Flavored Milk Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global flavored milk market is forecasted to grow at a CAGR of 5.23% during the forecast period (2022 - 2027).

The COVID-19 pandemic hit the food and beverage market during the initial phase, but the industry did not see a decline because of the rising demand for different products in the market. The different companies manufacturing flavored milk took advantage of the situation and prepared products catering to changing consumer demand. For instance, in 2020, Amul launched a new flavored milk having tulsi and ginger. These drinks were prepared to boost immunity of individuals during the COVID-19 pandemic.

New developments in flavors and packaging are observed to be trending in the global flavored milk market, with companies introducing locally-preferred flavors. Additionally, there is a preference for fruit flavors among youngsters, which has led manufacturers to create new product innovations. Further, companies are also launching flavored milk varieties with enhanced functional properties to suit the need of the population.

Moreover, they are offering low-sugar and fat-free varieties of flavored milk products in order to tap into the increased diabetic and health-conscious population. Considering the opportunity posed by busier lifestyles and the need for convenience, companies are introducing on-the-go flavored milk in order to increase their offerings and customer base. The growth of the market is driven by the rising demand for non-alcoholic beverages, specially the ready-t-drink beverages.

Key Market Trends

Surging Demand for Ready-To-Drink Beverages

The fast-paced lifestyle of individuals have led to the surge in consumption of ready-to-drink beverages. Consumers are constantly looking for products that fulfill their dairy nutrition requirement, which they can have on-the-go. Owing to this trend, ready-to-drink product like flavored milk is much in demand among the consumers. Now-a-days, urban population is more interested in consuming flavored drink, as compared to carbonated drinks, because of the nutritional benefits associated with flavored milk. The flavored drink manufacturers are focused towards making the packaging convenient for the consumers to carry whereever they go, and attractive enough to attract younger population. Major players in the market are focused towards inducing innovation into their products by preparing organic flavoured milk, without having any artificial ingredients. Convenient packaging, coupled with natural product, is driving the demand for the product in the market. For instance, in 2021, Yeo Valley, the largest organic brand un the United Kingdom, launched a range of flavoured milk from organic milk. These flavored milks were made available in two flavors viz, chocolate, and raspberry, and do not contain any artificial sweetener, color, or flavor.

Asia-Pacific Being The Largest Market For Flavoured Milk

Asia-Pacific holds larger portion of the market, followed by North America region. With consumers opting for healthier and more nutritious food alternative, the demand for flavored milk is growing the the region. This has led to innovation in terms of flavored milk and the experimentation of new flavors. Furthermore, factors, such as efficient and sustainable dairy production in these countries are impacting the market’s growth. Additionally, companies have understood the demand for functional ingredients in flavored milk in this region. Moreover, they are catering to low or no sugar, and fat-free offerings, which caters to the further needs of the consumers. The manufacturers are focused towards creating products which cater to single-serving with small packaging, providing nutrition to the consumers in a convenient manner. The regional players invest in research and development to understand the regional demand, and extend their product portfolio in line with consumer's changing demand. For instance, in 2020, Wings Group Indonesia, a leading FMCG company in Indonesia, launched its ultra-high temperature (UTH) milk, in chocolate and strawberry flavors, extending the companies ready-to-drink product portfolio.

Competitive Landscape

The global flavored milk market is highly competitive with the presence of a few global players such as Nestlé S.A., The Hershey Company, Danone SA and Saputo Inc. and regional players like Dean Foods, Hiland Dairy, among others. Due to the dynamic nature of the market, it is fragmented. The companies are adopting strategies such as mergers and acquisitions, new product innovations and launches, expansions and partnerships. Companies also compete in terms of new variants of flavors and attractive packaging to attract the customers. There is ample scope for regional players to gain competitive advantage, provided that they bring in substantial innovation at ingredients and packaging levels, catering to the changing demands of customers.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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