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Mintel: flavoured milk market in India doubles in four years

3 Aug 2017

New research from market intelligence agency Mintel reveals that flavoured milk products accounted for 43% of dairy drink introductions in India in 2016, up from just 20% in 2012.

In recent years, India’s packaged flavoured milk segment has been enjoying an increased level of interest, and this attention has brought about a significant amount of product innovation in the country, according to Mintel.

New research from the market intelligence agency reveals that flavoured milk products accounted for 43% of dairy drink introductions in India in 2016, up from just 20% in 2012, according to Mintel Global New Products Database (GNPD). In fact, it says, these products are still causing a stir, with flavoured 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 flavoured milk. Mintel research shows that retail volume sales for flavoured milk in India reached 72 million litres in 2015, up 31% from 55 million litres in 2012. Meanwhile, flavoured 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.

“Flavoured milk has gained ground in India over the past few years, and most dairy players in the country feature some form of the flavoured beverage in their product mix,” said Ranjana Sundaresan, Global Food and Drink Analyst at Mintel. “On top of that, 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 flavoured milk in India is also due to consumers’ preference for assurance of safety.”

Indeed, 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 flavoured milk,” said Sundaresan. “Our research also indicates that parents of households with adolescents are an opportunity for flavoured milk manufacturers, as they are far more likely to recognise the health benefits and nutrients that come with pre-packaged ready-to-drink dairy beverages. There is potential for innovation on flavours, formats and formulations that are in sync with what will appeal to children, while fulfilling nutritional requirements—an important feature for parents.”

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,” said Sundaresan. “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. 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.”