Dairy plays a vital role in a healthy, balanced diet. Providing protein, vitamins and calcium, its benefits to children and adults are widely acknowledged. However, the symptoms associated with lactose intolerance, like abdominal pain, bloating, gas and diarrhoea can lead to people actively avoiding dairy and therefore missing out on its benefits.

Lactose-intolerant consumers are unable to break down lactose due to the body’s inability to produce any or enough of the enzyme lactase—a phenomenon affecting more than 75 percent of the world’s population. Lactose intolerance in adulthood is most prevalent in people of East Asian descent, affecting more than 90 percent of adults in that area. As a result, many lactose intolerant people are turning toward lactose-free dairy to avoid the abovementioned unpleasant symptoms.

The global lactose-free dairy market is worth €4.7 billion (US$5.11 billion) and is growing by around 8-12 percent per year, outgrowing the regular dairy segment. Meanwhile, in East and Southeast Asia the market penetration of lactose-free products is relatively low.

The Asia-Pacific market has hardly any commercially available lactose-free products for adults and only a limited selection of lactose-free milk available for children. Lactose-free cow’s milk can be found in some Asian supermarkets but it is a minority compared to soy- and rice-based milk alternatives.

However, a high market growth in lactose-free dairy is expected in this region over the next couple of years. For example, the lactose-free market in China has already grown from US$341 million in 2010 to US$828 million in 2015.

In Finland, lactose-free is mainstream and people enjoy lactose-free dairy as part of their everyday diet. China and Columbia are considered upcoming markets, where there is a high incidence of lactose intolerance. To find out what is driving the growth of lactose-free dairy in areas like China and to learn from countries like Finland, DSM commissioned a consumer survey. The survey focused on over 3,000 lactose-free dairy users living in Finland, China and Columbia, and explored behaviours and preferences for lactose-free products.

A significant proportion of existing lactose-free consumers in markets in which lactose-free dairy is not yet mainstream report being inclined to increase their consumption. For example, 77 percent of Chinese lactose-free dairy users said they are consuming more lactose-free dairy than they were three years ago.

The survey also revealed that the drivers behind lactose-free consumption in Finland are significantly different to those in emerging dairy markets such as China and Colombia. However, one common trend across all these countries is consumer perception of lactose-free dairy and its health benefits. As a matter of fact, in the surveyed countries, lactose intolerance is not the main reason why people consume lactose-free dairy—it is the health benefits that purchasers are seeking.

Lactose-free dairy is easy to digest, nutritious and has a great taste for consumers. Consumers seek dairy they can incorporate into their daily diets and choose lactose-free dairy over regular options for its health benefits. This represents the key driver for consumer preference and, as a result, market growth.

The commissioned survey highlighted several drivers that can help dairy manufacturers to catalyse market growth further and unlock dairy benefits for lactose-free dairy consumers in emerging markets, such as China.

Additional Health Benefits

Innovations that increase the potential health benefits of lactose-free dairy represent a major opportunity for market growth. For example, claims in lactose-free dairy launches with gluten-free, low/no/reduced sugar claims have doubled from 2010-2014.

Dairy manufacturers can make the most of this trend by promoting lower fat and sugar content, easy digestion, and creating variety by mixing lactose-free with healthy ingredients, such as proteins, vitamins or fibres to provide consumers with a wide range of choice.

Extended Product Lines

Today’s consumers want more product varieties such as flavoured milk and yogurts, cheese and spread or reduced-sugar products to fuel their appetite for lactose-free dairy. The survey revealed that the successful lactose-free category in the Finnish dairy market is very innovative. From new techniques to new products, innovation has enabled this mature and successful market to significantly evolve.

For new and current players in the industry, a great emphasis is put on the constant need for innovation by offering new and diverse products or a broader product range. This is already happening in the Asia Pacific region, where a wide range of lactose-free dairy products was launched throughout 2016, including different types of milk, yogurt and cheese.

Increasing Channels For Products

Grocery stores and supermarkets are not the only channels— by identifying new selling platforms, manufacturers can connect with new audiences, expand their customer base, as well as cater to existing customers.

Consumer Education

Promoting and educating consumers on the health benefits of lactose-free dairy has also been identified as a key for market success. This can be achieved via social media, or even by collaborating with healthcare professionals who can play a role in triggering the use of lactose-free dairy.

Eye-Catching Packaging

Having a focus on informative and engaging packaging can also help emphasise lactose-free benefits. Implementing these techniques in emerging and growing lactose-free dairy markets can help manufacturers to make the most of these opportunities.

Lactase preparations have been widely used to produce low lactose and lactose-free products for decades. When added to dairy products, these enzymes break down lactose almost completely: lactose is ‘pre-digested’ into glucose and galactose, just like lactase in the human body would do.

As a result, manufacturers are able to produce low lactose or lactose-free dairy products with the optimum nutritional profile suitable for all consumers, not just those that are lactose intolerant. Since the initial usage of lactase in low lactose products, the required functionalities and benefits of lactase enzymes have evolved. As the low lactose dairy market continues to grow, dairy producers are looking to extend shelf-life.

Although lactose-free options are widely available, they can often fail to deliver the desired taste throughout the product shelf-life. To avoid these negative outcomes and reduce production challenges, lactose-free dairy manufacturers need an innovative, high-quality lactase enzyme.

Taste has always been and will always be an important consideration for consumers and manufacturers alike. Lactose-free preparations often result in the common impurity, arylsulfatase, which converts a natural component in milk into paracresol and gives the consequent lactose-free product an undesirable off-flavour.

Also, another common impurity, invertase, alters the texture, taste and mouthfeel of sugar-reduced dairy over shelf-life. To counter these, DSM developed a lactase enzyme free from arylsulfatase and invertase that manufacturers can leverage on to produce low-sugar, lactose-free dairy products that deliver a clean taste and odour, as well as a consistent performance throughout shelf-life.

This enzyme breaks down lactose into a more digestible and sweeter form of sugar. In doing so, it unleashes the natural sweetness of milk without adding calories and allows for sugar reduction of 10-20 percent. In addition, it improves product stability over shelf-life in sugared lactose-free dairy.

[Graph 1: Relative side-activity of invertase and arylsulfatase in various commercial neutral lactase preparations.]

Tests showed a significant positive difference in the milk flavour produced with this enzyme and milk produced with alternative enzymes (Graph 1). For manufacturers looking to innovate and introduce lactose-free dairy that is healthier and contains less sugar, the lactase enzyme enables them to broaden their product range with minimised production challenges.

This label friendly solution is very easy to integrate into any production process. It is suitable for organic dairy production and is globally approved and recognised. As a result, manufacturers can increase production throughput and produce high-quality lactose-free dairy, helping them to make the most of the growing opportunities in the lactose-free dairy market, for example in the Asia Pacific region and further afield.

Creating healthy food is not only about reducing sugar or fat content in food anymore. As the survey revealed, lactose-free and its ‘health-halo’ represents significant opportunities for dairy manufacturers in emerging markets, such as China, looking to innovate as well as meet increasing consumer demand for ‘better-for-you’ products.

Understanding consumers’ preferences and innovation drivers within the sector remains key for success for lactose-free dairy manufacturers. Producing lactose-free dairy is not without its challenges. Taste, texture and other sensory attributes are main considerations and manufacturers are also seeking to reduce costs to a minimum, whilst meeting various consumer demands for a wider product range.