Global launch numbers for lactose-free dairy products more than tripled in the five-year period to the beginning of 2012, according to Innova Market Insights data. The share of total tracked dairy introductions featuring a lactose-free positioning rose from less than 2.5 percent to 4.5 percent over the same period. Levels of interest and consequently new product activity have been particularly high in the US and Western Europe, which saw products marketed as lactose-free account for 10 percent and 6 percent of total dairy launches, respectively, in the 12 months to the end of March 2012.
Interest in dairy alternatives, improved labeling, growing awareness of the potential problems associated with lactose intolerance and technological developments that have allowed the production of better-tasting products have combined to boost the availability of lactose-free dairy products in recent years. According to LuAnn Williams, Research Manager for Innova Market Insights, the sector is now trying to emerge from a specialist niche positioning to increase its appeal to a wider audience in the mass market.
The highest share of lactose-free products tends to be in sectors where there are already established dairy alternatives, particularly drinks, where the share of products marketed as lactose free was over 30 percent. Creamers, many of which already have non-dairy ingredients, such as vegetable fats, can also relatively easily be formulated as lactose free, and this type of product accounted for over 9 percent of introductions in the sub-sector. In more traditional dairy markets, such as milk drinks, yogurt and cheese, penetration of lactose-free launches tended to be between 2 percent and 4 percent.
There have been specialist lactose-free ranges available for some time, but until recently these tended to focus more on the specialist dietetic market. Recent product activity recorded by Innova Market Insights indicates that some of these brands are now moving more mainstream and extending into new product sectors both within and outside the dairy category. These include OBM Omira’s Minus L range in Germany, Arla’s Lactofree in the UK, Valio’s Zero Lactose in Scandinavia and McNeil’s Lactaid in the US. The development of own-brand ranges by the leading retailers has also driven awareness in the market, with most of the major multiple chains, including discounters, in many countries now having their own free-from ranges, including lactose-free options, which are rapidly increasing in number and scope.
Perhaps the most significant in terms of market development, however, has been the arrival of lactose-free options from mainstream brands. In the US, General Mills’ market-leading Yoplait yogurt brand was extended with four Lactose-Free variants in early 2012, while Danone’s market-leading Activia yogurt brand has now been extended with a lactose-free option in a number of European markets, including Germany and Scandinavia. Likewise, in New Zealand, the Anchor dairy brand has been extended in the milks market, with two lactose-free alternatives under the Zero Lacto Blue and Zero Lacto Trim ranges.