Harness the growth in lactose free: add value to existing products or innovate new ones

February 11th 2020 Contact us

The demand for lactose free products grows rapidly, as consumers globally become increasingly aware of the relationship between lactose free dairy and digestive comfort. Driven by the digestive wellness food trend, this rapid growth offers a multitude of opportunities for food manufacturers from price premiums to developing products with concrete consumer benefits.

For the 2020 key food trends, New Nutrition business magazine lists lactose free as a key strategy with high growth opportunities inside digestive wellness. Lactose free is also evaluated having the most versatile potential to innovate and differentiate. With 70% of the world’s population being lactose intolerant to some degree, lactose free offers a multitude of possibilities for manufacturers operating in markets at different stages of awareness on lactose intolerance.

“A good way to approach a young market is to launch a base product such as lactose free milk and test the market with it. After establishing a basic market presence, lactose free offers many possibilities to add value and differentiate with better for you - or premium properties.”

Lactose free expands from dairy to other food categories

The opportunities created by demand for lactose free products are not limited to dairy industry alone. Lactose free has potential to expand to all food categories which include milk as an ingredient. The indulgence category including products such as milk chocolate, ice cream and bakery has tremendous potential for growth.

“Lactose free offers much to gain for any food manufacturer who wishes to bring clear added value products to their portfolio.”

Consumers are looking for products which will not only alleviate troublesome symptoms but combine multiple benefits for them – such as high protein content and ease of use. These kinds of benefit-bundle products give food manufacturers the ability to answer several of the current food trends. For example, with Valio’s innovative solutions you can combine lactose free, high protein and reduced sugar all into one product.

The digestive wellness trend also offers a chance for price premiums in both base products with lactose free claim as well as in indulgence, such as milk chocolate or ice cream.. Consumers looking for better-for-you foods are willing to pay for products which support gut health without compromising excellent taste, texture or nutrition.

Demand grows globally: Asia and Africa have great untapped potential

The global growth of lactose free has been remarkable: according to Mintel product launches in 2009 with some type of a lactose claim add up to 6% of all dairy launches, and now ten years later the share is already over 12%. However, there are differences in how different market areas evolve.

“Globally lactose free dairy is expected to grow 50% in value by 2024, yet the growth figures are even higher for Asia Pacific, Middle Eastern Africa and Eastern Europe regions.”Source: Euromonitor, free from lactose dairy, 2019-est 2024, value EUR y-o-o ex rates

Asia Pasific is experiencing rapid growth in demand, and lactose free baby food growth expectations are exceptionally high. In 2019, 5.2% of all dairy industry products launched in this market had some type of lactose free claim. This is no wonder, considering that in China alone, around 90% of the adult population has some degree of lactose intolerance. This combined with the fact that in Asia, many dairy industry product categories are underdeveloped, creates massive potential for food manufacturers.

The consumer benefits of lactose free are backed by science and felt immediately

The health benefits of lactose free are scientifically proven. For example, the European Food Safety Authority (EFSA) states that the only satisfactory treatment of lactose intolerance is a diet with reduced lactose content. (EFSA Journal 2010;8(9):1777) For the consumer, the positive effects of lactose free products can be felt immediately, as they eliminate the stomach discomfort that regular dairy causes. Despite of this, lactose free can prove a challenge for marketing communications especially in young markets where consumers aren’t familiar with lactose intolerance.

At Valio we believe that food manufacturers know their own market best. However, we have several decades of experience in fostering consumer awareness about lactose intolerance and how lactose free milk and products can help alleviate its symptoms. As a result, 46% of all new product launches in the consumer dairy category in Finland had some type of lactose free claim. (Mintel GNPD, Dairy, low/no/reduced lactose, 2019) Valio has pioneered product innovation and technology development in lactose free products, as well as experience from marketing communication to bring out the benefits in an approachable and understandable way.

Valio Eila® Fast Track lactose free technology solution is a shortcut to launching excellent tasting lactose free milk

One testament to Valio’s long term expertise and technical know-how is our Valio Eila® Fast Track lactose free technology solution. With it, food manufacturers can launch lactose free milk in a single year at the best without immediate capital investment – it truly lives up to its name! All of this is achieved without manufacturers having to compromise on the authentic fresh taste or nutritional value of regular milk.

Lactose free being included in the top of food trends for the new decade is a sign that its potential and benefits are getting recognised, which for me personally is highly inspiring. And not in the least because we at Valio are world pioneers in the field. For us milk truly is amazing.

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