Self-diagnosed lactose intolerance driving lactose-free dairy sales - analyst

By Mark Astley

- Last updated on GMT

Related tags Lactose-free dairy Milk Lactose intolerance

Sales of lactose-free dairy products have doubled over the last five years, with an increase in self-diagnosed cases of lactose intolerance in the US and Europe driving $900m sales.

According to the New-Nutrition report, Lactose-Free Dairy: Opportunities, strategies and key case studies​, European demand accounted for the majority of this growth, with sales in the region tripling to $400m in the five years to 2011.

Sales in the region are expected to double between 2012 and 2016 to $700m – surpassing the “restricted”​ US market.

A lack of innovation in the US dairy industry is likely to hinder demand for lactose-free dairy products in the US, the report added.  Despite this, it is estimated to hit $650m by 2016.

Technological improvements

Author of the report, Julian Mellentin, told that growth in the lactose-free dairy market has been driven by two factors – an increase in self-diagnosed cases of lactose intolerance and technological improvements.

“The technology to manufacture lactose-free dairy products already existed, but they used to taste awful,” ​said Mellentin.

“With old lactose-free dairy product, they didn’t taste good enough. It didn’t taste nice and it was expensive and that is why it remained a niche market.”

“The other 50% in down to consumers,” ​he added.

A trend of self-diagnosed lactose intolerance in Europe and the US has significantly boosted demand for lactose-free dairy products.

Lactose intolerance is a condition where people cannot digest the lactose found in milk.

“Around 5% of people in the UK are officially lactose intolerant; however self-diagnosis has driven this up to around 15%. Self-diagnosis is a real driver for the lactose free dairy market.”

Asian demand

The report estimates that around 10% of the European population are lactose-intolerant. The figure in China could be as high as 95%, it added.

Despite this high intolerance rate, the report does not expect lactose-free dairy demand in Asia to take off for some time.

While liquid milk is a low-priced staple in western markets, it remains a premium-priced, niche market in Asia – meaning that people in the region may not be consuming enough to encounter the symptoms of lactose intolerance, although this may change in time.

“In Asia, they consume a tiny fraction of what we consume in the West. The dairy industry as a whole is still a niche market in Asia,” ​said Mellentin.

“It’s bound to happen. China has had a huge impact on the dairy sector in Asia. The lactose-free dairy category will be picked up first in China.”

The report identified McNeil’s Lactaid, Valio’s Zero Lactose and Arla Lactofree as the three most successful lactose-free bands in the world.

“There are very few mass market health products successes, but there is definitely room for a dominant lactose-free brand in every country,” ​Mellentin added.

Related topics Markets Dairy Health Check

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