Lactose-free Infant Formula Market – Global Industry Size, Share, Trends, Opportunity and Forecast, By Product Type (Organic, Conventional), By Sales Channel (Supermarket/Hypermarket, Convenience Stores, Online, Others), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 21.22 Billion
CAGR (2026-2031)	6.93%
Fastest Growing Segment	Online
Largest Market	Europe
Market Size (2031)	USD 31.72 Billion

Market Overview

The Global Lactose-free Infant Formula Market will grow from USD 21.22 Billion in 2025 to USD 31.72 Billion by 2031 at a 6.93% CAGR. Lactose-free infant formula is a specialized breast milk substitute formulated without lactose, utilizing alternative carbohydrates such as corn syrup solids, maltodextrin, or sucrose to support infants with congenital, primary, or secondary lactose intolerance. The market is primarily supported by distinct drivers, including the increasing clinical diagnosis of digestive sensitivities in neonates and the rising demand for reliable nutritional solutions among working parents who require digestible feeding alternatives. These factors collectively necessitate the continuous availability of safe, scientifically formulated options when breastfeeding is not feasible.

However, the market faces a significant challenge in the form of stringent regulatory frameworks and global public health campaigns advocating for exclusive breastfeeding, which can impede the widespread adoption of formula products. Despite these regulatory hurdles, the sector demonstrates significant economic scale. According to Specialised Nutrition Europe, in 2024, the specialised nutrition industry, which encompasses the infant formula segment, represented an annual turnover of approaching 24 billion EUR. This figure underscores the substantial market footprint of specialised dietary products designed for vulnerable demographics.

Key Market Drivers

The rising clinical diagnosis of congenital and secondary lactose intolerance, alongside cow’s milk protein allergy, constitutes a primary catalyst for market expansion as medical necessity drives the adoption of specialized nutritional solutions. Neonates presenting with inability to digest lactose or severe allergic reactions to bovine proteins require immediate dietary substitution with formulas based on hydrolyzed proteins or amino acids to prevent gastrointestinal morbidity. This physiological imperative ensures a consistent, non-cyclical demand for therapeutic-grade infant nutrition products. The economic magnitude of this segment is evident in the performance of key manufacturers catering to these pediatric needs. According to Abbott, October 2024, in the 'Abbott Reports Third-Quarter 2024 Results', the company's Pediatric Nutrition division, which includes specialized formulations for digestive sensitivities, recorded global sales of 3,023 million USD for the first nine months of the fiscal year.

Simultaneously, the surging demand for plant-based and organic formula alternatives operates as a critical secondary driver, influenced by heightened parental scrutiny regarding ingredient transparency and animal welfare. Caregivers are increasingly prioritizing formulations utilizing almond, buckwheat, or soy, which naturally exclude lactose, thereby aligning ethical consumption preferences with functional digestive requirements. This shift has enabled niche entrants to capture market share through clean-label innovation. According to Else Nutrition Holdings Inc., April 2024, in the 'Year End 2023 Financial Results', the company reported annual revenue of 9.4 million CAD, reflecting the growing commercial viability of non-dairy infant nutrition. The broader sector’s resilience is further highlighted by established leaders; according to Reckitt Benckiser Group PLC, February 2024, in the 'Full Year 2023 Results', its Nutrition business unit generated net revenue of 2,410 million GBP, underscoring the substantial global investment in specialized infant dietary management.

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Key Market Challenges

The Global Lactose-free Infant Formula Market faces a substantial challenge in the form of stringent regulatory frameworks and intensified public health campaigns advocating for exclusive breastfeeding. These initiatives, driven by international health goals and enforced by national governments, increasingly restrict the marketing, labeling, and availability of formula products, positioning them strictly as a secondary alternative rather than a primary choice. This regulatory environment not only limits brand visibility but also fundamentally shrinks the potential consumer base during the critical early months of an infant's life, as parents are strongly encouraged to delay or avoid the introduction of substitutes.

A clear indicator of the market impact of these advocacy efforts is the sustained prevalence of exclusive breastfeeding in key regions, which directly constrains the addressable market for formula. For instance, according to the British Specialist Nutrition Association, in 2024, approximately 29.3% of infants in England were exclusively breastfed at six to eight weeks of age. This figure highlights the effectiveness of public health messages in influencing parental feeding decisions, thereby creating a persistent barrier to the widespread adoption of lactose-free formula products during the newborn period.

Key Market Trends

The Integration of Human Milk Oligosaccharides (HMOs) represents a critical technological advancement in the sector, moving beyond simple lactose removal to actively replicating the complex immunological profile of breast milk. While standard lactose-free formulas prevent digestive distress, they historically lacked the prebiotic components necessary for establishing a healthy gut microbiome in immunocompromised infants. Manufacturers are now fortifying lactose-free recipes with bio-identical HMOs, such as 2'-Fucosyllactose, to selectively nourish beneficial gut bacteria and strengthen barrier function without introducing lactose. The economic viability of this high-value ingredient integration is evidenced by the robust performance of key suppliers; according to dsm-firmenich, February 2025, in the 'Full Year 2024 Results', the company reported total sales of 12,799 million EUR, driven significantly by the innovation-led growth of its Health, Nutrition & Care business unit which supplies these advanced nutritional components.

Simultaneously, the Adoption of Sustainable and Eco-Friendly Packaging is reshaping the market's operational landscape as regulatory pressure and parental environmental consciousness force a departure from traditional virgin materials. Companies are increasingly replacing conventional composite tins and plastic scoops with fully recyclable tinplate, bio-based plastics, and paper-based outer shells to reduce the carbon footprint associated with single-use infant nutrition products. This strategic pivot toward circular economy principles is proving to be a commercial differentiator rather than just a compliance cost. According to Danone, March 2025, in the 'Universal Registration Document - Annual Financial Report 2024', the group achieved a like-for-like sales growth of 4.3%, a performance attributed to the successful execution of its 'Renew' strategy which prioritizes sustainable value creation and environmental stewardship across its specialized nutrition portfolio.

Segmental Insights

The online distribution channel represents the fastest-growing segment in the global lactose-free infant formula market. This rapid expansion is driven by increasing consumer preference for convenience and the broader accessibility of specialized dietary products through digital platforms. Unlike physical retailers with limited shelf space, e-commerce sites offer extensive inventories, allowing parents to easily source specific formulations often recommended by healthcare professionals. Additionally, the availability of subscription services and detailed product information on these platforms supports this growth, ensuring consistent supply and informed decision-making for caregivers managing infant lactose intolerance.

Regional Insights

Europe maintains a leading position in the global lactose-free infant formula market due to a strong manufacturing infrastructure and high consumer awareness regarding digestive health. The region benefits from rigorous product safety standards aligned with scientific guidelines from the European Food Safety Authority, which fosters significant consumer trust. Furthermore, the presence of major nutrition companies facilitates wide distribution and consistent product availability. Increasing diagnosis rates of lactose intolerance among infants by healthcare professionals further sustain the demand, making Europe a central hub for the production and consumption of these specialized infant nutrition products.

Recent Developments

• In February 2025, Kate Farms expanded its specialized pediatric nutrition portfolio with the launch of a new organic strawberry flavor for its Pediatric Peptide 1.0 formula. This product was designed for children aged one to 13 years who experience impaired gastrointestinal function and require a plant-based, soy-free, and dairy-free nutritional option. The formula utilized hydrolyzed pea protein to facilitate easier digestion and was free from common allergens, making it a suitable choice for the lactose-free market. This product launch underscored the company's commitment to providing palatable and effective oral and tube-feeding solutions for children with dietary restrictions.
• In May 2024, Danone strengthened its position in the specialized nutrition sector by acquiring Functional Formularies, a US-based company known for its whole-food, tube-feeding products. This acquisition expanded Danone’s medical nutrition portfolio to include organic, plant-based, and dairy-free options suitable for pediatric and adult patients with intolerance or specific medical needs. The acquired product line is free from lactose, gluten, and soy, aligning with the increasing requirement for allergen-free nutritional solutions. This strategic move enhanced the company's ability to serve vulnerable patient populations requiring lactose-free medical nutrition.
• In April 2024, Else Nutrition Holdings Inc. executed a significant commercial launch of its plant-based infant formula in Australia, marking a strategic expansion into the Asia-Pacific region. The company introduced a follow-on formula designed for infants aged six to 12 months, along with a drink for toddlers. These products were formulated with whole-food ingredients such as almond, buckwheat, and tapioca, providing a clean-label, dairy-free, and soy-free alternative to traditional cow's milk formulas. This launch directly addressed the growing consumer demand for lactose-free and plant-based infant nutrition options in a market with high regulatory standards.
• In January 2024, two leading global biotechnology companies completed a merger to form Novonesis, a new entity focused on biosolutions. As a condition for regulatory approval of this transaction, the companies divested their lactase enzyme business to a major global taste and nutrition company. Lactase enzymes are a critical processing aid used in the manufacturing of lactose-free dairy products, including infant formulas, as they enable the hydrolysis of lactose for babies with intolerance. This strategic divestment and the formation of the new company significantly impacted the global supply chain for high-quality enzymes essential for producing lactose-free infant nutrition.

Key Market Players

• Nestlé S.A.
• Ausnutria Dairy Corporation Ltd.
• Valio Ltd
• Abbott Laboratories
• Bubs Australia Limited
• Danone S.A.
• Reckitt Benckiser Group PLC
• Perrigo Company plc
• Dana Dairy Group LTD
• Hero AG

By Product Type	By Sales Channel	By Region
Organic Conventional	Supermarket/Hypermarket Convenience Stores Online Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Lactose-free Infant Formula Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Lactose-free Infant Formula Market, By Product Type:

• Organic
• Conventional

• Lactose-free Infant Formula Market, By Sales Channel:

• Supermarket/Hypermarket
• Convenience Stores
• Online
• Others

• Lactose-free Infant Formula Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE