Dairy products provide immense health benefits and hence have become integral part of daily diet since the time of domestication of livestock animals. Lactose is the major carbohydrate of mammal milk, majority of the population over the age of five may develop lactose intolerance. It is a common disease and widespread in most of the population across the world. Dairy industry offers great variety of lactose hydrolyzed dairy foods (low or reduced lactose, or lactose free dairy products) to cater the lactose intolerant population. These products are prepared by hydrolyzing the regular milk with specific lactase enzyme. Lactose hydrolyzed dairy foods are nutritionally healthier than alternative lactose-free non-dairy products. The growing population of the lactose intolerance and the nutritional awareness has created more demand for the lactose hydrolyzed milk across the world. Western Europe and American subcontinents are the fastest growing lactose hydrolyzed dairy market. Asian population is more lactose intolerant signifies the huge demand. In general, lactose hydrolyzed dairy in the coming decade is anticipated to reach a compound annual growth rate of 7–8% indicating a huge market potential chiefly driven by the increasing incomes, dietary diversification and innovative dairy processing and marketing approaches.