Offering Lactose Free Options Drives Sales, Grows Consumption

 

The global lactose-free dairy market was valued at $11.5 billion in 2021, according to a report published by Allied Market Research. The market is estimated to generate $24.4 billion by 2031, representing a compound annual growth rate of 8.0% from 2022 to 2031. 

Here’s what you need to know. Many consumers with lactose sensitivities strayed from real dairy foods because of the lactose content. Now, in their quest for nutrient-dense, minimally processed foods, they are coming back to the category because dairy processors have decided to either eliminate or break down that lactose in finished products in order to make the products more tummy friendly.

And it’s working. Even better, it’s working in fluid milk. Value-added fluid milk is driving volume sales. In fact, 2024 ended with volume milk retail sales posting growth (less than a percent) for the first time in a long time in a year of pandemic-free shopping, according to Circana data. Lactose-free milk is the leading form of value-added options driving this growth, followed by organic and grass fed. 

Note how today’s blog sponsor, Dutch Farms, calls out that its lactose-free milk is “real milk without the discomfort.” Shoppers want to better understand the foods they are buying and may require such explanations, especially with consumer demand for lactose-free dairy products predicted to grow rapidly over the next five years. 

Some of that growth will be coming from outside the supermarket. In early 2024, the U.S. Department of Agriculture (USDA) released a final rule to update meal patterns for the National School Lunch Program and School Breakfast Program. The agency re-emphasized lactose-free milk as an option in all reimbursable meals. Offering lactose-free milk as a choice to all students supports child health and nutrition equity in school meals.

 

Dairy checkoff initiatives in 2024 successfully increased milk consumption in schools by offering lactose-free options. The National Dairy Council (NDC) and American Dairy Association Mideast worked with Cincinnati Public Schools (CPS) to offer the country’s first single-serve lactose-free chocolate milk program. When compared to the rest of the district, the pilot schools experienced a 16% increase in milk consumption. 

The hugely successful pilot project has now been adopted district-wide, improving nutrition, boosting school lunch participation and reducing food waste. The Cincinnati model points to a promising path for milk in schools, as student bodies become more diverse and millions of children rely on school meals as their main nutrition source for the day.

“These are kids who may not be able to go home to a refrigerator full of food, and so it's our job to make sure that we are providing them with the most healthy and nutritious meals possible when they’re here with us at school,” said Jessica Shelly, director of student dining services for CPS. “Part of that is making sure they have all the nutrients and protein they need, and we know that milk plays a large role in that.”  

The dairy industry is uniquely poised to use the lactase enzyme to assist with converting milk’s inherent sugar--lactose, a disaccharide—into its sweeter-tasting monosaccharide units: glucose and galactose. It’s a win-win for marketers who want to make an added sugar content claim and consumers who avoid lactose because of digestive issues.

The other option is to use ultrafiltration to remove the lactose all together. This involves investment in filtration technology, whereas using lactase is the simple addition of an ingredient and some time for the enzyme to do its job. 

In case you missed it, the 2025 Dietary Guidelines Advisory Committee (DGAC) issued its final scientific report at the end of 2024. The DGAC advised the U.S. Departments of Health and Human Services (HHS) and USDA to continue to recommend that Americans consume three servings of dairy per day and that dairy products stay a distinct food group in recognition of their unmatched health and nutrition benefits.

Offering lactose-free options makes this recommendation easier to follow for those with lactose sensitivities.

“Twenty leading dietitians, physicians and public health experts that comprise the federal DGAC confirmed dairy products should continue to maintain a central, important role in federal nutrition recommendations for people beginning at a very early age and that most Americans should consume three servings of dairy per day,” said Roberta Wagner, senior vice president of regulatory and scientific affairs at the International Dairy Foods Association (IDFA). “The committee, which evaluates the latest findings and overall bodies of evidence in nutrition science, found strong evidence pointing to positive health outcomes from dairy foods. In fact, the committee includes dairy as a core category in the recommended ‘Eat Healthy Your Way’ dietary pattern alongside fresh fruits and vegetables, legumes and whole grains. 

“The U.S. dairy industry is pleased to see that the science has once again affirmed the unmatched health and nutrition benefits that dairy products provide to people of all ages. The DGAC scientific report confirmed lactose-free dairy as an integral part of the dairy group, ensuring dairy nutrition is accessible to all Americans. The report also highlighted the association between total and higher fat milk with favorable growth outcomes, including lower risk of obesity, in younger children. Dairy processors provide a wide range of nutritious dairy options, at a variety of fat and sweetness levels that can work within the healthy diets of Americans. No matter the level of sweetness or fat, milk, yogurt and cheese provide the same nutrient package of up to 13 essential nutrients.

“Unfortunately, the DGAC excluded a number of scientific studies which show the health benefits of dairy at each fat level. IDFA has for many months urged the Committee to disclose what research it would rely upon to form its recommendations, yet the DGAC science selection and review process remained opaque and unavailable to public review and comment until now, after the report has been submitted to HHS and USDA. There is robust evidence to support the federal government disposing of its outdated recommendation to limit dairy consumption based on fat level. The latest science shows that full-fat dairy products do not increase risk of cardiovascular disease or weight gain, and that they may in fact have positive health benefits. IDFA provided the Committee with the body of science to support this point, but the vast majority of those studies were ultimately excluded from DGAC review. IDFA encourages HHS and USDA to remedy this oversight in the final DGAs expected to issue in 2025, and to work to ensure a more transparent and scientifically rigorous process for the development of future DGAC reports.”

Those scientific studies that Wagner referred to show a relationship between dairy foods at varied fat levels and a reduced risk of cardiovascular disease (CVD), not an increase in risk. A 2016 systematic review, partially funded by NDC, found either a neutral or favorable association between dairy consumption and cardiovascular-related outcomes. The researchers emphasized that the recommendation to focus on low-fat in place of high-fat dairy is currently not evidence-based, and further research is needed to specifically address this key research gap.

Much of this has to do with dairy matrix, something researchers are still learning about. Scientists are starting to better understand that nutrients, when present in whole, minimally processed foods, interact with each other, impacting digestion and absorption. In the dairy industry, this is now called the dairy matrix effect, and it’s all about bioactives, which are small molecular compounds that have only recently been discovered. 

Basically, these components work together and are greater than the sum of their parts. Milk is more than a collection of isolated nutrients, rather milk is a complex matrix that truly is a powerhouse. Make it easier for consumers to reap the benefits of this matrix by going lactose free. 

Rethinking Innovation Priorities

 

With all the food industry chaos taking place in Washington, D.C., here’s something you may have missed that is happening in West Virginia. Lawmakers there are moving forward with House Bill 2354. This bipartisan legislation amends the State Code regarding adulterated foods and drugs, banning specific food additives and dyes in food products sold in the state. Among the banned substances are Red Dye No. 3, Yellow Dye No. 5, Butylated Hydroxyanisole (BHA), Propylparaben, Red Dye No. 40, Yellow Dye No. 6, Blue Dye No. 1, Blue Dye No. 2, and Green Dye No. 3. West Virginia is banning ALL artificial food colors.  

The bill passed the House on February 28, 2025, with a 93-5 vote and was introduced to the Senate. Last week, the Senate amended the bill, and now it must return to the House for a vote to concur with the changes. (They are nominal.) If the House passes the amended legislation, it will go to the Governor’s desk to be signed into law. If enacted, the legislation would ban food products containing the colors in school nutrition programs beginning on Aug. 1, 2025, and then extend to ALL food sold statewide on Jan. 1, 2028. 

To the best of my knowledge, this is the first ban of artificial food colors for all food sold in a state. This is a HUGE deal. 

On a national level, the FDA issued the order to revoke authorization for the use of FD&C Red No. 3 on January 15, 2025. Food and supplement manufacturers that use the dye have until January 15, 2027, to reformulate their products.

This movement will likely continue, state by state. It’s time now to get fake color out of food and beverage. 

The Research Chefs Association’s (RCA) Annual Conference and Culinology Expo took place this week in St. Louis. The conference ended on Friday afternoon with a closing keynote session featuring Mike Kostyo, vice president of Menu Matters. He provided insights from a recent consumer survey of more than 2,000 U.S. consumers conducted by Menu Matters at the end of 2024, after the election that is causing all the disruption in D.C. and jeopardizing the safety, cost and availability of nutrition to Americans. 

“You’ve seen plenty of lists filled with specific foods, flavors and ingredients that are trending for the year ahead, but what do they mean,” asked Kostyo. “Are they relevant to your business? Will putting them into a product or menu item lead to success?”

He cited the current overkill with “hot honey” everything. He explained how insights from the Menu Matters survey can assist food formulators with innovating in response to trends. 

Specific foods, flavors and ingredients are only a part of the process. Speaking to consumers’ need states completes the task. 

“Last year ended with a consumer need state of ‘just take care of me.’ This year the data point towards a need state of ‘give me something new,’” he said. 

Distraction from what’s going on domestically and abroad is in great need. While 39% of consumers surveyed said they were hopeful heading into 2025, 61% were not. Only 25% were optimistic. 

“Something new” is a welcome distraction. But here’s what qualifies for new. 

“One in five consumers say there are too many versions of the same product on the store shelf,” said Kostyo. Hello yogurt department!

“Fifty-five percent said that ‘new’ food experiences should feature new or unique ingredients or flavors,” he said. “The consumer need here is for new sensory experiences.” 

He provided concepts such as fidget foods, slime and crackling lattes.

The next consumer need state is “give me new ways to value.” While 57% of consumers surveyed prioritize price as value, 43% do not. 

“Value is not always about price,” said Kostyo. “Fifty five percent prioritize quality, 34% healthy, 30% convenience and 30% uniqueness.” 

A whopping 73% of consumers surveyed said that knowing where ingredients come from increases the value of a product, while 53% say innovation increases the value of the product. The unique and innovation attributes play into the next consumer need state of the desire for products to help them escape from the chaos. 

“Seventy percent of consumers said they use foods and beverages as a form of escape,” said Kostyo. “One-third of consumers said that ice cream can be selfcare.” 

He encouraged use of the word “escape” in branding and marketing. 

“Thirty-seven percent of consumers always or regularly look for foods, flavors and ingredients from a place they’ve visited once they’re back home,” said Kostyo. “They are also looking for new ways to live boldly.”

He provided a number of tips on how to go bold. Link HERE to read more on what consumers want. 

He ended with identifying that today’s consumers want to know and experience the human element of food and beverage. 

Dairy can do all this and much more! Tell your story. Make the connection. 

Five Things to Know from the 5th Annual “All Things Food Summit” at SXSW

 

"Once again, thank you Organic Valley!"

Worldwide there is this terrible paradox between hunger and obesity, according to Danielle Nierenberg, co-founder and president of Food Tank. 

“[Feeding people] is not just about filling them up, but it’s about making sure they are nourished,” she said.

1. Food Tank is the world’s fastest growing global non-profit community working towards positive transformation in how we produce and consume food. Food Tank is for farmers and producers, policy makers and government leaders, researchers and scientists, academics and journalists, and the funding and donor communities to collaborate on providing sustainable solutions for our most pressing environmental and social problems.

This week, many of these people, including myself, gathered in Austin, Texas, to finish off SXSW by building a community to improve our food system. 

“Food is more than nutrition. It’s about equality, dignity and choice,” said Nierenberg in her opening statements on March 13. “Solutions already exist to change the food system. They need more attention and support.”

That sounds easier than it is, as it requires participation from everyone up and down the supply chain, and all around the world. The 75-plus speakers at this free event, which was open to the public by ticket only, shared their personal and professional efforts in making a change. 

Learn more about Food Tank HERE.

2. “There’s a big data gap regarding what’s in our food and what it’s doing in our body,” said Selena Ahmad, global director of the Periodic Table of Food Initiative (PTFI), and dean of food education at the American Heart Association. 

The PTFI is providing standardized tools, data and training to map food quality of the world’s edible biodiversity.  Learn more about PTFI HERE.

Ahmed explained that there are about 33,000 edible plant species around the world. We only know and use about 2,000. The role of plants in our food systems will continue to grow, evolve and improve.  

3. “There’s $382 billion worth of surplus food across our country,” said Dana Gunders, president ReFED. 

ReFED is a U.S.-based nonprofit working to catalyze the food system toward evidence-based action to stop wasting food. With a holistic view of the food system and deep expertise in the causes and impacts of food waste, key opportunities in the sector, and where capital can spark the most impact, ReFED engages food businesses, funders, innovators, policymakers and more to drive systems-level change. Learn more about ReFED HERE.

“We are seeing lots of pockets of change,” said Gunders. “The culinary world loves the topic of reducing food waste.”

IDEA: Provide consumers tips on how to prevent waste when products are nearing expiration date. For example, freeze yogurt in ice cube trays for later use in making smoothies. 

4. “The food system has to be delicious,” said Cecile Belioy, CEO of Bel Group. “We can continue to keep feeding people fat and sugar. These are empty calories.”

The focus for Bel Group is protein in the form of cheese-type products. It’s about providing consumers healthful choices, and the company has dairy and plant-based options. 

Ivan Giraud, the North America CEO for Bel Group identified the three pillars of purposeful snacking. First there’s individualized nourishment. There has to be an option for everyone’s preferences to make sure they are fueling their body. Second, portion packaging helps consumers control what they eat. It also helps cut down on food waste. And third, “make it fun for them to want to try it,” he said. “Food should bring joy.” 

5. Organic Valley now offers choice, in a premium, sustainable, traceable way. Just like Organic Valley had an impressive presence at Expo West last week, the cooperative was a star at Food Tank’s All Things Food Summit at SXSW. Attendees were greeted by a barista and given their option of Organic Valley’s dairy creamers or its new oat-based creamers. 

Organic Valley Oat Creamers are made with oats sourced directly from its U.S. organic family farms. They come in caramel, cinnamon spice, oatmeal cookie and vanilla flavors.

“We’re excited to introduce the new Organic Valley Oat Creamers because we know that many of our loyal Organic Valley milk buyers also purchase plant-based beverages, which makes it a natural evolution for our cooperative,” said Laurie Drake, vice president of marketing. “We’re always looking to raise the bar with product innovation and now our consumers have even more creamer options in a plant-based form.”

What makes the new Organic Valley Oat Creamers truly unique is how they’re made. The coop works directly with its own organic family farms and works hand in hand with its oat farmers to grow crops sustainably, ensuring every step—from crop to carton—upholds the integrity and quality that consumers trust from the brand. 

“We know consumers care about where their food comes from,” Drake said. 

It’s the future of food. 

Elevate your dairy alternative range with faba bean protein concentrate from BENEO, today’s blog sponsor. 

As consumers focus on health, sustainability and ethical choices, there’s a growing need for dairy alternatives that offer similar nutritional benefits as traditional dairy products, all while offering an enjoyable taste and texture. Furthermore, research shows that protein content is a major purchase drive for dairy-free options. Discover how faba bean protein can elevate your indulgent applications and fulfil consumers’ wishes. Link HERE.

Expo West 2025: Dairy Stole the Show

 

“Protecting where your food comes from.” Thank you Organic Valley.

It was wonderful to see so many friends at Natural Products Expo West this week. Wow, what an amazing show. The best part was that some of the aisles were wider (just not in Hall E) and all the halls opened at the same time. This helped prevent overcrowding of the North halls, which in past years, opened up one hour earlier than the main convention center. 

Attendance was also down, but this was viewed by many as a good thing. The two reasons attendance was closer to 65,000 instead of 85,000 (the record breaker in 2018), was the cost to attend for people with a “dot, dot, dot” affiliation to the natural and organics industry tripled. Further, there were many no-shows because of weather. You were missed, but gosh, it was so much nicer to be able to walk and talk in the halls without fear of being trampled on in an emergency. 

Even the Fresh Ideas Organic Marketplace tent on Tuesday seemed more manageable. And look who I was lucky enough to get a photo op with: Albert Straus, founder of Straus Family Creamery, and John Coletta, CEO, Clover Sonoma.  Straus was sampling the company’s new gluten-free Organic Super Premium Cookie Dough Ice Cream made from milk produced using sustainable, regenerative and organic dairy farming practices. The new flavor is the third Straus ice cream cookie flavor, joining Lemon Cookie and Cookies & Cream, which are also gluten-free. For gluten-free eaters who prefer a clean ingredient list and the rich flavor and creamy mouthfeel of ice cream made with traditional dairy, Straus Family Creamery offers a rare treat, as most gluten-free cookie ice creams are made with alternative milks, such as almond, oat and soy, and often include gums and fillers.

 

Thank you to Lifeway Foods for sponsoring Wednesday’s sunrise yoga. And wow, Dairy Farmers of America (DFA) really upped its game at Expo West this year. Besides having a very large booth where Milk50 was sampled, the cooperative sponsored the Community Brunch, which was free and open to all attendees and exhibitors. Dairy foods were served at both events.
Yogis were able to enjoy Lifeway Foods’ new on-the-go 8-ounce Organic Kefir. The lactose-free line comes in 10 on-trend flavors, with each bottle packed with high-quality bioavailable nutrients, including protein, calcium and 12 live and active probiotic cultures. Flavors are: Coconut Pineapple, Grapefruit Elderflower, Guava Jackfruit, Hot Honey, Matcha Latte, Passionfruit Lychee, Pink Dragon Fruit, Pistachio Rose Vanilla, Taro Ube Latte and Wild Blueberry Lavender.

And in case you missed the news on Milk50, this first-of-its-kind real dairy milk is made using an advanced ultra-filtration method. The new lactose-free, reduced-calorie milk comes in Original, Chocolate and Vanilla, with an 8-ounce containing only 50 calories with 75% less sugar than fat-free skim milk and 9 grams of protein. A serving is also an excellent source of calcium (20% Daily Value) and a good source of vitamin D (10%) and vitamin A (15%).

A big shout out to my friends at the California Milk Advisory Board and Dairy Management Inc. (DMI), which hosted a very interactive booth with sampling and storytelling. So proud of how the industry is moving forward and modernizing nutrient-dense milk. 

Now onto the nitty gritty. As I have written in the past, just because you can doesn’t mean you should. That statement applies, once again, to the plethora of new beverages making their debut. Informa Markets’ New Hope Network, the event organizers, called it the “Surging Soda Showdown.” There were way too many prebiotic sodas that are copycats of Olipop and Poppi. The same with Liquid Death, the original canned still water that often sells at events for around $8.00 for a 16-ounce can. It’s water in a can.
Other examples of “just because you can, doesn’t mean you should” include “desalinated water.” Last time I checked, bottled water was not salty. Another example is oat-free oatmeal. It’s made with chickpeas. And, at a time when the cost of eggs is at an all-time high, and does not show signs of coming down in the near future, why would you introduce dairy-free—but made with eggs—yogurt and dips?

There were many great new products to praise. One of my favorite innovations is Chad & Barney’s Sturdy Sauce (pictured above), which claims to be the world’s first high-protein pasta sauce. A half-cup serving contains 20 grams of protein from the company’s proprietary blend of hydrolyzed bovine collagen, hydrolyzed bovine bone broth and whey protein isolate. It’s delicious. The sauce comes in 17-ounce shelf-stable jars in three varieties: Garlic & Herb, Marinara and Sweet Basil. 

 

Protein products showed muscle at Expo West, and dairy was very much a part of the effort. There were a number of new beverages offering “more,” which included using dairy ingredients. Healthee offers ready-to-drink Protein Cold Brew Latte in three formulations: Bone (sea salt caramel), Joint (chocolate), and Skin, Hair & Nails (French vanilla). They include micellular casein isolate and bioactive collagen peptides. An 8-ounce can contains 70 calories and 15 grams of protein. The drinks have no added sugars and are sweetened with stevia. 

 

Asahi Beverages America debuted Refrezz, a postbiotic beverage containing compounds associated with relaxation and supporting sleep. It includes nonfat milk and is positioned as a “wellness soda.”
 

New Protein Pop is a clear, non-carbonated drink that delivers 20 grams of whey protein per 12-ounce slim can. At 90 calories per can, it is positioned as “highly satiating and helps build and maintain lean muscle.” The beverage is lactose free and contain 0 grams sugar.

Mosh finally had a booth at Expo West. The company’s co-founder—Maria Shriver—made an appearance at The State of Natural and Organic Keynote Address.  Mosh bars are “protein bars made for your brain,” according to Shriver. They are brain and body fuel and come loaded with a proprietary protein blend based on whey protein isolate, whet protein concentrate and milk protein isolate. 

These innovations speak to the “Make It With Dary” campaign from today’s blog sponsor, American Dairy Products Institute. Check it out HERE.

In addition, these products are examples of “What Women Really Want: Cracking the Code for Food & Beverages.” This was the title of the educational session sponsored by DMI. 

“Over 50% of women are dissatisfied with their current health and wellness options,” said Eve Pollet, senior vice president, foresight and discovery at DMI. “[The good news is that] we are moving from stigmas to solutions. There’s a shift in the language we are using to address women’s health.”

Norrie Wilson, global innovation and insights consultant for DMI discussed findings from numerous consumers studies on health and wellness that have been conducted on behalf of DMI. Findings include that an overwhelming majority of women believe in the importance of living a healthy lifestyle and they agree that they will take whatever means necessary to control their own health.  

“Sixty eight percent of women are looking for ‘better sleep’ benefits,” said Wilson. “The majority (58%) are seeking weight management solutions. They are looking to mover from the mindset of deprivation to one of balance when it comes to eating.”

This is fueling many dairy innovations centered around protein, including high-protein sweet treats in single-serve packaging. The newest Mosh flavor--Raspberry White Chocolate Crunch--is just that!

“Whey protein is something consumers are responding to,” said Brandon Casteel, vice president of partnerships for SPINS. 

Wilson added, “Women want every day meal and snacking solutions. They want foods that enable them to have an active lifestyle. They are looking for products for endurance, muscle recovery and muscle mass maintenance.”

Bone health is also very important. They are looking protein and bone health solutions for their many varied life stages. Dairy provides all that and more.

“Consumers are super confused,” Wilson concluded. “They need our guidance. They are looking for bundled solutions [that give them many bioavailable and critical nutrients in one package.”

Let’s get busy. Natural Products Expo West 2026 is one year away. Let’s have more products ready for the market.

Over the next few weeks, more of the dairy foods innovations that debuted at Expo West will be highlighted as a Daily Dose of Dairy.