Flavoured Milk Market - Forecasts from 2024 to 2029

The global Flavoured Milk Market is expected to grow at a CAGR of 7.40% from a market size of US$53.32 billion in 2022 to reach US$87.93 billion in 2029.

Flavored milk is a category of sweetened dairy beverage made from milk, sugar, taste profiles, and sometimes food coloring. It can be offered as a pasteurized, refrigerated product or as an ultra-high-temperature treated product that does not need to be refrigerated. It can also be produced at home and in restaurants by combining flavorings with milk or as a pre-packed product on grocery aisles.

Manufacturers in the global flavored milk market offer new and creative products to cater to the growing demand for innovative flavors as customer preferences shift. This includes creating flavors that are popular in the region, giving fruit-flavored variations to appeal to younger customers, and presenting flavored milk with increased functional features. The market for flavored milk is categorized into various segments, including the type of flavored milk, distribution channels, and geographical regions.

Individuals are seeking to augment their diets with immune-boosting nutrients and enhance their gastrointestinal health by including fortified dairy products and alternatives with functional claims. Simultaneously, customers are increasingly drawn to functional items positioned to help them relax, sleep better, and boost their mood to cope with persistent uncertainty, worry, and anxiety.

Consumers are increasingly demanding functional flavored milk as a result. Moreover, rising health consciousness has led companies to launch low-sugar or sugar-free alternatives in the flavored milk category.

Market Drivers:

• Growing demand for new innovative and explosive flavor profiles is augmenting the demand for flavored milk products

Millennials also demand ethnic-inspired flavor profiles in flavored milk. Such items not only satisfy their taste senses but also provide them with the opportunity to learn about another culture. Tres leeches, shortcakes, figs, pear, pandan, and Thai chili are increasingly used in flavored milk as Asian, Mediterranean, and Latin American flavors combine well with dairy. For instance, in September 2022, Indian FMCG brand Godrej launched an RTD-flavoured milk called "Nutty Badam," replicating the famous ethnic Indian drink called Badam Doodh.

In recent years, plant-based milk products have flourished in the market exponentially. Plant-based flavored milk products face fresh competition as they develop new flavors and ingredients. Animal-free dairy milk, created from whey proteins generated by cellular agriculture, is also available in stores worldwide. This type of milk is lactose-free and cholesterol-free. The growing number of vegan and vegetarian populations is one of the primary factors driving the growth of plant-based flavored milk. In 2022, the Dutch dairy brand Chocomel owned by FrieslandCampina, launched the vegan version of its hugely popular chocolate milk in the United Kingdom.

• Millennials as the targeted audience

Flavored milk companies have continued introducing new beverages for the millennial demographic. This segment always seeks novel and intriguing flavors and sustainable ones since they are passionate about environmental concerns and enjoy diversity.

For instance, in April 2023, Wisconsin-based dairy company DARI LLC announced the debut of its new brand, MOO'VTM, an ultra-filtered, lactose-free whole milk beverage available in three delectable flavors. MOO'VTM is a high protein, low sugar beverage for kids.

Market Restraint:

• Price volatility as a major restraint

Despite its growth potential, the global flavored milk market encounters several challenges that hinder broader adoption and market expansion. One challenge lies in the perception that flavored milk may be costlier than plain milk or alternative beverages, particularly for consumers mindful of their budgets.

Additionally, mounting public health concerns regarding sugar consumption, particularly among children, prompt parents to seek healthier beverage options over sugary flavored milk. Moreover, the rising demand for clean-label products containing recognizable and natural ingredients can deter consumers from flavored milk perceived as overly processed.

Global flavored milk market segmentation by distribution channel into supermarkets/hypermarkets, convenience stores, specialist stores, online retail stores, and other distribution channels

The global flavored milk market is segmented by distribution channel, which includes supermarkets/hypermarkets, convenience stores, specialist stores, online retail stores, and other distribution channels. Supermarkets/hypermarkets have traditionally held the significant and most established share of the flavored milk market.

Convenience stores cater to impulse purchases and typically offer a smaller selection of flavored milk options compared to supermarkets. Specialist stores encompass outlets specializing in health food, organic products, or dairy products, providing a niche market for flavored milk consumers.

The online retail segment is witnessing significant growth, offering convenient access to flavored milk products and a potentially broader range of brands and flavors compared to brick-and-mortar stores. Other distribution channels encompass vending machines, gas stations, and various alternative retail formats, providing additional avenues for consumers to access flavored milk products.

APAC is anticipated to hold a significant share of the flavored milk market.

Asia Pacific region is anticipated to hold a significant market share in flavored milk. This region will experience rapid expansion throughout the projection period due to growing demand for new and innovative flavor profiles for milk products. Flavored milk is in high demand in markets such as India, South Korea, and China.

This region's market is also expanding due to the growing millennial population. This region's market is expanding due to changing eating habits and rising demand for healthy beverages. In addition, the prevalence of key market players such as Amul, Nestle, Danone, and others also spurs the growth of flavored milk in this region. The region is also experiencing various launches from niche brands with specialty products and giving tough competition to bigger well-established brands.

Market Developments:

• April 2023- Breaka, a Lactalis-owned flavored milk brand, collaborated with Perfetti Van Melle's Chupa Chups to offer a pair of limited-edition candy-flavored milk. Breaka Chupa Chups Strawberry & Cream flavor milk is inspired by the tastes of Chupa Chups' two best-selling lollipops. In contrast, Breaka Chupa Chups Choco & Vanilla flavored milk offers a creamy chocolate and caramelized vanilla taste.
• April 2023- Brownes Dairy introduced a new line of flavored milk emphasizing dairy's advantages by utilizing fresh full cream milk, natural flavors, no added sugar, no artificial colors or preservatives, and only the natural sugar in milk. The Vanilla and Chocolate Natural Flavoured Milk would first be offered in a 250ml bottle for on-the-go and a 1-liter carton for at-home use.
• April 2023- Bega Group introduced lactose-free versions of its Dare, Big M, and Dairy Farmers Classic lines. Lactose-free versions of Dare's best-selling double espresso and lactose-free chocolate-flavored milk from Dairy Farmers Classic and Big M are now available to consumers.

Market Segmentation:

By Type

• Dairy-Based
• Plant-Based

By Distribution Channel

• Supermarkets/Hypermarkets
• Convenience Stores
• Specialist Stores
• Online Retail Stores
• Other Distribution Channels

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• UK
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• China
• Japan
• India
• South Korea
• Indonesia
• Thailand
• Others