The Lactose and Derivative sales reached USD 42 billion in 2022, worldwide demand for the target product sales shows year-on-year growth of 3.2% in 2023 and thus, the target product sales are expected to reach USD 42.1 billion in 2024. Over the projection period (2024 to 2034), global Lactose and derivative sales are projected to rise at a 4.1% compound annual growth rate (CAGR) and reach a sales valuation of USD 63 billion by 2034 end.
The sugar lactose is a natural constituent of milk and other dairy products. It is a disaccharide which consists chemically of two simpler sugars namely glucose and galactose. Lactase, an enzyme produced in the small intestine, is responsible for the breakdown of lactose in the body.
This lactose is comes in different derivatives such as Lactulose, Lactitol, Lactobionic Acid, Galactooligosaccharides (GOS) etc which apply to various industries. Because of its functional and nutritional properties its application is increasing in the new product development and commercialization. Lactose and its derivatives applied as ingredients in pharmaceuticals, nutritional healthcare, foods and beverages, and feed product manufacturing.
Baby food such as infant formulas as well as items including many confectionaries are made up essentially of substantial quantities of lactose or its derivatives such as milk-based toffies and chocolates. Sales of target products increases within the pharmaceutical domain when new inhalation medication therapies are developed using lactose-based material. In subsequent years lactose will be more demand than usual because it is a low glycemic index carbohydrate source with low sweetness compared to other sugars like glucose sucrose maltose which means less calorific value.
Lactose plays an essential role in the pharmaceutical industry due to its desirable characteristics including good compressibility, stability, cost-effectiveness and so on. Pharmaceutical-grade lactose demand has increased significantly because it has several applications in drug formulation. Lactose is extensively used in the manufacturing of tablets, capsules, and powders due to its capability to act as a binder, filler, and diluent. Lactose is also used for the manufacturing of powder inhalation products for respiratory health medication.
| Attributes | Description |
|---|---|
| Estimated Global Lactose and Derivative Market Value (2024E) | USD 42.1 billion |
| Projected Global Lactose and Derivative Market Value (2034F) | USD 63 billion |
| Value-based CAGR (2024 to 2034) | 4.1% |
Advancement in processing technology especially in the field of dairy and dairy products, allows the separation of lactose and the manufacturing of its derivatives. Technology such as ultra-filtration and nano-filtration techniques for separation of lactose molecules at the molecular level to get the highest purity end product. Enzymatic processing and spray drying is another technology used to manufacture the target product.
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The below table presents a comparative assessment of the variation in CAGR over six months for the base year (2023) and current year (2024) for the global target product industry. This analysis reveals crucial shifts in industry performance and indicates revenue realization patterns, thus providing stakeholders with a better vision of the industry growth trajectory over the year. The first half of the year, or H1, spans from January to June. The second half, H2, includes the months from July to December
| Particular | Value CAGR |
|---|---|
| H1 | 3.2% (2023 to 2033) |
| H2 | 3.5% (2023 to 2033) |
| H1 | 4.0% (2024 to 2034) |
| H2 | 4.1% (2024 to 2034) |
The above table presents the expected CAGR for the global Lactose and derivative industry over several semi-annual periods spanning from 2024 to 2034. In the first half (H1) of the decade from 2023 to 2033, the business is predicted to surge at a CAGR of 3.2%, followed by a slightly higher growth rate of 3.5% in the second half (H2) of the same decade.
Moving into the subsequent period, from H1 2024 to H2 2034, the CAGR is projected to increase slightly to 4.0% in the first half and remain relatively moderate at 4.1% in the second half. In the first half (H1) the target sales witnessed a decrease of 30 BPS while in the second half (H2), witnessed an increase of 25 BPS.
Increased awareness of consumers for lactose and its derivatives for its health effects such as prebiotic benefits
Consumers increasingly recognize the health benefits of lactose derivatives such as prebiotics (e.g., galactooligosaccharides, or GOS). These concepts have transformed diets and consumer preferences leading to increased demand for these functional ingredients in various pharmaceutical products, food, and beverages.
Other derivatives include lactitol which is a sugar alcohol obtained from lactose used as a low-calorie sweetener and for treating constipation. Lactic acid produced by fermentation by some microbes is used in the preservation of food, and flavoring content among other uses.
Rising demand for lactose as a pharmaceutical excipient due to its excellent compressibility, stability, and cost-effectiveness
Lactose plays several important roles in the manufacture of pharmaceutical formulations. As such, it serves as a filler or bulking agent in tablets and capsules where the active pharmaceutical ingredients (APIs) need to be delivered accurately and consistently. The excellent compressibility of lactose allows robust tablet formation with ease during production.
Moreover, its chemical stability guarantees that no reaction takes place between it and the APIs hence maintaining drug safety over shelf life. Oral solid dosage forms account for a significant share of all medications produced by industry; thus lactose has become its indispensable component.
The development of nutritional, high-quality infant formula needs lactose or its derivatives
Infant formula is incomplete without lactose, which is a natural sugar found in mammalian milk. This ingredient is crucial for providing essential carbohydrates that support the growth and development of infants. High population growth rates in certain areas and increased attention to nutritional needs are among the major drivers of this demand.
Lactose provides an easily available source of energy, enhances calcium absorption, and promotes beneficial gut bacteria. Hence, lactose is indispensable for making high-quality infant formulas.
Growing demand for functional food provides health benefits beyond meeting basic nutrition needs
Lactose or other ingredients that are derivatives of lactose such as lactulose and lactitol, are gaining popularity in the functional foods industry due to their specific health benefits, such as improved digestion and low-calorie sweetening ingredients. Lactulose is recognized as a prebiotic and laxative agent as it promotes the growth of gut microbes and maintains a healthy digestive system. This is a significant ingredient to enhanced digestion and is also used medicinally to treat constipation and improve the immune systems of people.
Lactitol, a derivative of lactose which is 40% as sweet as sucrose can be used as a low-calorie sweetener making the perfect alternative for those consumers who are looking for a reduction of sugar intake to control their calories. It also does not cause any tooth decay which is an important consideration for dental health.
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Global target product sales increased at a CAGR of 3.2% from 2019 to 2023. For the assessment period of 2024 to 2034, the projections showcase that the sale value will expand at a CAGR of 4.1%.
This slow and continuous increase in the sales of the target product as an ingredient for various applications for the manufacturing of pharmaceutical products, food, and beverages or as an ingredient in feed for animals. The development of new products and formulations that include prebiotics and low-calorie sweeteners further supported sales of target products. Increased urbanization and rising disposable incomes in emerging regions will significantly boost demand for lactose-based products.
Some regions across the globe are expected to see higher birth rates and greater health awareness about infants, toddlers, etc driving demand for high-quality infant formula and functional foods. Favorable regulations and standards for lactose use in pharmaceuticals and food products will further support target product portfolio expansion.
Improvements in dairy processing technologies, such as ultra-filtration and enzymatic processing, enhanced the efficiency and quality of lactose production, meeting the rising purity standards required for pharmaceutical and high-end food applications. Continued innovation and consumer interest in health-oriented products maintained a strong demand for lactose derivatives in the functional foods sector.
The global target product industry has many big players or MNCs such as Friesland Foods, Lactilis Ingredients, Avantor, Inc., BASF SE, Davisco Foods International, Inc., Hoogwegt Groep B.V., Kerry plc group, Arla Foods Inc., Fonterra Co-Operative Group, etc. which comprise a significant share of the global sales that comes under Tier 1 of the industry structure.
These companies have numerous manufacturing facilities. These distinguish themselves based on supply chains or distribution networks that allow them to supply their products worldwide. They maintain quality checks across the processing line and throughout the supply chain and reduce costs due to advanced manufacturing technology with high efficiency to manufacture high-quality and safe products according to the end-use application.
Tier 2 players such as Avantor, Inc., Lactose (India) Limited, Merck KgaA, Milei GmbH, Molkerei MEGGLE Wasserburg GmbH & Co. KG, etc. often concentrate on certain limitations based on their product type or the sources, manufacturing facility, end-use applications with the distribution and supply chains network and have formed strategic partnerships with other companies to expand their reach.
On the other hand, Tier 3 companies are small in terms of their production facilities with very little geographical expansion. They may not have advanced technology and wide global reach. They operate with a local presence and serve a niche industry sector.
However, the sale is proceeding towards fragmentation as more and more players are entering into the sector from various parts of the globe. The sector is also heavily influenced by government regulations. Overall, the industry comprises a dynamic and complex nature, with MNCs playing the role of a trendsetter.
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The following table shows the estimated growth rates of the top countries for targeted lactose and its derivatives. China and India are set to exhibit the recording CAGRs of % and 6.2%, respectively, through 2034.
| Countries | CAGR 2024 to 2034 |
|---|---|
| United States | 3.9% |
| Germany | 3.5% |
| China | 4.8% |
| India | 5.5% |
| Australia | 5.9% |
The sales for target products in the United States are projected to exhibit a CAGR of 3.9% from 2024 to 2034. By 2034, revenue from the sales of target products in the country is expected to reach USD 15.5 billion.
Pharmaceutical-grade lactose serves as a vital excipient in the pharmaceutical sector. However, lactose and its derivatives are most commonly used due to their good physical properties such as non reactivity with other ingredients, stability, and compatibility with a broad range of active pharmaceutical ingredients (APIs).
Laxatives in certain products contain derivatives of lactose which make digestion easier and facilitate the treatment of constipation. In addition, it is also an excellent filler or binder that provides bulk to tablets and ensures uniformity in the distribution of the active ingredient. And so this growing pharmaceutical sector with advanced medicine manufacturing surges the sale of target products.
The trade for target products in China is projected to exhibit a CAGR of 4.8% from 2024 to 2034. By 2034, revenue from the sales of target products in the country is expected to reach USD 12.8 billion.
Due to the increase in population there has been a consistent rise in demand for baby food or infant formula to ensure the healthy growth of infants. Thus, lactose is crucial for infant formula manufacturers to copy human milk for its taste and nutrition. Likewise, this trend calls for the development of lactose and other derivatives used in the manufacture of infant foods among others.
The sales for target products in China are projected to exhibit a CAGR of 5.9% from 2024 to 2034. By 2034, revenue from the sales of target products in the country is expected to reach USD 5.1 billion.
Australia has a strong dairy industry known for producing high-quality milk, which provides ample raw materials required for producing lactose and its derivatives. In addition, Australia’s huge production base can allow it to export target products globally.
| Segment | Lactose (By Product Type) |
|---|---|
| Value Share (2024) | 35.6% |
Lactose in the product type segment is anticipated to register a CAGR of 5.2% during the assessment period of 2024 to 2034, to reach a sales valuation of USD 22.4 billion in 2034.
Due to the widespread application of lactose in the development of various food and beverages such as confectionary products. Pharmaceutical products also include lactose due to its functional properties such as its filling and stabilizing properties. This lactose is used as the active ingredient in the formulation of infant formula products. Also used in various formulations of pet food and feed products.
| Segment | Dry (By Form) |
|---|---|
| Value Share (2024) | 55.6% |
Lactose and its derivatives in the dry form are anticipated to register a CAGR of 5.8% during the forecasted period from 2024 to 2034, to reach a valuation of USD 35 billion by the end of 2034.
Target products as the ingredients in the dry form dominate the industry due to their ease of transportation, ease of use during processing and manufacturing of various food and pharmaceutical products, as well as the extended shelf life. Advanced and improved production technology such as spray drying and other, manufactures the dry form of target products with more efficiency, safety, and quality.
The key players in the target product industry are continuously innovating to introduce new formulations of target products as ingredients from diverse sources via innovative processes for widespread end-use application. Key manufacturing companies are involved in strategies such as merger acquisitions, partnerships, and collaborations among others in the sectors to expand production capacity and cater to a wider audience due to the increasing population.
Brands must strategize ways to retain their sales share by prioritizing sustainability, ethical sourcing, and reducing their carbon footprint.
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As per product type, the industry has been categorized into Lactose, Galactose, Lactulose, Lactitol, Lactobionic Acid, Galactooligosaccharides, Epilactose, Lactosucrose, Sialyllactose, Tagatose, Lactic Acid
This segment is further categorized into Food and Beverages, Pharmaceuticals, Feed Ingredients, and Others.
This segment is further categorized into Powder and granules.
This segment is further categorized into Food Grade, Pharmaceutical Grade, Industrial Grade
Industry analysis has been carried out in key countries of North America, Latin America, Europe, East Asia, South Asia, Oceania, and the Middle East & Africa.
The global target product sales are estimated at a value of USD 42.1 billion in 2024.
Sales of target products increased at 3.2% CAGR between 2019 and 2023.
Lactilis Ingredients, Friesland Campina Foods, Arla Foods Inc., Fonterra Co-Operative Group, Kerry plc, Lactose (India) Limited, Merck KgaA, Milei GmbH are some of the leading players in this sector.
The North American sales are projected to hold a revenue share of 26.6% over the forecast period.
The sales are projected to grow at a forecast CAGR of 4.1% from 2024 to 2034.
1. Executive Summary 2. Industry Introduction, including Taxonomy and Market Definition 3. Market Trends and Success Factors, including Macro-economic Factors, Market Dynamics, and Recent Industry Developments 4. Global Market Demand Analysis and Forecast, including Historical Analysis and Future Projections 5. Pricing Analysis 6. Global Market Analysis and Forecast 6.1. Product Type 6.2. End-Use 6.3. Form 6.4. Grade 6.5. Rigion 7. Global Market Analysis and Forecast, By Product Type 7.1. Lactose 7.2. Galactose 7.3. Lactulose 7.4. Lactitol 7.5. Lactobionic Acid 7.6. Galactooligosaccharides 7.7. Epilactose 7.8. Lactosucrose 7.9. Sialyllactose 7.10. Tagatose 7.11. Lactic Acid 8. Global Market Analysis and Forecast, By End-Use 8.1. Food and Beverages 8.2. Pharmaceuticals 8.3. Feed Ingredients 8.4. Others 9. Global Market Analysis and Forecast, By Form 9.1. Powder 9.2. Granules 10. Global Market Analysis and Forecast, By Grade 10.1. Food Grade 10.2. Pharmaceutical Grade 10.3. Industrial Grade 11. Global Market Analysis and Forecast, By Region 11.1. North America 11.2. Latin America 11.3. Western Europe 11.4. Eastern Europe 11.5. Asia Pacific 11.6. East Asia 11.7. MEA 12. North America Sales Analysis and Forecast, by Key Segments and Countries 13. Latin America Sales Analysis and Forecast, by Key Segments and Countries 14. Western Europe Sales Analysis and Forecast, by Key Segments and Countries 15. Eastern Europe Sales Analysis and Forecast, by Key Segments and Countries 16. Asia Pacific Sales Analysis and Forecast, by Key Segments and Countries 17. East Asia Sales Analysis and Forecast, by Key Segments and Countries 18. MEA Sales Analysis and Forecast, by Key Segments and Countries 19. Sales Forecast by Product Type, End-Use, Form, and Grade for 30 Countries 20. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard 21. Company Profile 21.1. Lactilis Ingredients 21.2. Arla Foods Inc. 21.3. Fonterra Co-Operative Group 21.4. Kerry plc 21.5. Lactose (India) Limited 21.6. Merck KgaA 21.7. Milei GmbH 21.8. Alpavit Käserei Champignon Hofmeister GmbH & Co. KG 21.9. Avantor, Inc. 21.10. Ba'emek Advanced Technologies Ltd (Tnuva Group) 21.11. Davisco Foods International, Inc. 21.12. DFE Pharma (JV of Royal FrieslandCampina & Fonterra Ltd.) 21.13. Hilmar Ingredients 21.14. Hoogwegt Groep B.V. 21.15. Molkerei MEGGLE Wasserburg GmbH & Co. KG
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Lactose and Derivative Market
