Lactose-free Butter Market

Lactose Free Butter Market Growth Outlook (2023 to 2033)

The global lactose-free butter market is valued at US$ 784.8 million in 2023 and is projected to reach US$ 1.8 billion by 2033. Worldwide lactose free butter demand is forecasted to increase rapidly at a CAGR of 9% over the next 10 years.

Lactose-free dairy products such as lactose free milk and lactose-free butter are in high demand due to the increasing prevalence of lactose intolerance worldwide. In light of this, a high increase in lactose-free butter demand is anticipated during the forecast period. The rising popularity of veganism and the ability of some populations to spend on lactose-free products are expected to boost the growth of the market for lactose-free butter during the next 10 years.

Butter that is lactose-free has extremely little to no lactose in it and is made from lactose-free cream. The majority of lactose-free butter is used for retail purposes, however, some producers are also producing lactose-free butter for household use. Due to the rising demand for vegan and lactose-free food products, many foodservice operators in Western Europe and Latin America have switched to lactose-free butter in the bakery industry.

Demand for lactose-free butter is expected to grow rapidly during the forecast period as consumers favour clean-label foods including organic, gluten-free, and non-GMO products. As a result, a few producers are now offering organic lactose-free butter made from organic cream.

Over the projection period, consumption of spreadable lactose-free butter is anticipated to increase rapidly. This may be due to its low fat & cholesterol content, ability to keep a soft texture even at very low temperatures, and ease of spreading. Top producers of lactose-free butter are implementing new and updated technologies to enhance their production globally due to a surge in demand. In the coming 10 years, this is probably going to have a favourable effect on lactose-free butter sales.

• In January 2020: The Coca-Cola Company bought the whole remaining ownership in Fairlife LLC from its consortium Select Milk Producers to fulfil the rapidly evolving needs of consumers seeking products without lactose.

Report Attributes	Details
Lactose-free Butter Market Size (2023E)	US$ 784.8 Million
Forecasted Market Value (2033F)	US$ 1.8 Billion
Global Market Growth Rate (2023 to 2033)	9% CAGR
Leading Regional Market	North America
Key Companies Profiled	Agropur Dairy Cooperative Challenge Dairy Parmalat S.p.A Uelzena Ingredients CAPSA Food Valio Ltd. Butterfields Butter LLC Miyoko’s Creamery Molkerei Biedermann AG The Kraft Heinz Company The Hain Celestial Group, Inc. Cargill Inc. Corbion Inc. Kerry Group PLC Ingredion Incorporated Chr Hasen A/S Dupont Kellogg Company General Mills, Inc.

What are the Important Trends in the Lactose-free Butter Market?

“Rising Number of Lactose-intolerance Consumers”

Although it is a common medical condition, lactose intolerance is uncommon in children under the age of five. Young adults and teenagers are most often affected by it.

• The National Center for Biotechnology Information estimates that 65% of people worldwide struggle with lactose intolerance.
• The severity of their condition varies. It affects more than 90% of adults in East Asian societies. Additionally, people of Arab, West African, Jewish, Greek, and Italian origin commonly suffer from lactose intolerance. This shows that there are several growth opportunities in the lactose-free butter market.

Sales of lactose-free products have been surging dramatically in both Europe and North America in recent years due to the increasing number of consumers who self-diagnose their lactose intolerance problem. Also, consumers' health concerns and efforts in self-diagnosis of lactose intolerance are increasing in the Asia Pacific region, which is further boosting the regional demand for lactose-free products.

“Rapid Developments in Dairy-free Butter Products”

The health advantages that the consumption of lactose-free dairy products now offers have increased as a result of technological advancements. The claims made for products containing dairy-free butter, such as low/no/reduced sugar and gluten-free dairy items, aid in growing the consumer base. One example of an invention in the field of digestive health is lactose-free milk and yoghurt with probiotics.

• Danone Company S.A.'s Activia probiotic yoghurt contains probiotics that promote intestinal health. Probiotics are microorganisms that have been extensively investigated and shown to help with health advantages beyond basic nutrition if they are ingested at appropriate levels.

By promoting easy digestion, lower fat & sugar content, and developing a variety of products by combining lactose-free substances with nutritious components, such as proteins, vitamins, and fibers, dairy manufacturers are taking advantage of this trend to increase their consumer base and give consumers a wide range of lactose-free food options. Globally, customers are becoming more inclined to choose healthier foods such as lactose-free cheese, peanut butter lactose-free, and more.

• The Coca-Cola Company (United States) provides Omega-3 milk without lactose, which enhances brain function, under the Fairlife LLC brand.

What’s Affecting the Profitability of Lactose-free Butter Manufacturers?

“Plant-based Butter to Challenge Revenue Growth of Lactose-free Butter Brands”

Lactose-free items are anticipated to face fierce competition from the demand for plant-based dietary substitutes. One of the main factors hindering the growth of the market for lactose-free butter is the desire for plant-based butter among those who are lactose intolerant. This can be due to the plant-based butter's increasing availability and low price. Additionally, more customers are likely to consume plant-based butter because it has a higher nutritional value than lactose-free butter.

Food made of plants contains no cholesterol. Similarly, plant-based butter has a high concentration of mono-saturated fats that promote heart health, help people maintain a healthy weight, and regulate blood sugar levels. Thus, the demand for lactose-free butter is likely to face difficulties as consumers may also prefer plant-based substitutes.

“High Cost of Lactose-free Butter Due to Complex Production Process”

Milk must be pasteurized using the ultra-high temperature (UHT) method to produce lactose-free milk. This approach extends the shelf life of milk and improves the texture while producing lactose-free milk.

Lactase enzymes are added to regular milk to transform it into lactose-free milk by dissolving the complex lactose disaccharide into 2 simple sugars: glucose and galactose (monosaccharides). The cost of dairy products without lactose such as lactose-free butter increases as a result of the complex process of producing lactose-free milk. Thus, due to the high price of lactose-free butter, it is less consumed in developing or poor economies across the world.

Will the Lactose-free Butter Space Be an Opportunistic Business for Start-up Companies?

“New Companies Can Capitalize on Surging Trend of Consuming Healthy Food Products”

The lactose-free butter market presents potential opportunities for newcomers to enter and capitalize on the growing demand for dairy alternatives. Here are some potential benefits:

Growing Demand for Lactose-free Products: With the increasing prevalence of lactose intolerance and the growing awareness about lactose-free products, there is a rising demand for lactose-free butter. Consumers who are lactose intolerant or have a sensitivity to lactose are actively seeking dairy alternatives that can provide similar taste and functionality as traditional butter. New manufacturers can tap into this growing demand and offer innovative lactose-free butter products to cater to this niche market.

Health-conscious Consumers: Consumers are becoming more health-conscious and are looking for food options that align with their dietary preferences and restrictions. Lactose-free butter is considered a healthier option for individuals who are lactose intolerant or those who prefer dairy-free alternatives.

Innovation & Customization: New manufacturers can experiment with different non-dairy sources such as plant-based oils, nuts, or seeds to create unique lactose-free butter formulations with different flavors, textures, and nutritional profiles. Customized lactose-free butter that caters to specific dietary preferences, such as gluten-free, vegan, or organic, can also be developed to target specific consumer segments.

Market Expansion: Lactose-free butter consumption is not limited to individuals with lactose intolerance. It also appeals to consumers who are looking for dairy alternatives for various reasons, including ethical, environmental, or lifestyle choices. As such, the market has the potential to expand beyond traditional lactose-intolerant consumers. New producers can capitalize on this opportunity and develop lactose-free butter that caters to a wider audience, thereby expanding their market reach.

Country-wise Analysis

Why is Lactose-free Butter Widely Consumed in the United States?

“High Awareness of Lactose Intolerance Medical Condition”

Demand for lactose-free butter is growing as the population of Americans who are lactose intolerant is rising. Unlike consumers in other parts of the world who are ignorant of the disease they are suffering from, Americans are very aware of the lactose intolerance issue. As a result, lactose-free butter is more in demand in the United States.

A tendency of switching from dairy to lactose-free butter and other substitutes is seen as a precaution by the customers themselves due to the growing health consciousness. This is explained by the fact that a sizable proportion of the populace already experiences lactose intolerance.

Why is Germany a Leading Market for Lactose-free Butter in Europe?

“Higher Production Volumes Leading to Cost-effective Lactose-free Butter”

Currently, Germany is the industry leader in the manufacturing of lactose-free dairy products in Europe. To meet the need of the country's health-conscious population, several lactose-free butter companies are launching innovative product lines and attempting to produce lactose-free butter at affordable rates.

The country is witnessing a notable shift in consumer demand for organic food and beverages as a result of growing public knowledge of the unethical and synthetic ingredients utilized in non-organic food items. This provides the necessary motivation for German producers to favour organic lactose-free dairy products such as dairy-free unsalted butter over non-organic dairy alternatives.

How is the Lactose-free Butter Market Expected to Develop in China?

“Change in Dietary Preference – Growing Demand for Western Bakery Food Items”

Changing consumer preferences, including the adoption of Western-style diets and cuisines, are driving the demand for lactose-free butter in China. Western-style baked goods, such as pastries, cookies, and cakes, which often use butter as a key ingredient, are gaining popularity in China, and lactose-free butter provides an alternative for consumers with lactose intolerance.

Lactose-free butter is becoming more widely available in China, as suppliers of lactose-free butter expand their distribution networks and increase marketing efforts to promote lactose-free products.

Category-wise Analysis

Which Distribution Channels are Preferred for Lactose-free Butter?

“Online Buying Gaining Rapid Traction in This Market”

Supermarkets and hypermarkets are currently leading distribution channels for lactose-free butter, as they offer a wide range of dairy-free products, including lactose-free butter, and have a large customer base. Many consumers prefer to purchase lactose-free butter from supermarkets and hypermarkets due to the easy accessibility of products.

e-Commerce and online platforms have been rapidly growing in popularity, and many consumers are expected to purchase lactose-free butter online during the forecast period. Online platforms provide convenience, ease of access, and a wide range of options for consumers to purchase lactose-free butter from the comfort of their homes.

Competitive Landscape

Key suppliers of lactose-free butter are focusing on regional expansion to gain a large consumer base. The growing demand for lactose-free butter among consumers who are lactose intolerant presents a chance for product development in regions with strong demand and for market expansion in regions where supply is still limited.

Key Segments of Lactose-free Butter Industry Research

• By Product :

  • Spreadable
  • Non-spreadable

• By Type :

  • Salted
  • Unsalted

• By Nature :

  • Organic
  • Conventional

• By Source :

  • Cream
  • Milk
  • Skimmed
  • Whole

• By Application :

  • Household
  • Commercial

• By Distribution Channel :

  • Supermarkets/Hypermarkets
  • Specialty Stores
  • Convenience Stores
  • Online

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • MEA