Lactose free dairy is booming—here’s why that’s good for business
The global lactose free dairy market is expanding fast, with sales projected to grow 25%, from €13 billion in 2023 to €17 billion by 2028. While Western Europe and North America remain the largest markets, the fastest growth is expected in the Middle East, Africa, and Asia-Pacific (APAC), where dairy consumption is rising.
“Lactose free drinking milk has led the category for years, and now yoghurt and milk are growing fastest, each projected to expand by around 6% annually through 2028,” says Timo Pajari, Senior Vice President, BU Powders, at Valio.
For dairy producers, this presents strong business opportunities, particularly in milk and yoghurt, where premium positioning is driving value growth.
Why more people are choosing lactose free dairy
The rise of lactose free dairy isn’t just about avoiding discomfort—it’s about feeling better while enjoying real dairy. Today’s consumers expect products that deliver on taste, health, and convenience, and lactose free dairy checks all those boxes.
Better digestion, better well-being
More people are choosing foods that support gut health and overall wellness.
Great taste, no compromise
Advances in lactose free technology have improved both the taste and texture of products, making them as enjoyable as regular dairy—or even better.
Naturally rich in nutrients
Dairy provides calcium, protein, and essential vitamins, supporting overall health and well-being.
More variety, more options
With new lactose free dairy launches increasing every year, consumers have more choices than ever before.
Lactose free milk offers a premium growth opportunity
Lactose free milk is the largest and fastest-growing segment in the global lactose free dairy market, with sales projected to reach €8 billion by 2028 (+34%). Beyond being an alternative, it is a key driver of retail value and new product activity (NPD). While the standard milk market is stagnating or even declining in some regions, lactose free milk continues to expand, with product launches growing at an 11% CAGR (2021–2024).
“Lactose free milk is growing faster than standard milk, as consumers actively seek better options. This shift is about more than avoiding lactose—it’s about added value, functionality, and taste,” says Pajari.
For manufacturers, this is an opportunity to move beyond price competition. Lactose free milk allows brands to compete at a premium level, offering a strong alternative to dairy-free options. Growth is particularly strong in Western Europe (+13%), with even greater potential in emerging markets like the Middle East, Eastern Europe, and APAC.
Unlike hydrolyzed lactose free milk, which has a sweeter taste, Valio’s filtration-based technology preserves the fresh, natural flavor of milk—a key differentiator for brands looking to stand out. Valio’s Fast Track™ for milk makes it easier than ever for dairies to launch premium lactose free milk efficiently, with minimal investment.
Lactose free yoghurt is rising fast
Lactose free yoghurt is expanding even faster than milk, set to reach €2 billion by 2028 (+38%). Demand for digestive health, high-protein snacks, and better-for-you indulgence is fueling its rapid growth.
“Yoghurt is one of the most exciting categories right now because it’s where health meets taste. People want functional benefits, but they’re not willing to compromise on taste or texture,” explains Pajari.
For dairy brands, speed to market matters. Solutions like Valio Fast Track™ for yoghurt help manufacturers quickly launch a high-quality lactose free Greek-style yoghurt with 30% less sugar without complex new processes.
Business opportunities in digestive wellness and boosted nutrition
Lactose free dairy is proving to be the natural choice for many consumers. It offers the best of both worlds—all the benefits of dairy, without the digestive discomfort.
For dairy manufacturers, this means:
Premium positioning
Consumers view lactose free dairy as high quality and are willing to pay more for it.
Faster market entry
Technology like Valio’s Fast Track™ solutions makes launching lactose free milk and yoghurt easier than ever.
New market potential
Growth in Asia and the Middle East is outpacing supply, making these key regions for expansion.
How dairy producers can tap into the market
With 40+ years of lactose free expertise, Valio offers the world’s largest range of lactose free consumer products, providing unique market insight for manufacturers. From high-quality ingredients to Fast Track™ solutions, Valio helps dairies quickly launch premium lactose free products and meet rising demand.
Interested in unlocking new business opportunities with lactose free dairy? Fill out the form below to connect with our experts.
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Valio FAST TRACK™ solution
Valio Fast Track™ solutions for milk and yoghurt allow you to quickly launch premium lactose free products that meet consumer demands for superior taste, nutritional benefits, and digestive wellness — all without heavy upfront investments.
Interested in unlocking new business opportunities with lactose free dairy?
Fill out the form below to connect with our experts.
