Why the dairy beverage has a billion dollar market in India
Whether at home or out of home, dairy beverages have traditionally been a large part of Indian households. From a lassi to falovoured buttermilk, dairy beverages are available in many sizes, shapes and packets.BY Shwetha Satyanarayan | Jun 28, 2018 | comments ( 0 ) |
Although Indians’ palates have a liking for variety, milk is a staple that has takers from a toddler to a senior citizen. However, with millennials mostly choosing healthy snacks over junk, milk has been underserved as a functional drink. Trying to give a makeover to this ancient food, retailers like Amul, KMF and some startups like Goodness! are changing the way the dairy beverage serves the young consumers, writes Shwetha Satyanarayan
“Milk is mostly considered as a kid’s drink and we want to change the way millennials consume milk,” says Lakshmi Dasaka, co-founder of dairy beverage Goodness! The Bengaluru based startup has over 1 lakh loyal consumers who depend on an Oats smoothie or a flavoured yogurt when think of snacking something healthy. “Goodness! is a functional drink and not just a health drink,” reminds Lakshmi.
Whether at home or out of home, dairy beverages have traditionally been a large part of Indian households. From a lassi to falovoured buttermilk, dairy beverages are available in many sizes, shapes and packets. However, only 22% of the milk and dairy products consumed in India are in branded form, while branded dairy based beverages form a market size of Rs 1,280 cr growing at 30 per cent annually (as per 2016 reports).
“It is one of the fastest growing beverage segments in Indian market and is likely to become a billion-dollar (Rs 6000+ Cr) market by FY21 with three major categories – flavoured milk, chaas and lasi and functional yogurt drinks. Flavoured milk dominates the segment contributing 60 per cent (in value) to the branded dairy beverages segment,” says a consumer and retail study by Tata.
While brands like Cavins, Amul and even KMF are tapping the market with new products, the milk-based product segment is mostly underserved when compared to global counterparts, observes Lakshmi. “Although the new age consumer has evolved and his preferences are well-researched as they are connected to the global market in real time basis, there are only handful players in domestic market, while for example in the brewed cold coffee segment alone there could be some 50 other players in the USA,” she says.
New age brands like Keventers or Frozen Bottle may have entered the market aggressively and focusing on pan-India expansion, but they are indulgent drinks which may not appeal to the calorie-conscious consumer.
“There is huge shift in the trend the way a consumer wants to drink a milk-based product and keeping in tandem with the trend, we are eliminating sugar from all our products,” she says. Interestingly, Goodness! was also the only Indian finalist in the World Dairy innovations Award 2018. Its Oats smoothie won appreciation for innovation.
Changing consumer needs
So what does the millennial consumer expect when buying a dairy beverage? “Convenience, branding and natural,” the consumer and retail report suggests. “Consumers want something healthy and at the same time it should not take away most of their time in preparation of the drink. Also, they want branded drinks for on-the-go consumption instead of unhygienic, unbranded products. Meanwhile, milk is considered a healthy drink and all natural products like milk have the potential to appeal to the young consumer, who doesn’t prefer added sugars or artificial products,” it says.
Tapping new platforms
In a bid to be available at all times and everywhere even if a consumer can’t walk up to a supermarket to pick up a bottle of the drink, Goodness! has partnered with Swiggy to deliver their drink within 30 or 40 minutes duration. “We want to be an intersection of health and convenience. Further, we will also tap the impulse purchase market by being available in play arenas, multiplexes, airports and even work places and schools,” Lakshmi says.
Further, the report also predicts that there is market for such products in tier II cities and rural areas but new innovative packaging methods and new products can increase the demand for such products.
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