Indian consumers like their milk flavoured—more than ever. Food and beverage companies are launching more ready-to-drink flavoured milks in India, unlike experimental products a few years ago.

In 2016, about 43% of all new products introduced in the dairy drink segment in India was flavoured milk, according to a study by global market intelligence agency Mintel. In 2012, the number was just around 20%.

Flavoured milk may outpace ready-to-drink plain milk, in terms of new product introductions. Flavoured milk already accounts for more than 39% of all new products introduced in ready-to-drink milk segment during the first six months of 2017, noted the Mintel study released on Wednesday.

And, people are consuming more of flavoured milk. In 2015, Indians drank about 72 million litres of it, up 31% from 55 million litres in 2012, according to the Mintel study. The retail value of flavoured milk sold in India in 2015 was estimated at Rs800 crore, up from Rs570 crore in 2012, it added.

“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," said Ranjana Sundaresan, global food and drink analyst at Mintel.

The trend has caught the attention of multinational non-dairy companies, and in May, US food and beverages company PepsiCo Inc. ventured into the sector with ready-to-drink flavoured milk under the Quaker Oats brand. PepsiCo’s target is to get a bigger share of the breakfast market in urban India through these products, Mint reported on 6 May quoting Deepika Warrier, vice president (nutrition), PepsiCo India Holdings Pvt Ltd, the local entity of the American firm.

The Mintel study also noted about 28% of consumers of packaged ready-to-drink dairy products have them for breakfast.

“Breakfast presents an opportunity for companies in the dairy industry, but currently very few launches highlight this positioning. And, 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," said Sundaresan.

PepsiCo’s rival Coca-Cola Co. had already entered the ready-to-drink dairy market a year before PepsiCo. Coca-Cola sells ready-to-drink flavoured milk, among other dairy products, under the Vio brand in India.

Domestic companies are not behind. ITC Ltd and Tata Global Beverages Ltd have already announced plans to tap the value-added dairy segment which will include ready-to-drink flavoured milk. Biscuit-maker Britannia Industries Ltd sells flavoured milk under the Tiger Zor brand.

The dominant player in India’s dairy market, Gujarat Cooperative Milk Marketing Federation Ltd that owns the Amul brand has been selling flavoured ready-to-drink milk under the Amul Cool brand for the past few years. Other players such as Mother Dairy Fruit and Vegetable Pvt Ltd, Heritage Foods Ltd also sell flavoured ready-to-drink milk.

There’s a reason for companies launching more of such products. The Mintel research revealed that about 64% of ready-to-drink dairy drink consumers (1,243 adults aged 18-64 years) believe that the ready-to-drink products are a healthier option compared to fresh milk, 54% said these are convenient choices and 46% said ready-to-drink 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, adding that there was potential for innovation on flavours, formats and formulations that would appeal to children and meet their nutritional needs.