In recent years, India’s packaged flavored milk segment has been enjoying an increased level of interest and creating a significant amount of product innovation in the country, according to Mintel.
There are growing opportunities too. These include appealing to consumers who don’t have the time for a sit-down breakfast and are on the lookout for convenient food and drink options, as well as parents wanting healthy snacks for their children.
Given the growing health concerns in India today, urban consumers are swapping less healthy beverage options like carbonated soft drinks, and even juices, for flavored milk.
Research reveals that flavored milk products accounted for 43% of dairy drink introductions in India in 2016, up from just 20% in 2012, according to the Mintel Global New Products Database (GNPD). These products are still causing a stir, with flavored milk accounting for 39% of India’s dairy drink launches during the first half of 2017.
While the number of product launches in India is growing, so too are sales of flavored milk. Retail volume sales reached 72 million liters in 2015, up 31% from 55 million liters in 2012. Meanwhile, flavored milk retail value sales grew by 40% in the same time period, reaching Rs 800 crore in 2015, up from Rs 570 crore in 2012, states Mintel.
“Flavored milk has gained ground in India over the past few years, and most dairy players in the country feature some form of the flavored beverage in their product mix,” says Ranjana Sundaresan, global food and drink analyst at Mintel.
Non-dairy players enter space
There has even been innovation from companies that are not typically associated with the dairy space. Much of the category’s retail growth in India can be attributed to the fact that urban Indian consumers are opening up to value-added dairy, particularly for its convenience and health benefits. The popularity of packaged flavored milk in India is also due to consumers’ preference for assurance of safety, Sundaresan says.
Mintel research finds that 64% of pre-packaged ready-to-drink (RTD) dairy drink consumers in India agree that RTD dairy drinks are healthy and 48% say that dairy drinks provide them with energy. Over half (54%) of these consumers see them as convenient choices, while close to half (46%) agree this beverage type is hygienic.
“Given the growing health concerns in India today, urban consumers are swapping less healthy beverage options like carbonated soft drinks, and even juices, for flavored milk,” Sundaresan says.
Research also indicates that parents of households with adolescents are an opportunity for flavored milk manufacturers, as they are far more likely to recognize the health benefits and nutrients that come with pre-packaged ready-to-drink dairy beverages. There is potential for innovation on flavors, formats, and formulations that are in sync with what will appeal to children, while fulfilling nutritional requirements—an important feature for parents, Sundaresan adds.
What’s for breakfast?
Indeed, findings from Mintel show that seven in 10 (71%) Indian parents with children aged 13-17 find pre-packaged RTD dairy drinks healthy, while one in three (32%) think they are a good treat option.
Looking to the future, breakfast will grow as an occasion that dairy companies and manufacturers can tap into for opportunities. Mintel research has found that over one in four (28%) consumers of pre-packaged RTD dairy drinks consume dairy drinks for breakfast.
“Our research suggests that the breakfast occasion presents an opportunity for companies in the dairy industry, but currently very few launches highlight this positioning,” Sundaresan says.
In today’s fast-paced world, consumers don’t have the time for a sit-down breakfast, and are on the lookout for convenient food and drink options that keep them full and nourished while on the move, Sundaresan says.
“This opens up quite a few avenues for value-added, fortified, on-the-go dairy innovations that achieve satiety while providing consumers with their breakfast nutritional needs,” she explains.