launches, strengthening operational capabilities through strategic partnerships and expanding business through new facility expansions. 

To take advantage of the opportunities, the analyst recommends the lactose free food companies to focus on advanced nanofiltration technology, focus on innovation for sugar reduction, focus on enzyme technology for efficient production, focus on product innovations such as lactose-free greek yogurt, focus on milk and yogurt segments, expand in emerging markets, continue to focus on developed markets, focus on strategic partnerships, focus on online stores and supermarkets/hypermarkets segments, provide competitively priced offerings, participate in trade shows and events, focus on strategic promotions and focus on tailored solutions for end-users.