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Lactose Market Size, Share & Industry Analysis, By Application (Food, Feed, Pharmaceuticals, and Infant Formula {Dry-blend, and Wet-blend}), By Color (Yellow, Pale-Yellow to White, and White), By Purity (Crude, Edible, and Refined Edible), and Regional Forecast, 2024-2032

Last Updated: May 16, 2024 | Format: PDF | Report ID: FBI101774



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The global lactose market size was valued at USD 1.72 billion in 2023. The market is projected to grow from USD 1.02 billion in 2024 to USD 4.99 billion by 2032, exhibiting a CAGR of 22.0% during the forecast period.

Lactose is a byproduct of cheese. It is extracted from liquid whey during the manufacturing process. Commercially, it is one of the major dairy ingredients with numerous applications in different industries, including the food industry for manufacturing creams, bakery products, and confectioneries, and in the feed industry predominantly as an ingredient for pig feed. In addition, it is widely used in infant formula manufacturing and filler/excipient in the pharmaceutical sector.

The growing pharmaceutical sector in developing countries, along with the increasing utilization of this ingredient in food processing and manufacturing of infant formula, is resulting in the growing demand in the global market. In addition, the increasing demand for food and infant-grade lactose from major dairy-producing countries has been instrumental in propelling the growth of the market.

  • For instance, according to regional and national databases, import-export statistics, and other credible sources, the domestic consumption of lactose in China was around 390,000 MT in 2020, which accounted for roughly 40% of the total consumption globally.

A significant increase in the demand for this byproduct of cheese from developing countries is fueling its demand and adoption, further supporting the market growth during the forecast period.

The COVID-19 pandemic had a positive impact on the global market. The majority of the production was unaffected by COVID-19 as dairy foods are observed as essential foods, and dairy processing units were fully functional during the lockdown period. A significant gap between supply and demand was observed in 2020 when the production of lactose was stable. These trends, along with significant changes in currency exchange rates, are accountable for the positive impact of COVID-19 on the market. In 2023, the market witnessed a decline due to the significant price reduction. However, the market is anticipated grow over the upcoming years.

Lactose Market Trends

Declining Breastfeeding Rates Globally to Fuel Product Demand

An increase in the working population and the availability of breast milk substitutes are primarily responsible for the declining breastfeeding rates across the globe. The declining breastfeeding rate in developed and developing countries such as China is one of the critical factors increasing the demand for infant formula.  The shift toward formula feeding is driven by various factors such as lifestyle changes and maternal employment. Additionally, a growing awareness of essential mineral and vitamin fortification in lactose products is increasing the adoption of infant formula. As a result, demand for lactose products such as infant formula, baby food, and other dairy-based products has been on the rise.

  • For instance, according to the GLOBAL BREASTFEEDING SCORECARD 2022, from 2015 to 2021, 47.0% of newborns have initiated breastfeeding within one hour of birth against the target of 70.0%.

Several market players are focusing on developing infant formula which is close to breast milk. Therefore, the demand for infant-grade formula is surging globally. Similarly, with continued economic growth and urbanization around the globe, breastfeeding rates are expected to remain at low levels in developed countries, such as the U.S., Germany, and Japan, creating more demand for infant milk formula. This subsequently elevates the demand for infant-grade and supports the market growth.

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Lactose Market Growth Factors

Surging Demand for Food and Infant-grade Lactose and Expanding Pharmaceutical Sector in Developing Countries Fuels Market Growth

There has been a significant increase in the demand for infant formula, especially from developed countries, including the U.S. and key European countries. China, which has been among the largest single infant formula consumers, was historically dependent on the import of infant formula. However, China has shifted its focus toward domestic brands, which has promoted the major domestic manufacturers in the country.

  • Inner Mongolia Yili Industrial Group Co. and China Feihe are among the leaders in the infant formula market in China. China Feihe witnessed an increase in revenues by around 38% during 2019-2020, owing to strong demand for its infant formula brands from China.

However, despite the significant increase in demand and subsequent consumption of this byproduct of cheese globally, the production has not increased in that ratio. Moreover, the pharmaceutical industry has been experiencing significant growth in recent years, especially in developing nations such as Brazil, India, China, and other Asia Pacific countries. Lactose, is one of the fillers and binders that is widely used in the pharmaceutical industry for formulated tablets. The increase in the demand for pharmaceutical products is expected to contribute to the growth of the market over the analysis period. The growing prevalence of chronic diseases and increasing initiatives by the government for healthcare awareness are fueling the demand for advanced treatment options.

As a result, key companies are focusing on introducing blockbuster drug molecules to fulfill the demand, which is anticipated to foster the growth of the pharmaceutical market during the study period. This high growth in the pharmaceutical industry is projected to fuel the demand for these products, which assists in the flowability and compressibility of the drug molecules while formulating drugs.


Increasing Substitution of Lactose in Feed Manufacturing and Product Recalls to Impede Growth

The major applications of the product are in the food, feed, and pharmaceutical sectors. Moreover, due to the high cost and limited availability, the majority of the feed manufacturers are shifting toward alternate options such as dextrose, molasses, table sugar, and maltodextrins. This is a prominent factor restricting the market growth during the forecast period.

In addition, the increasing population of lactose intolerance is expected to limit the adoption of these products, thereby hampering the market growth. Moreover, a rise in the awareness of lactose intolerance poses a challenge by limiting the demand and increasing the competition from alternative products. Moreover, recent product recalls related to lactose-based products, such as infant formula, are anticipated to affect the demand for formula and subsequently hamper the market growth.

  • For instance, in February 2022, Abbott Nutrition initiated a voluntary recall of certain powdered infant formulas, including salmonella, due to potential bacterial infections. Products made at the Sturgis facility could be found across the U.S. and were likely exported to other countries as well. Hence, Canadian health officials put out a recall warning.

The availability of substitutes and increasing recalls of these products are projected to hamper the growth of the market during the analysis period.

Lactose Market Segmentation Analysis

By Purity Analysis

Refined-edible Segment Dominated Owing to Extensive Application in Pharmaceutical Industry

By purity, the market is segmented into crude grade, edible grade, and refined edible grade. The specification of the grades differs on various parameters, including total ash content, microbial count, and others.

In terms of revenue, the refined-edible grade segment dominated the global market in 2023. Refined-edible grade is widely used in pharmaceutical and infant formula manufacturing. The growing demand from pharmaceutical and infant formula industries for refined-edible grade combined with advanced product offerings, such as dry-blend infant-grade, by the industry players is responsible for the dominance of the segment in the global market. The stringent specification requirement for refined-edible grade has led to a comparatively higher price (per ton) of refined-edible grade. These factors have further contributed to the growth of the refined-edible grade segment in the global market in 2023.

The crude segment is expected to grow at a moderate CAGR during the forecast period. The demand for crude is majorly influenced by the growing applications in fermentation and feed manufacturing applications. The crude segment experienced significant changes in pricing due to the supply-demand gap and the increase in the manufacturing cost.

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By Color Analysis

Pale-yellow to White Segment to Exhibit Notable Growth Due to the High Demand from Food Industry

Based on color, the market is segmented into yellow, pale-yellow to white, and white.

In 2023, the pale-yellow to white segment accounted for the largest share of the market. The increasing demand for pale yellow to white lactose from the food industry and the growing emphasis of major players on increasing the production of infant formula are resulting in the growing demand for pale yellow to white from developing and developed countries.

  • For instance, in December 2020, Perrigo Company plc announced the expansion of its plant in Georgia to meet the growing consumer demand for store brand infant formula. The expansion would help the company to enhance its infant formula manufacturing capabilities.

Moreover, the steady demand for white lactose from the pharmaceutical industry and the rapidly growing pharma industry in emerging countries are increasing the demand and growth of the market. The prerequisite of the pharmaceutical industry is pure white lactose, owing to its basic applications in inhalation drugs and as fillers in oral drug formulations.

The increasing applications of yellow lactose in feed manufacturing and other industrial applications are responsible for surging the demand for yellow lactose from developing and developed countries.

By Application Analysis

Infant Formula Segment to Dominate the Market Due to Increasing Demand for Infant Grade Lactose from Developing Countries

Based on application, the market is classified into food, feed, pharmaceuticals, and infant formula.

The infant formula segment is anticipated to hold the dominant share in the market during the forecast period. The growing emphasis on domestic manufacturing of infant formula in China and the increasing consumption of infant formula in the U.S. and European countries are responsible for the dominance of the segment.

  • For instance, in September 2021, FrieslandCampina Ingredients relaunched its infant nutrition brand Friso in the Netherlands market with an aim to expand its brand presence in the country.

The food segment accounted for the second largest lactose market share in 2023. The growing applications of the product in the food industry and the increasing demand for these products for the standardization of dairy products are responsible for the segment growth. The major dairy processing countries such as New Zealand are actively involved in importing food grade from countries such as the U.S.


In terms of geography, the market is categorized into North America, Europe, Asia Pacific, and the rest of the world.

Asia Pacific Lactose Market Size, 2023 (USD Billion)

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The market size in Asia Pacific stood at USD 1.08 billion in 2023. Increasing manufacturing of infant formula in the region and the growing pharmaceutical industry in China and India are some of the factors responsible for the dominance of Asia Pacific in 2023. Moreover, strategic expansion plans by major players operating in the market to cater to increasing demand are also supporting the market growth.

  • For instance, in September 2021, Olam Food Ingredients announced an investment plan to develop a new dairy processing plant in Tokoroa, New Zealand. The new plant would strengthen the company’s manufacturing network across the globe to produce high-value dairy ingredients.

Europe accounted for the second-largest share of the global market. The growing food industry in the region, the rising consumption of infant formula across Europe, and the well-established dairy sector are likely to drive market growth in the region. Furthermore, stable domestic cheese consumption and the export potential of the region in the cheese and whey processing stream is expected to favor the regional growth over the analysis period.

The market in North America is expected to register a significant CAGR during the forecast period. The favorable business policies regarding the dairy sector, the higher demand for refined-edible grade from the pharmaceutical industry in the U.S., and the growing demand for confectionery and other food products in the country are driving the market growth in North America.  For instance, in February 2021, Milk Specialties Global increased its lactose production by doubling at the California dairy manufacturing facility.

Citing a critical shortage of infant formula in the U.S., the government has relaxed its stringent regulations. These rules limited the number of domestic and global companies to manufacture, export, and sell its infant formula products in the country. The new infant formula enforcement discretion policy enforced by the U.S. FDA is proving beneficial for a rising number of infant formula manufacturers entering the U.S. market.

  • In May 2022, Bubs Australia Limited became the first infant formula manufacturer to receive U.S. FDA approval for its products under this new infant formula enforcement discretion policy.

Moreover, the rest of the world is anticipated to show prominent growth during the forecast period. This is attributed to the strong demand for infant formula and pharmaceuticals from the Middle East & Africa and South America regions.

List of Key Companies in Lactose Market

Production Capacity Expansion and Strong Distribution Channel of Key Players Led to Market Dominance

The global market is fragmented, with the existence of a few international players along with a large number of domestic manufacturers. The major players operating in the market focus on production capacity expansion and strategic collaborations to gain a competitive advantage over other players.

  • For instance, in February 2022, Saputo Inc. announced USD 169.0 million investment plans to expand three cheese manufacturing sites in the U.S. The move would help the company increase its cheese production and subsequently help the company increase its manufacturing capacity.

  • Similarly, in May 2021, Hilmar Cheese Company, Inc. announced plans to establish a new state-of-the-art cheese and whey protein processing plant in Dodge City, Kansas. This would allow the company to strengthen its position in the cheese, whey, and lactose segments.

Some prominent players, such as MEGGLE GmbH & Co. KG, Sachsenmilch Leppersdorf GmbH, Hilmar Cheese Company, Inc., and Glanbia PLC, are focusing on research and development activities for the introduction of innovative products to gain a competitive edge over other players.


  • Fonterra Co-operative Group (New Zealand)

  • FrieslandCampina (Netherlands)

  • DFE Pharma (Germany)


  • Arla Foods Ingredients Group P/S (Denmark)

  • MEGGLE GmbH & Co. KG (Denmark)

  • Lactose (India) Limited (India)

  • Hilmar Cheese Company, Inc. (U.S.)

  • Kerry Group plc. (Ireland)

  • Käserei Champignon Hofmeister GmbH & Co. KG (ALPAVIT) (Germany)

  • Armor Proteines (SAVENCIA SA) (France)

  • Glanbia PLC (Ireland)

  • Lactalis International (Lactalis Group) (France)

  • Milk Specialties Global (U.S.)


  • November 2023: Nestlé S.A. launched the N3 milk formula in the market. The product is made from cow's milk with all the essential nutrients found in milk and contains prebiotic fibers in the product.

  • April 2023: MEGGLE GmbH & Co. KG announced the extension of its InhaLac product family with a milled lactose grade.

  • July 2022: DFE Pharma launched Lactohale 400 to expand its Dry Powder Inhalation (DPI) portfolio.

  • March 2022: Arla Foods Ingredients Group P/S launched two new products in its organic sector Lacroprodan and Premium Lactose Organic, with an aim to expand its product portfolio.

  • July 2021: Saputo Inc. acquired U.K.-based cheese manufacturer Wensleydale Dairy Products. The company manufactures, blends, and distributes a wide range of specialty and regional cheeses. This development helped the company expand its cheese manufacturing capacity, which would ultimately increase the production capacity of lactose as it is the by-product of cheese production.

  • September 2021: FrieslandCampina Ingredients relaunched Friso, its infant nutrition brand, in the Netherlands market with an aim to expand its brand presence in the country.


An Infographic Representation of Lactose Market

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The lactose market research report provides a detailed market analysis and focuses on key aspects such as leading companies, competitive landscape, products, and applications. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the market report encompasses several factors that have contributed to the growth of the market in recent years.

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Report Scope and Segmentation



Study Period


Base Year


Estimated Year


Forecast Period


Historical Period


Growth Rate

CAGR of 22.0% from 2024-2032


Value (USD Billion)


By Application

  • Food

  • Feed

  • Pharmaceuticals

  • Infant Formula

    • Dry-blend

    • Wet-blend

By Color

  • Yellow

  • Pale-Yellow to White

  • White

By Purity

  • Crude

  • Edible

  • Refined Edible

By Geography

  • North America

  • Europe

  • Asia Pacific

  • Rest of the World

Frequently Asked Questions

Fortune Business Insights says that the global market stood at USD 1.72 billion in 2023 and is projected to reach USD 4.99 billion by 2032.

The market will exhibit steady growth at a CAGR of 22.0% during the forecast period.

Based on purity, the refined-edible grade segment dominated the global market in 2023.

By color, the pale-yellow to white segment is leading the market.

Rapid growth of pharmaceuticals in emerging countries, health benefits associated with the product, and growing demand for dairy products are the key drivers of the market.

Lactalis International, FrieslandCampina Ingredients, Fonterra co-operative Group, and Arla Foods Ingredients P/S are the top players in the market.

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