South America Lactose Market Size, Share & COVID-19 Impact Analysis, By Application (Food, Feed, Pharmaceuticals, and Infant Formula {Dry-blend, Wet-Blend}), By Color (Yellow, Pale-Yellow to White, and White), By Purity (Crud, eEdible, and Refined Edible), and Regional Forecast, 2023-2030

The South America lactose market size was valued at USD 80.8 million in 2022. The market is projected to grow from USD 62.7 million in 2023 to USD 121.6 million by 2030, exhibiting a CAGR of 9.9% during the forecast period.

Lactose is a disaccharide sugar naturally found in milk. It is a byproduct of cheese and is majorly extracted from whey during the manufacturing process. Its physiological and functional characteristics have made it one of the major dairy ingredients, as it can be used in the food and pharmaceutical industry. The growing focus of pharmaceutical industries on the expansion of their manufacturing facilities in South America due to their increasing use in the manufacturing of drugs is majorly contributing to their demand in the region.

• For instance, according to an article published by the European Medical Group LTD., in June 2022, Brazil is perpetually appearing in the list of top 10 global pharmaceutical markets since the last decade and is constantly making steady progress.

The increasing demand for these products in the manufacturing of infant-grade formula due to its optimal digestion and its requirement for the synthesis of glycogen in infants is further contributing to the growth of the market. Furthermore, a decrease in the number of mothers breastfeeding their children is further contributing to the growing demand for infant formula products in the market. According to an article published by the National Library of Medicine in August 2020, around 71.0% of mothers continue to breastfeed their child for the first year of life, which further drops to 45.0% when the child turns two years of age.

In 2023, the market experienced a decline in its revenue, which was attributed to a significant drop in the prices of lactose despite the moderate growth in consumption. The market is expected to normalize over the forecast period, owing to the gradually increasing demand for high-quality lactose by pharmaceutical and infant formula manufacturers.

COVID-19 IMPACT

Constant Demand for Lactose from Pharmaceutical and Infant Formula Manufacturers Contributed to Market Growth

The impact of the COVID-19 pandemic on market growth was positive in 2020. Companies manufacturing dairy foods and ingredients remained unaffected during the COVID-19 pandemic as they were considered an essential part of food. Many of the major companies operating in the dairy market reoriented their procurement and processing toward solid dairy products. This factor did not hinder the production process and supply of lactose.

South America Lactose Market Trends

Growing Demand for Lactose from the Sports Nutrition and Animal Feed Industry 

Lactose has become an integral part of the medical nutrition industry due to its controlled and easily digestible properties. It also plays an important role in supporting the nutritional needs of patients undergoing medical treatments such as gastrointestinal diseases.

The clinical benefits offered by these products in boosting the energy of athletes engaged in intense physical activities and their extended assistance in the recovery of fitness enthusiasts in their post-exercise recovery sessions have majorly contributed to its growing demand from the sports nutrition product industry.

Moreover, the increased focus on physical wellbeing among the general population is further contributing to its increasing demand for dietary supplements in Brazil, Argentina, and other countries. For instance, according to an article published by NCBI in May 2021, approximately 50.0% of the adults in Brazil consume dietary supplements, among which two-thirds are consuming vitamins and minerals.

The growing recognition of the nutritional benefits offered by lactose and the significant advancements in the animal nutrition practices of the Brazilian animal feed industry is propelling the demand for lactose in feed products. According to the statistics published by Misset Uitgeverij B.V. in February 2023, feed production for all species in Brazil reached 81.8 million tons in 2022, witnessing a growth of 1.3% compared to the previous year. Therefore, the increasing demand for high-quality feed products among farmers is further anticipated to boost the South America lactose market growth.

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South America Lactose Market Growth Factors

Emphasis of Infant Formula Manufacturers on Capacity Expansion to Drive Market Growth

The versatility and compressibility provided by lactose in the manufacturing of various drug formulations have made it one of the widely used excipients in the pharmaceutical industry. For instance, according to an article published by the National Center for Biotechnology Information (NCBI) in September 2021, lactose is among the largest excipients used by volume in the pharmaceutical industry. It constitutes around 60-70% of all pharmaceutical dosage forms.

The rising prevalence of various diseases and the lack of accessibility to regular and essential medicines in the region have brought opportunities for pharmaceutical companies to expand their business. In addition, the transparent regulatory framework established by the governments of various countries of the region has encouraged many foreign investors to establish their pharmaceutical companies in the developing countries of the region.

• According to an article published by the International Trade Administration in January 2024, pharmaceutical facilities located in Uruguay are manufacturing 61.0% of their products for the domestic market and the remaining 39.0% for export to other countries.

In recent years, Argentina, Brazil, and other countries in the region have witnessed a significant increase in the demand for lactose from infant formula manufacturers due to its sweetening and stabilizing properties.

These factors, coupled with the increasing focus of the market players on developing novel drug therapies and infant formula products for the growing population of the region, contribute to the growing product demand.

RESTRAINING FACTORS

Rising Prevalence of Lactose Intolerance May Limit Market Growth

The growing prevalence of lactose intolerance in the region poses a significant threat to the growth of the market in the region. It is a condition in which an individual lacks the enzyme lactase, which is essential for the proper digestion of lactose. According to an article published by the World Population Review in January 2024, the prevalence of lactose intolerance in Brazil has risen to 60.0%. The article also stated that the condition is estimated to affect 56.0% of the population of Chile.

The rising awareness of this condition among the growing population of South American countries is contributing to the increase in the number of people seeking lactose-free alternatives. This increased preference toward lactose-free products has impacted the consumption pattern of the ingredient, hampering its demand in the market. The preferential shift of consumers has contributed to increased competition among players for the launch of new products that are lactose-free. Besides, companies are exploring alternative ingredients that can cater to their increasing demand in the market.

• For instance, in December 2022, NotCo, in collaboration with Dunkin, launched plant-based NotDonuts and NotMilk, lactose products at all their locations in Chile.

South America Lactose Market Segmentation Analysis

By Application Analysis

Infant Formula Segment Dominated due to Increased Launches and Adoption of Infant Grade Products

On the basis of application, the market is segmented into food, feed, pharmaceuticals, and infant formula.

The infant formula segment held the largest share in 2022, owing to the increasing launch of new dry-blend infant formula products in the market. Moreover, the increasing focus of key players on expanding their manufacturing capabilities to meet the growing demand for infant formula products is expected to propel the segmental growth.

The pharmaceuticals segment is expected to grow at the fastest rate during the forecast period. The growing focus of foreign investors on the expansion of their geographical presence in the region is driving segmental growth. Moreover, the increasing use of these products as an ingredient in the manufacturing of tablets and dry powder inhalers is further contributing to their growing demand in the region.

• For instance, according to an article published by Sindus Pharma in November 2020, the pharmaceutical industry in Brazil grew by 6.0% in 2020. This constant and rigorous growth of the pharmaceutical industry in the region is propelling the product demand in the market.

The food segment is anticipated to register moderate growth during the forecast period. A pivotal growth in the demand for edible grade lactose for the manufacturing of food products such as ice creams and bakery products is primarily contributing to the expansion of the market in the region. In addition, its increasing use in the preparation of confectionaries is due to its advantages, such as its ability to enhance flavor, texture, and stability. Moreover, its growing use in bakery products for maintaining good shelf life, quality, and versatility of the end product is further contributing to the growth of the food segment.

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By Color Analysis

Pale-Yellow to White Segment Dominated the Market Owing to its Growing Demand for Infant Formula Production 

On the basis of color, the market is segmented into yellow, pale-yellow to white, and white.

The pale-yellow to white segment held the largest South America lactose market share and dominated the market in 2022.  This dominance is attributed to its slightly sweet taste and its smell, similar to milk. This texture and flavor of the pale-yellow to white color lactose have contributed to its increased use in the manufacturing of infant formula. Moreover, the increasing use of infant formula products due to their nutritional benefits has encouraged manufacturers to expand their production capabilities to meet the growing demand for these products in the region.

Furthermore, there has been a continuous growth in the application of pale-yellow to white lactose in the food industry. This is due to its flavor, sensory sweet taste, and ability to maintain the consistency of the bakery and confectionary products, which is expected to boost segmental growth.

The white segment is projected to grow at the highest CAGR during the forecast period. The growing focus of pharmaceutical companies on the expansion of their presence in South American countries is majorly contributing to the rising demand for white lactose in the market. In addition, manufacturers' strong focus on expanding their customer base by participating in international conferences is further driving segment growth.

• For instance, in May 2019, MEGGLE GmbH & Co. KG, demonstrated their expanded range of lactose at the FCE Pharma Expo in Sao Paulo, Brazil. Their product range includes lactose that can be used in the production of dry powder inhalation (DPI).

By Purity Analysis

Increasing Use of Refined Edible Lactose for Manufacturing of Infant Formula Boosts Segment Growth

On the basis of purity, the market is segmented into crude, edible, and refined edible.

The refined edible segment held the largest share and dominated the market in 2022. The growing demand for refined edible lactose for the manufacturing of infant formula majorly contributes to the segment growth during the forecast period. In addition, the increasing focus of generic pharmaceutical companies on expanding their business to the developing countries of the South American region is further propelling the segment growth.

For instance, according to an article published by the Walsh School of Foreign Service in March 2021, Brazil and Argentina are becoming manufacturing destinations for many pharmaceutical companies. These investments by pharmaceutical manufacturers are expected to increase the demand for refined edible lactose in the region during the forecast period.

The edible segment held the second largest share of the market and is projected to grow at a significant rate during the forecast period. The growing application of edible lactose in the manufacturing of edible preparations such as chocolates, ice cream, and bakery products, along with its increasing use in the manufacturing of other confectionary derivatives, majorly contributed to the segmental growth.

The crude segment is projected to grow at a considerable growth rate during the forecast period. The growing product application in animal feed due to its ability to reduce acidity in mammalian and poultry animal feed is projected to contribute to the growth of the segment.

REGIONAL INSIGHTS

Based on geography, the market is segmented into Brazil, Argentina, and the rest of South America.

On the basis of country, Argentina held the largest market share in 2022 and generated a revenue of USD 35.0 million in the same year. The factors contributing to its highest share are the constantly growing demand for lactose from infant formula manufacturers and its increasing application in the food industry. This demand is due to the ability to maintain the required texture and consistency in end food products, which contributes to the growth of the market in the country. In addition, the growing focus of pharmaceutical manufacturers on expanding their geographical presence in the country boosts market growth.

• For instance, according to an April 2023 press release by Verdict Media Limited, Sucesores de Alfredo Williner, a dairy product manufacturer, was acquired by Savencia Fromage & Dairy. Savencia Fromage & Dairy provides lactose supply to the market through its subsidiary Armor Pharma.

Brazil held a considerable share of the market in 2022. The expansion of pharmaceutical companies in the country, along with increased manufacturing of infant formula, are some of the factors propelling the South America lactose market growth.

The rest of the South America market is projected to grow at a considerable growth rate during the forecast period. The increasing number of food processing industries, along with the growing focus of the dairy industry on exporting their products to nearby countries by expanding their product portfolio, further drives the growth of the market in the sub-region.

List of Key Companies in South America Lactose Market

FrieslandCampina held a Significant Market Share Due to its Increasing Product Portfolio

The South America lactose market is a partially consolidated market comprising a significant number of players with a range of products in different purity forms. The growing focus of FrieslandCampina on expanding its range through the launch of new products contributes to its growing share in the market. Their strategic sales initiatives aid them in strengthening their position and make them one of the top players in the market. Moreover, the companies’ strong distribution network in the region further strengthens their market dominance.

Fonterra Co-operative Group Limited held a considerable share of the market in the year 2022 as they have manufacturing facilities and a distribution network in the region. Their growing focus on manufacturing lactose with purity rates of 99.5% and 99.8% makes them one of the strongest players for pharmaceutical grade lactose.

The growing investment of other players such as MEGGLE GmbH & Co. KG, Arla Foods Ingredients P/S, Lactalis Ingredients, and DFE Pharma in the expansion of their product portfolio by launching infant formula and pharmaceutical grade lactose further contributes to their growing share in the future.

LIST OF KEY COMPANIES PROFILED:

• FrieslandCampina (Netherlands)


• DFE Pharma (Germany)


• Arla Foods Ingredients Group P/S (Denmark)


• MEGGLE GmbH & Co. KG (Germany)


• Kerry Group plc (Ireland)


• Glanbia PLC (Ireland)


• Lactalis International (France)


• Fonterra Co-operative Group Limited (New Zealand)

KEY INDUSTRY DEVELOPMENTS

• October 2023: Arla Foods Ingredients planned to expand its manufacturing capabilities of protein and infant formula products in Argentina. The investment was majorly aimed at meeting the growing demand for infant formula products in the region.


• October 2023: Lactalis Ingredients launched Lactalpha to the global market, including South America. Lactalpha is a wide range of pharmaceutical grade lactose whose launch is aimed at entering the pharmaceutical market to meet its growing demand.


• July 2022: DFE Pharma, a provider of pharma and nutraceutical excipient solutions, launched Lactohale 400 and expanded its Dry Powder Inhalation (DPI) portfolio.


• September 2021: Arla Foods Ingredients launched Lacprodan MFGM-10, a milk fat globule ingredient for the manufacturing of infant formula products. The product has been launched across the globe, including the South American market and is available in a dry blend option.  


• January 2020: FrieslandCampina, in collaboration with CVC Capital Partners, acquired 50.0% of DFE Pharma shares.

REPORT COVERAGE

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The report provides a comprehensive market analysis. The report covers key aspects, which include an analysis of the segments by color, region, application, and purity. Furthermore, the reports offers an analysis of the market dynamics, competitive landscape, and key insights such as pricing analysis and price comparison of these products for different segments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market over recent years.

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