Asia’s Low-Lactose Dairy Market

Sugar reduction and improved digestibility are creating opportunities in fermented and non-fermented dairy products in the Asia Pacific Region.


Innova Market sugar


People in Asia have little historical tradition for dairy. Even so, (Asia-Pacific) is now the major producer of milk products, and is expected to account for more than 60 percent of the new drinking milk sales between 2014-2019, according to Euromonitor. A number of factors appear to be driving this trend, including the shift in India towards industrialized packaged milk, and China’s increasing rates of dairy consumption. China has moved from not consuming milk to becoming the number one producer of milk globally. In fact, two of the largest producers in the world are now Chinese companies.

 

Globally, the backdrop for sales growth in the dairy category is a need for innovation. Following some years of sustained growth, the dairy industry has experienced a setback in terms of global new product activity, but even so, dairy launches still accounted for nearly 8 percent of total food and drink launches recorded by Innova Market Insights in the 12 months to the end of June 2016.

 

Facing currency volatility and low commodity prices, the dairy industry has seen turnover fall for many companies, and producers have responded by focusing on opportunities in emerging markets like Asia, and new value-adding innovations, which include:

  • new flavors like coffee or pear-spinach-ginger;
  • premium indulgence dairy desserts including sweetened dairy drinks;
  • collagen-enriched beauty yogurt, already known in Asia and spreading west;
  • convenient on-the-go foods for breakfast and snacks;
  • health claims such as less added sugar, low lactose, high protein, and the latest boom in sales of fermented foods and beverages containing probiotics for immune system support and digestive health, including drinking yogurt, kefir and lassi.

 

Less sugar, more digestive health

Interest in health and wellness claims has been increasing in recent years. The trend towards less added sugar has been driven by new pressure from scientifi c and offi cial bodies (including the World Health Organization) to reduce sugar consumption, combined with consumer desires to combat obesity, manage diabetes risks and avoid artificial sweeteners. In the dairy category, this is particularly relevant for drinking milk products, which are usually sweetened, perceived as healthy and highly popular in Asia.

 

Likewise, the latest trend – digestive health and immune support – is receiving more consumer attention. According to Innova Market Insights, ‘immune health’ took over the number one spot globally in 2016 in the supplement category, where earlier it was ‘overall health and wellness.’ The new focus on immune health is expected to spread from supplements to foods, and will bring new focus on fermented foods, including many dairy products popular in Asia, such as drinking yogurt and lassi.

 

Rising sales of low-lactose products

These trends are translating into rising sales of low-lactose dairy products both globally and in Asia-Pacific. Consumers who buy lowlactose dairy products not only include those who are actually lactose intolerant (rates of lactose-intolerance in Asia-Pacifi c are some of the highest in the world), but also include the much bigger group of people who perceive low-lactose dairy to be generally healthier.

 

Globally, sales of low-lactose milk have been growing much faster than ordinary milk – at around 12 percent year-on-year from 2012-2015 (compared with three percent growth for ordinary milk), according to Euromonitor International and Novozymes estimates.

 

Within Asia-Pacific, the same pattern can be seen. The Chinese market for low-lactose milk has been growing at roughly 13 percent since 2008, according to Euromonitor. Low-lactose sales in Australia and Korea are also growing, and Novozymes is expecting strong potential as well in India, Thailand and Vietnam.

 

New lactase technology

To address the rising interest in reduced-sugar and low-lactose dairy products, Novozymes has recently launched a new-generation lactase originated from Bifi dobacterium bifi dum, Saphera, that offers a number of advantages for production and quality of a wide range of milk and fermented milk products. The new lactase:

 

  • Supports claims of ‘less added sugar’, because sweetness increases as the lactase converts lactose into glucose and galactose. This allows producers to reduce the amount of added sugar while still maintaining the same level of sweetness.
  • Supports claims of ‘improved digestibility’ because the content of lactose, which can be diffi cult to digest, is lowered.
  • Is uniquely suitable for production of low-lactose yogurt and other fermented milk products due to its optimal pH and temperature profile.
  • Offers better-controlled lactose-reduction during production, i.e. lactose levels can be more precisely measured and easily reached.
  • Is a highly pure enzyme, especially important for milk products with long shelf-life.

 

Conclusion

While historically Asia-Pacific had little market interest in dairy products, today that has changed. Growing interest among health conscious consumers in Asia-Pacific for less added sugar and improved digestibility are creating new opportunities for producers in fermented and non-fermented dairy products. These have become increasingly easy to produce due to new lactase technology entering the market.