Lactose Market Size, Share, Growth Analysis, By Source (Yeast, Fungi), By Form (Liquid, Dry), By Application (Food & Beverages, Pharmaceutical Products & Dietary Supplements), By Region - Industry Forecast 2024-2031

Lactose Market size was valued at USD 2.22 billion in 2022 and is poised to grow from USD 2.3 billion in 2023 to USD 3.22 billion by 2031, growing at a CAGR of 3.8% in the forecast period (2024-2031).

Lactose, a valuable byproduct of cheese production derived from liquid whey, plays a crucial role in various sectors, notably in food and pharmaceuticals. Its versatility is evident as it finds applications across the food industry, particularly in creams, breads, and confectioneries, as well as in animal feed, where it serves as a key ingredient for pig nutrition. The pharmaceutical sector also leverages lactose extensively, utilizing it as an excipient and filler in drug formulations. The surging demand from rapidly developing markets, particularly in the pharmaceutical space, is propelling global lactose consumption. Additionally, the rising preference for food-grade and infant-grade lactose in major dairy-producing nations further bolsters the industry's growth trajectory. This increased focus on lactose within food processing, coupled with its pivotal role in the formulation of infant formulas, underscores its importance in the market. Overall, the lactose market is witnessing robust growth, driven by its multifunctional applications and the escalating demand across critical industries, positioning it as a vital ingredient in the global dairy landscape.

Top-down and bottom-up approaches were used to estimate and validate the size of the Lactose market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Lactose Market Segmental Analysis

Global Lactose Market is segmented by Source, Form, Application, and region. Based on Source, the market is segmented into Yeast, Fungi, and Bacteria. Based on Form, the market is segmented into Liquid, and Dry. Based on Application, the market is segmented into Food & Beverages, and Pharmaceutical Products & Dietary Supplements. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.

Driver of the Lactose Market

The expansion of the lactose market is primarily driven by the surging demand for food-grade and infant-grade lactose, along with the robust growth of the pharmaceutical sector in developing nations. A notable increase in the demand for infant formula has been observed, particularly in advanced economies like the United States and several European nations. China, once heavily reliant on imported infant formula, has shifted its focus toward domestic brands following a melamine scandal in 2008. Leading companies such as Feihe and Inner Mongolia Yili Industrial Group have gained market prominence, with Feihe reporting impressive sales growth. Additionally, the pharmaceutical industry is flourishing in countries such as Brazil, China, and India, propelled by the rising prevalence of chronic diseases and government initiatives aimed at enhancing healthcare awareness. Consequently, the demand for lactose is anticipated to soar, as it plays a vital role in ensuring the compressibility and flowability of drug formulations, thereby contributing significantly to the lactose market's overall growth trajectory.

Restraints in the Lactose Market

The lactose market is facing notable restraints, primarily due to its limited supply and high production costs, which have prompted many feed manufacturers to explore alternative sweeteners like table sugar, molasses, dextrose, and maltodextrins. This shift significantly hinders market growth during the forecast period. Additionally, recent recalls of lactose-containing products, such as infant formula, have adversely affected consumer demand. For instance, in February 2022, Abbott Nutrition initiated a recall for certain powdered formulas due to potential bacterial contamination, including Salmonella, impacting products widely distributed across the U.S. and even reaching international markets. Consequently, the combination of available alternatives and rising product recalls is likely to restrict lactose market growth in the coming years.

Market Trends of the Lactose Market

The lactose market is experiencing significant growth, driven primarily by declining breastfeeding rates globally. This trend is influenced by factors such as an expanding working population and the increasing availability of breast milk substitutes. Particularly in emerging markets like China, the demand for infant formula is surging as parents seek alternatives to breastfeeding. Manufacturers are responding by developing infant formula that closely mimics breast milk, further boosting the demand for infant-grade lactose. Additionally, sustained urbanization and economic growth in developed nations, including the United States, Germany, and Japan, are expected to perpetuate low breastfeeding rates, further elevating the demand for lactose in infant nutrition.