The market for lactose-free dairy products has doubled in the past five years – and is set for similarly impressive growth over the next five, says a new report by industry experts New Nutrition Business.
According to Lactose-Free Dairy: Opportunities, strategies and key case studies, in 2011 the lactose-free dairy category in the US and Europe hit a combined $900m (€680m) in retail sales – growth of 100% compared with 2007 levels.
The European market accounted for most of this growth, tripling in size over the period to $400m (€302m). Europe will continue to offer the best potential for lactose free dairy products, says the report.
Sales in the region are expected to almost double between 2012 and 2016 to an estimated $700m (€529m) in five years' time.
Growth in the US is anticipated to slow down in the coming half-decade, but will nonetheless expand from $500m (€378m) now to $650m (€491m) in 2016.
Julian Mellentin, director of New Nutrition Business and author of the Lactose-Free Dairy report, says: "The success of the lactose-free dairy category over the past five years has been one of the food industry's most significant yet little-noticed developments.
"Many companies have had their eye on the surge in sales of products that are 'free-from' something that some consumers perceive as negative for their health. But to-date most of them have focused their attention on gluten-free, failing to notice that this trend has also been having a major impact on the dairy category, too."
He continues: "There are manyms of people around the world who are lactose intolerant, or who believe they are, but are not happy with the alternatives to dairy currently on offer, such as soya milk. For them, the launch of real dairy products with the lactose removed has been a blessing.
"There are few markets where you can win 'a customer for life', and who is willing to pay a big premium for the right product. But this is one of them, and lactose-free dairy presents the industry with a huge opportunity to generate some big sales."
According to Mellentin, the boom in the lactose-free market has so far been driven predominantly by three brands: Arla Foods' Lactofree, Valio's Zero Lactose and McNeil's Lactaid – all of which are profiled in detailed case studies in the new report.
The next big opportunity for lactose-free is expected to be in under-developed markets such as Asia and South America, says Mellentin, who adds: "These regions are currently lagging behind Europe and the US in lactose-free dairy, but they are set for high growth in the coming years and should be watched carefully."
Source: New Nutrition Business