Lactose Free Butter Market

Market Overview

The global lactose-free butter market size was valued at USD 291.72 million in 2022. It is estimated to reach USD 531.63 million by 2031, growing at a CAGR of 6.9% during the forecast period (2023–2031).

Lactase is a type of enzyme produced generally in the body to break down lactose present in dairy or other similar products. The inability to digest lactose from milk or dairy products is called lactose intolerance. This intolerance results in gas, bloating, and abdominal pain. Some types of food intolerances, including lactose intolerance, are treatable. Lactose-free milk is a simple alternative that may alleviate many of these unpleasant symptoms. Lactose-free milk contains the same taste, texture, and nutrient profile as regular milk. It is conveniently usable in the same manner.

Lactose-free butter is a product of lactose-free milk. Like regular milk, lactose-free dairy alternatives are a great source of protein. They can provide all essential nutrients in traditional dairy products, like calcium and vitamins, to those that cannot digest lactose. Lactose-free milk is produced by adding lactase to regular milk. In recent years, lactose-free dairy's quality and product variety has increased significantly, giving consumers more alternatives for lactose-free products.

Highlights

• Household dominates the application segment
• Supermarkets and hypermarkets dominate the distribution channel segment
• North America is the highest shareholder in the global market

Market Dynamics

Global Lactose-Free Butter Market Drivers

Growing Prevalence of Lactose Intolerance and Availability of Variable Tastes

Lactose malabsorption is seen in most countries, with variations in its types between regions. Primary adult lactase deficiency is common worldwide at around 70%. Some countries, such as Canada and Australia, have significant variations in lactose malabsorption between the native population and the other ethnic groups in the region. In the U.S. and Europe, the sales of lactose-free products have doubled due to the increase in self-diagnosed cases of lactose intolerance. As the lactose-intolerant population grows, the demand for lactose-free dairy items also increases, raising the demand for lactose-free butter.

Additionally, consumers always prefer trying new and better tastes in the food category. Manufacturers are giving out lactose-free butter in various flavors. Opportunities in the market can be seen in natural and organic lactose-free milk products such as cheese, butter, and buttermilk. Innovation in these products is expected to benefit the growth of the lactose-free butter market. Moreover, market players can also introduce flavored lactose-free butter such as vanilla, chocolate, and strawberry, considering consumer demand.

Rise in Consumer Preference for Lactose-Free Dairy Products

Lactose-free milk contains added natural enzyme lactase, which breaks down milk-sugar lactose into more easily digestible sugars, glucose, and galactose, which makes it easier to digest. Lactose-free butter contains the same amount of calcium, vitamin A, vitamin D, and protein as regular milk and dairy products. The lactose-intolerant population prefers it as a healthy alternative to conventional butter products.

Global Lactose-Free Butter Market Restraint

Availability of Alternative Products

Non-dairy products such as soymilk, hemp milk, and other plant-based milk are considered alternatives for lactose-free milk. Consumers have been avoiding dairy products for the past few years, which is why dairy-based lactose-free products witness declining in their consumption or production. Hence, the availability of various plant-based alternatives for lactose-free butter poses a potential threat to market growth.

Global Lactose-Free Butter Market Opportunities

Rising Consumption of Lactose-Free Butter in Developing Economies

Countries in Asia-Pacific and LAMEA have gone through substantial economic growth over the past few years. As a result, the number of working people has increased. Consumers' spending has improved owing to the increase in income. Lactose-free butter is high in cost compared to conventional butter products. With increased disposable income, consumers can afford this product as an alternative to traditional butter. Moreover, developing economies are adapting many strategies in their markets, which is helping to boost the overall economy, which causes emerging market players to enter the market.

Furthermore, customers have more options when more market participants enter the market, attracting more customers to these products. In addition, in developing economies, NGOs, social groups, hospitals, and large companies spread awareness about healthy products and the benefits of a healthy lifestyle which further helps consumers choose healthy alternatives to their food lifestyle. Thus, the rise in consumption of lactose-free butter in developing economies creates tremendous opportunities for the market players to grow.

Regional Analysis

Based on region, the global lactose-free butter market is bifurcated into North America, Europe, Asia-Pacific. and LAMEA.

North America Dominates the Global Market

North America is the most significant global lactose-free butter market shareholder and is anticipated to exhibit a CAGR of 5.7% during the forecast period. North America comprises the U.S., Canada, and Mexico, which are the major countries contributing to its economy. The growth of the North American lactose-free butter market is driven by an increase in demand for natural food products, owing to a rise in health consciousness among consumers. Contrary to consumers in Asia-Pacific and other parts of the world unaware of the ailment they are suffering from, consumers in the North American region, particularly those in the United States and Canada, are quite aware of lactose intolerance. As a result, the demand for lactose-free butter in North America is rising, fueling market expansion. In addition, lactose intolerance affects up to 50 million Americans, which is expected to increase the demand for lactose-free butter across North America. Increasingly individuals are choosing gluten-free, sugar-free, and lactose-free products due to the rise in the prevalence of diseases brought on by lactose intolerance, which is boosting the market's expansion in North America.

Europe is projected to exhibit a CAGR of 6.4% over the forecast period. Europe's market for lactose-free butter focused primarily on the UK, France, the Netherlands, Germany, and Spain. These countries being the developed countries in the region and having some of the highest GDPs in the world, are leading the European market in strengthening the European economy. The occurrence of lactose intolerance allergies has increased significantly over the past few years, which is anticipated to drive the growth of the lactose-free butter market during the forecast period. In addition, lactose-free butter is extensively made with natural ingredients, as they are aimed at providing health benefits and are also considered natural products. A shift in consumer preference toward natural food sources and limited intake of synthetic compounds in diet fuels the need for natural products, thereby supplementing the lactose-free market growth in Europe. In addition, the rise in several small and medium enterprises in the region provides consumers various options for these products. These factors are predicted to fuel the market expansion for lactose-free butter.

Asia-Pacific is expected to grow significantly over the forecast period. Increased income, lifestyle changes, and consumption of natural dairy products drive the growth of the Asia-Pacific market for lactose-free butter. Lactose-free butter is mainly produced by natural methods and using natural ingredients. Moreover, these butter are costlier than conventional butter products, so increased disposable income makes it affordable for consumers to use in food preparations. These factors have increased the demand for lactose-free dairy products by increasing the use of lactose-free butter. In addition, spreading awareness about lactose intolerance through NGOs, doctors, social organizations, and online platforms has made consumers aware of lactose intolerance. The rise in awareness about health issues caused by synthetic preservatives has encouraged consumers to prefer products made with natural preservatives and lactose-free. China, India, South Korea, Japan, and Australia are some of the major countries in the Asia-Pacific. These countries are developing markets and emerging economies hence driving regional market growth.

The global lactose-free butter market for LAMEA includes Brazil, South Africa, and the UAE, as these countries are having highest penetration of the lactose-free butter market. Lactose-free is one of the leading segments for consumers choosing healthy products free from certain ingredients. In addition, the demand for dairy food and beverages made with lactose-free ingredients plays a crucial role in the market growth in the region. LAMEA is considered one of the most sensitive regions, as many diseases are common. The occurrence of lactose intolerance allergies has increased significantly over the past few years, which is attributed to driving the growth of the lactose-free butter market during the forecast period.

Segmental Analysis

The global lactose-free butter market is segmented by application and distribution channels.

Based on application, the global lactose-free butter market is divided into household and commercial. 

The household segment is responsible for the largest market share and is anticipated to grow at a CAGR of 7.4% over the forecast period. Household applications mean the use of butter in small households and homes. The use of lactose-free butter is seen in terms of butter spreads and plain butter in daily food consumption in household applications. The rise in incidences of lactose intolerance has led to increased demand for lactose-free butter. In addition, the expansion in household sales of lactates and related substances is anticipated in most industrialized and developing nations due to rising per capita dairy product spending. This surge in demand for lactose-free milk and butter will provide significant growth opportunities for dairy product manufacturers during the forecast period. This is expected to boost the consumption and sales of lactose-free butter across various regional markets.

Commercial applications of lactose-free are found in hotels, restaurants, catering services, hostels, schools, colleges, and other places. Schools and colleges provide meals in their lunch timings, so they prefer healthy food. Lactose-free butter is considered a healthy alternative to conventional butter; hence its demand is increasing. The development of new options for lactose-free dairy products in commercial settings like hotels is projected to be aided by a mature market for such products and a well-informed consumer base. Moreover, the prevalence of lactose intolerance in the millennial population is increasing. Millennials are aware of lactose-free alternatives through aggressive marketing by manufacturers or through internet platforms. Hence millennials prefer lactose-free products, including dairy products such as butter, milk, and creams. This factor is driving the demand for lactose-free solutions in the butter segment.

Based on distribution channels, the global lactose-free butter market is segmented into supermarkets and hypermarkets, specialty stores, online retail stores, and others. 

The specialty stores segment owns the highest market share and is expected to exhibit a CAGR of 6.1% during the forecast period. Specialty stores offer interesting products, which may attract buyers by providing a wide range of differentiated products. Consumers purchase lactose-free products from specialty stores to benefit from recommendations from its knowledgeable staff. In addition, the market for specialty stores is driven by a rise in the affluent population in emerging countries such as China, Japan, Australia, and Gulf. The ability to physically choose and compare products attracts consumers toward specialty stores.

The supermarket is a large shopping center where customers purchase products arranged systematically on shelves. Similar products from different brands are placed nearby, which helps buyers compare them so they can buy the best one among those products. In contrast, a hypermarket is a large shopping store divided into small departmental stores, thus usually giant than supermarkets. A supermarket/hypermarket provides ease of purchase to its customers. It offers different types of lactose-free butter from various brands with unique features and with a wide range of products in each brand. The rise in retail sales channel penetration in developing markets has created new avenues for market growth.

Recent Developments

• March 2023- Reese's introduced dairy-free peanut butter cups made from plant-based ingredients. The brand-new Reese's plant-based peanut butter cups contain the classic peanut butter filling in all their goods and are covered in chocolate made from oats and rice.

• February 2023- IKEA revealed plans to "remove or replace" dairy products from its stores to minimize its carbon footprint. The Swedish retailer's publication of the 2022 Sustainability Report aimed to examine how the company can become climate-positive by 2030. It examined five essential areas: energy, air, water, food, and waste.