Consumer goods companies are increasingly looking to milk the potential of ‘white gold’, betting on one of the fastest-growing segments of India’s ready-to-drink beverage market: milk-based drinks.
The category isn’t new, but the way companies are selling it is changing. Hindustan Unilever Ltd, India’s largest consumer goods company, and Varun Beverages Ltd, PepsiCo’s largest bottler outside the US, are among those to have launched milk-based drinks that combine convenience with added protein and other functional benefits over the past two months.
The push reflects health-conscious consumers’ shift towards products that fit increasingly on-the-go lifestyles, while quick-commerce platforms are making it easier for newer brands and formats to reach them.
For Varun Beverages, dairy is already emerging as a faster-growing business. The category is expanding at more than 40% for the company and growing at three to four times the pace of its overall business, executive vice-chairman Varun Jaipuria said during its June-quarter earnings call.
The PepsiCo bottler reported 20.8% growth in the June-quarter revenue to ₹8,650.6 crore, while net profit rose 15.1% to ₹1,525.4 crore.
“Dairy as a category, we are very bullish on. We have been doing dairy as a category for many years now, and we are seeing huge growth coming,” Jaipuria said.
In July, the three-decade-old bottler partnered with Japan’s Asahi Group Holdings to introduce fermented milk drink Calpis in India, adding a new format to its value-added dairy portfolio.
Other consumer companies are following a similar playbook. Zydus Wellness Ltd has launched Complan Powerplay, a ready-to-drink protein milkshake, while expanding its Max Protein range.
Hindustan Unilever also launched Horlicks Milkshake in June, taking one of India’s best-known nutrition brands into the ready-to-drink category.
“Consumers want nutrition to fit into their routines rather than requiring them to create a routine around nutrition,” Tarun Arora, chief executive of Zydus Wellness, told Mint. “The barrier is increasingly not awareness or belief; it is friction.”
India’s flavoured milk drinks market grew to ₹7,600 crore in 2025 from ₹4,420 crore in 2021 and is said to reach ₹8,360 crore in 2026, according to data from market research and business intelligence firm Euromonitor.
Strategy consulting firm Redseer estimates that value-added dairy is growing at about 20% a year, faster than the broader ready-to-drink market. India’s ready-to-drink beverages market accounts for about 70% of the non-alcoholic beverages market and is growing at an estimated 18% compound annual growth rate, it said.
Untapped market
The opportunity extends well beyond protien-shake-buying urban consumers. Packaged dairy beverages have low household penetration, leaving companies room to convert consumption of homemade chaach, lassi and other drinks into branded, packaged formats.
“What is changing rapidly is the migration from homemade to packaged formats, driven by convenience, affordability, consistent quality and differentiated propositions such as probiotics and high protein,” Srideep Kesavan, CEO of Heritage Foods Ltd, told Mint.
Traditional products are central to that shift. Heritage saw volumes of buttermilk and lassi rise by more than 50%-60% during the summer, Kesavan said.
The growth suggests companies do not necessarily need to invent entirely new beverages—packaging, shelf life, flavours and added nutritional benefits can create a new market around products consumers already know.
Standalone dairy companies, too, are waking up to the opportunity. Parag Milk Foods Ltd entered the segment in May with Avvatar Protein Cold Coffee, a 250-millilitre drink containing 15 grams of protein and priced at ₹120.
It is seeking to move its Avvatar brand beyond athletes and fitness enthusiasts and make protein consumption part of everyday routines.
“Protein powder and ready-to-consume formats address different consumer behaviours,” Akshali Shah, executive director at Parag Milk Foods, told Mint. Powders are generally part of planned nutrition routines, while ready-to-drink products can be consumed while travelling, commuting, at work or between meals, creating additional occasions for consumption, she said.
The strategy is beginning to show up in the company’s numbers. Parag’s New Age Business, which includes Avvatar and premium dairy brand Pride of Cows, reported revenue of ₹118 crore in the June quarter, up 59% from a year ago and accounting for about 13% of quarterly revenue.
Milky Mist is also pushing deeper into value-added dairy. Its long-shelf-life portfolio, including milkshakes, lassi and buttermilk, contributed ₹883.7 crore to revenue in 2025-26.
There is also a financial rationale for the push. Rising milk procurement costs are encouraging dairy companies to move consumers towards higher-value products, while value-added beverages can offer better margins than liquid milk.
Heritage estimates such beverages can generate Ebitda margins around 4-5 percentage points higher than regular liquid milk, while Milky Mist said value-added dairy products can generate margins of 15%-40%, compared with 5%-8% for liquid milk. Ebitda stands for earnings before interest, taxes, depreciation and amortization.
Competitive landscape
Dairy drinks are also competing with bottled juices and, in some consumption occasions, carbonated beverages.
Ravi Kapoor, partner and leader for retail and consumer at PwC India, said the renewed interest in the category is being driven by the convergence of health, convenience and taste, as consumers increasingly scrutinize the nutritional credentials of conventional packaged drinks.
Redseer's August 2025 report said value-added dairy has a stronger presence online than in traditional retail, where greater visibility, premium positioning and impulse purchases are helping consumers discover newer formats. Online sales of non-alcoholic ready-to-drink beverages were projected to reach ₹5,000 crore in 2025.
But scaling the category will be challenging. Unlike many packaged beverages, milk-based drinks require companies to manage a more complex supply chain spanning milk sourcing, processing, shelf life and, for several products, cold-chain distribution. Companies must also compete for limited space in already crowded retail chillers.
Kapoor said the category’s growth opportunity will depend not just on consumer demand but on how effectively companies can solve these operational challenges and build distribution at scale. Longer shelf life and ambient-stable products could help reduce dependence on cold-chain infrastructure and expand the reach of milk-based ready-to-drink beyond large cities.