Zenith Global 2014 Lactose Free Innovation Report

zenithinternational specialist consultants to the food and drink industries worldwide

Zenith Report Opportunity for Lactose Free Dairy 2012

STRATEGY & MANAGEMENT  MERGERS & ACQUISITIONS  COMMERCIAL & MARKET  OPERATIONS & TECHNICAL  WATER & GEOTHERMAL  ENVIRONMENT & CARBON  PACKAGING & DISTRIBUTION

Contents Introduction Methodology

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Lactose intolerance definition

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Geographic coverage

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Executive summary

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Category overview

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Prevalence of lactose intolerance

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Lactose levels by dairy product

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Technology & providers

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Market analysis

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3

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Market dynamics

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Key players & brands

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Lactose free milk opportunity

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Lactose free dairy opportunity (by country)

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Lactose free dairy opportunity map

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zenithinternational specialist consultants to the food and drink industries worldwide

Contents Market analysis (continued) Product launch considerations - 4Ps (product, price, promotion, place)

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Industry challenges

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SWOT analysis

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Country sections for 33 featured countries. Each country section includes: Dairy market volume 2011 (milk, yogurt, cheese) Dairy Per Capita Consumption 2011 Dairy market volume Compound Annual Growth Rate 2008-2011 Prevalence of lactose intolerance (estimated % & size of population) Potential size of lactose free dairy market (volume) Lactose free dairy key players & brands Lactose free dairy brand profiles (27 in total across all countries) Conclusion

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Lactose Intolerance Definition Lactose is the sugar found in milk. Lactase is an enzyme produced in the small intestine which breaks down the lactose into simple sugars, glucose and galactose, which are then absorbed into the bloodstream.

Individuals with a shortage of the lactase enzyme may fail to completely digest lactose. An excess of lactose relative to the lactase needed to completely digest the sugar is known as lactose maldigestion.

Lactose intolerance is the symptoms that may occur due to lactose maldigestion. Symptoms usually occur between 30 minutes and 2 hours after consuming lactose and can include flatulence, bloating, stomach cramps, diarrhoea, stomach rumbling, vomiting and nausea.

These symptoms are also present with other gastrointestinal problems and so lactose intolerance is often incorrectly self-diagnosed by people. Diagnostic tests, commonly the hydrogen breath test, can be carried out to determine if a person does have lactose maldigestion.

Not everyone who has lactose maldigestion experiences lactose intolerance symptoms. The occurrence of symptoms depends on factors such as the amount of lactose ingested and whether it was consumed with a meal.

NB: Lactose intolerance is not the same as a milk allergy which is a more serious condition where sufferers experience an immune response to milk proteins and must therefore avoid products containing dairy.

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zenithinternational specialist consultants to the food and drink industries worldwide

Lactose free dairy Geographic coverage This report examines the global lactose free dairy market, focusing on 33 key countries where the lactose free dairy market is already established, or countries where Zenith believes there is an opportunity for the lactose free dairy market to develop/grow given a high prevalence of lactose intolerance and/or where there is significant dairy consumption. These countries and regions are:  North America Canada; USA  Latin America Argentina; Brazil; Colombia; Mexico  West Europe France; Germany; Italy; Netherlands; Scandinavia (Denmark, Finland, Norway & Sweden); Spain; UK & Ireland  East Europe Czech Republic; Hungary; Poland; Romania; Russia; Ukraine  Asia Pacific Australia & New Zealand; China; India; Japan  Africa & Middle East Egypt; Saudi Arabia; South Africa; Turkey; UAE

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zenithinternational specialist consultants to the food and drink industries worldwide

‘Country’ Dairy market volume Country Population (million) Estimated prevalence of lactose intolerance (% of population) Estimated lactose intolerant population (million)

2011

Country

Milk

Yogurt

Cheese

TOTAL

Total volume 2011 (000 tonnes) Total PCC 2011 (kilograms) Volume CAGR % 2008-2011 Potential size of lactose free market (000 tonnes)

Commentary

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© Zenith International Ltd 2012

zenithinternational specialist consultants to the food and drink industries worldwide

‘Country’ Lactose free key players & brands Company

Brand

Lactose free products

Variants include

Alimentos Lácteos

Deleite Galego

Milk

UHT semi-skimmed, skimmed

Leche Celta

Celta Sin Lactosa

Milk

UHT

Covap

Covap Leche Sin Lactosa

Milk

Whole, semi-skimmed, skimmed

Grupo Leche Pascual

Leche Pascual Sin Lactosa

Milk

Whole, semi-skimmed, skimmed

Kaiku

Kaiku Sin Lactosa Plus

Milk; flavoured milk; cream; yogurt; cheese

Milk; flavoured milk - chocolate milk shake; cream whipping, cooking; yogurt - spoonable & drinking yogurt; cheese - gouda, emmental

Lactalis Puleva

Puleva Mañanas Ligeras

Milk

Semi-skimmed, skimmed

Commentary

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© Zenith International Ltd 2012

zenithinternational specialist consultants to the food and drink industries worldwide

Brand profile - Spain Kaiku - Sin Lactosa Plus (www.kaikusinlactosa.com) Company information: Kaiku was formed in 2004, and is present in Spain and in several Latin American and African countries. Kaiku sells a range of dairy products including milk, cream, butter, cheese, along with ‘functional’/enriched dairy products.

Product information: Kaiku uses technology licensed by Valio to produce a range of lactose free dairy products under the brand name Sin Lactosa Plus. Kaiku entered the lactose free market in 2005, with the first lactose free milk to be found in the Spanish market.

Variants: Products include a milk drink, available in whole, semiskimmed, skimmed; chocolate milk shake; cream - whipping, cooking; spoonable yogurt - natural, strawberry; and cheese gouda, emmental.

Price/distribution: Sample prices: milk 1 litre carton €1.49; gouda 150g €2.35; yogurt 4 x 125g pack €1.59.

Marketing profile: Kaiku Sin Lactosa has a dedicated website which has information regarding lactose intolerance, the benefits of dairy, and recipe suggestions. Tag line is ‘You like it; it suits you’.

The brand’s website states that it is supported by ADILAC, the association for lactose intolerance in Spain.

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© Zenith International Ltd 2012

zenithinternational specialist consultants to the food and drink industries worldwide

zenithinternational specialist consultants to the food and drink industries worldwide

A full list of Zenith’s industry reports can be found here or for a tailor made study specific to your requirements, please telephone Esther Renfrew on +44 (0)1225 327900 or email misales@zenithinternational.com.

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STRATEGY & MANAGEMENT  MERGERS & ACQUISITIONS  COMMERCIAL & MARKET  OPERATIONS & TECHNICAL  WATER & GEOTHERMAL  ENVIRONMENT & CARBON  PACKAGING & DISTRIBUTION