Flavoured Milk An Overview

Report- Studying the Product and the Market

Introduction
Thirsty?? You dont have to rely anymore on the cokes and pepsis of the world. Here is a
drink that will not only quench your thirst but will also provide you with high nutritional
value. Flavoured Milk, in a variety of flavors appeals to the taste buds and is definitely a
promising product.
The study reveals the basic understanding of the category, the ingredients, the target
group and the overall market scenario keeping in mind the already existing brands in the
Indian market.

Milk The Global Scenario

Milk is as ancient as mankind itself, as it is the substance created to feed the mammalian
infant. All species of mammals, from man to whales, produce milk for this purpose.
Many centuries ago, perhaps as early as 6000-8000 BC, ancient man learned to
domesticate species of animals for the provision of milk to be consumed by them. These
included cows, buffaloes, sheep, goats, and camels, all of which are still used in various
parts of the world for the production of milk for human consumption.
The availability and distribution of milk and milk products today in the modern
world is a blend of the centuries old knowledge of traditional milk products with the
application of modern science and technology.
The role of milk in the traditional diet has varied greatly in different regions of the world.
The tropical countries have not been traditional milk consumers, whereas the more
northern regions of the world, Europe (especially Scandinavia) and North America, have
traditionally consumed far more milk and milk products in their diet.
World-wide Milk Consumption and Production
The total milk consumption (as fluid milk and processed products) per person varies
widely from highs in Europe and North America to lows in Asia. However, as the various
regions of the world become more integrated through travel and migration, these trends
are changing, a factor which needs to be considered by product developers and marketers
of milk and milk products in various countries of the world.
Even within regions such as Europe, the custom of milk consumption has varied greatly.
Table 1 illustrates milk per capita consumption information from various countries of the
world. Several trends can be observed from these data. Consider for example the high
consumption of fluid milk in countries like Ireland and Sweden compared to France and
Italy where cheeses have tended to dominate milk consumption.

Table 1. Per Capita Consumption (kg) of Milk and Milk Products in Various
Countries, 2000 data.
Country
Fluid Milk
Cheeses
Ireland
163
7.0
Sweden
157
16.6
UK
117
9.7
Netherlands
101
14.6
France
68
23.2
Germany
63
12.8
Italy
63
20.6
USA
97
14.0
Canada
90
11.6
Australia
102
11.1
India
33
Japan
39
1.8
China
2
Source: Agriculture and Agri-Food Canada.

Butter
4.0
1.5
3.0
3.1
8.8
6.7
1.7
2.0
2.6
3.2
1.9
0.6
-

The next table shows the quantity of raw milk produced around the world. Over half
of the milk produced comes from Europe while fully 3/4 of the world milk is produced in
Europe and North America.
Table 2. Cow milk production in selected countries in the world (2002).
India
79,855
United States
74,343
Russia
32,304
Germany
26,930
France
24,298
Brazil
21,848
New Zealand
13,513
China
12,546
Poland
11,367
Italy
10,932
Netherlands
10,422
Australia
9942
Mexico
9542
Argentina
8200
Canada
7300
Source: Agriculture and Agri-Food Canada

Milk An Overall Picture in India

In 1998 India became the largest producer of milk in the world. It is also the largest
consumer. Neither position is likely to change in the foreseeable future. The
Operation Flood program launched in 1970s brought up the milk production from 22
million tons in 1970 to 88 million tons in 2002-2003. Milk production continues to
grow at the rate of 4% per annum as against a global growth rate of 1.1% per
annum. From being a major importer of dairy products in the 1950s, India has now
become an exporter. Milk has become Indias most important farm commodity.
National requirement will be as high as 173 million tones by 2020. However
Milk productivity per animal in India (1,250/lactation) is still very poor compared to
international levels (2,038 kg/lactation) due to gradual breed deterioration.
There are still large disparities in milk availability across various income groups as well
as regions leaving enough room for growth. Demand for milk is expected to reach 120
M.T. by 2010.

India's milk production increased from 21.2 million MT in 1968 to 88.1

million MT in 2003-04.

Per capita availability of milk presently is 231 grams per day, up from 112
grams per day in 1968-69.

India's 3.8 percent annual growth of milk production surpasses the 2 per
cent growth in population; the net increase in availability is around 2 per
cent per year.

The annual value of India's milk production amounts to about Rs. 880
billion.

The Operation Flood (OF) programme initiated by NDDB in 1970 was a

planned attempt to revive India's Dairy Industry from a premature stagnation. The
OF programme not only propelled the growth of dairy development in India, it
also helped India become the world's largest milk producer.

Perspective 2010 another programme launched by NDDB focuses on four key

areas. These include Strengthening Cooperatives Business, Production
Enhancement, Assuring Quality and creating a National Information Network.

Ingredients- Flavored Milk

Like unflavored milks, flavored milks are nutrient dense foods containing a high
proportion of nutrients. Flavored milks have an excellent nutritional profile, providing
significant amounts of high quality protein, calcium, riboflavin, magnesium,
phosphorus, niacin equivalents, vitamin B12, vitamin A, and, when added, vitamin
D, as well as several other essential nutrients.

In general, flavored milks are milks to which a sweetened flavors such as cocoa or cocoa
powder, strawberry or vanilla extract has been added, along with a sweetener such as
sucrose or high fructose corn syrup. Federal standards for pasteurization, vitamin
addition, milk solids, and milk fat levels are the same for flavored and unflavored milks .
Chocolate milk has higher total carbohydrate content due to the addition of sucrose.
Chocolate milks contain about 2 to 4 teaspoons more sugar and about 60kcal more energy
per 8-ounce servings than their unflavored counterparts.
Chocolate milk contains a small amount of caffeine and theobromine.
Chocolate milk also contains a small amount of oxalic acid, a compound occurring
naturally in cocoa beans and other plants.
Nutrient Contribution
Recognizing children's low calcium intake, experts agree that the best way to meet
calcium needs is to consume foods naturally containing calcium. Chocolate and other
flavored milks are foods that naturally contain high levels of calcium. Vitamin D
enhances the body's absorption of calcium and helps to prevent rickets.
Flavored milks are available in whole to nonfat varieties. Flavoured milk is highly
recommended by the Pediatrics in the western countries because of their excellent
nutritional value. They act as supplements to the diet of children and are enjoyed by them
because of the delicious flavors.
Flavors
In the west many varieties of flavored milks, including chocolate, strawberry, vanilla,
banana, black raspberry, blueberry, root beer, cappuccino, and coffee, are available.
Chocolate milk, however, has long been the most popular flavored milk consumed. In
India, the flavors available are rose, coffee, kesar, elaichi, chocolate, strawberry, vanilla
and mango.

Health and Behavioral Concerns

Despite its high nutritional value people have expressed concern that the consumption of
flavored milk can have adverse effects on health. Flavored milks generally contain more
sucrose and high fructose corn syrup than their unflavored counterparts. People have
speculated that it can lead to problems such as dental caries, behavioral disorders (e.g.,
hyperactivity, learning problems, and antisocial behaviors), obesity, and diabetes.
However, scientific evidence fails to support these allegations, with the possible
exception of dental caries. However, chocolate milk's moderate amount of sucrose is no
more likely to cause dental caries.
Chocolate milk contains a small amount of caffeine per serving compared to many other
beverages. However there is no negative effect of caffeine on children if consumed at
reasonable levels. Chocolate milk also contains small amount of theobromine. At usual
intakes of theobromine, no adverse behavioral effects in humans have been reported.

Calcium absorption from chocolate milk is similar to that from unflavored milk and other
calcium-containing foods. People with lactose maldigestion may tolerate chocolate milk
more easily than unflavored milk
Study Shows Kids Get More Calcium with Flavored Milk
Drinking Flavored Milk Gives Kids More Calcium Without Increasing Fat and Added
Sugar Intakes In Their Diets

Long known to be a favorite among children, flavored milk gives moms something to
smile about, too. According to a study published in the Journal of the American Dietetic
Association (JADA), children who consume flavored milk drink more milk and have
higher calcium intakes than those who dont. In light of the fact that most children
arent meeting current calcium recommendations, flavored milk is tasty and nutritious
way to help ensure kids get the calcium their growing bodies need.
The study researchers evaluated data from USDAs Continuing Survey of Food Intakes
of Individuals (CSFII) to determine the typical beverage intake of 3,888 children (2,763
ages 5-11 and 1,125 ages 12-17). The results showed that children who drink flavored
milk consume fewer nutrient-void soft drinks and fewer fruit drinks (those containing less
than 10% fruit juice) than children who dont drink flavored milk.
And contrary to popular belief, the study concludes that giving kids flavored milk adds
to their nutrient intake without giving them more fat and added sugars.
While many moms may be concerned that flavored milk increases their childs added
sugar intake, this study shows that flavored milk actually boosts their overall calcium
intake, without increasing their total added sugar intake, said Rachel Johnson,
Ph.D., M.P.H., R.D., professor of nutrition at The University of Vermont and the
studys lead author.
INDIAN MARKET
AMUL
The Launch- Amul's range of flavoured milk, which was launched recently across western
India, was creating major inroads in the marketplace where it had found acceptability
cutting across the urban-rural divide, said Mr Rajneesh , Depot-in-Charge, Gujarat Cooperative Milk Marketing Federation (Pune),
"In the six weeks since the launch in Pune city alone, we have sold over 3,25,000 bottles
of the flavoured milk and are finding huge response in rural places such as
Nandurbar, Kolhapur, Satara," he said.
Plans were now being firmed up to rapidly roll out the product, into all the major
metros, he said. Bottling arrangements were now being put in place. In Maharashtra,
Amul was setting up two new bottling plants, one at its existing facilities at Nagpur and
another one at a location near Mumbai to cater to the huge market in the metropolis.
"Our target is to sell a million bottles of flavoured milk every day within the next
one year'', he said.

Ready for a rollout in the Gujarat, Mumbai and Delhi markets in a matter of days is
Amul Shakti, the flavoured milk that has been under various stages of development since
1996.
Talking to Business Line, Mr B.M. Vyas, Managing Director, GCMMF, said the latest
offering from the Amul stable has already been test-launched in select outlets a few
weeks ago and it had received good response.
The first phase of the launch is already under way with five bottling centres operational
and another four would be ready by month-end, he said.
"This one product has taken six years to reach the commercial launch stage and now, we
have an installed capacity of three lakh bottles per day. The milk drink comes in
specially designed bottles that can be thrown away by the consumer after use, thus
tackling a major logistical aspect in the supply chain called the backward movement of
the container.
Importantly, it has a minimum shelf-life of 90 days at room temperature, and it could
easily last for double that period", Mr Vyas said. While each bottle costs GCMMF Rs 2,
Amul Shakti is priced Rs 8 per 200 ml bottle in Gujarat. And doubling up as bottling
centres of the flavoured milk are the co-operative dairy plants at Anand, Ahmedabad,
Vadodara, Surat, Godhra, Mehsana and Rajkot.
Though it has been priced Rs 10 outside Gujarat, the two bottling centres at Nagpur
and Mumbai give an inkling of things to come. The GCMMF has set itself a target of
selling one million bottles per day in the next couple of seasons.
In a bid to cover its flanks, as it were, the `Taste of India' will also be available in the
form of sweet lassi this season.
Branded Amul Lassee, and initially being served in two flavours, rose and kevda, it is the
Mehsana dairy that is manufacturing `Mast Dahi' that has been assigned the target of
converting 50,000 litres of milk per day into lassi. The downside is that it requires
refrigerated storage and even then can boast of a shelf-life of not more than 10 days.
However, the marketing think-tank at Amul has contrived to package the product in such
a fashion that the 500 ml PET bottle in blue looks quite similar to some of those currently
offered by the soft drink majors. And the USP here, as in any other Amul product, is the
price tag. At Rs 10 per 500 ml bottle and at Rs 8 per 300 ml bottle, Amul Lassee seems to
have given an option for the milk guzzlers. With the Amul platter getting a more rounded
look as it strives to become a complete food company (ready for launch in May is the
Amul soup), it appears as if the GCMMF can do no wrong.
Report Friday, Apr 25, 2003

In a bid to appeal to the youth, GCMMF Amul has replaced its staid looking
flavored milk brand Amul Shakti with a new brand Amul Kool. While the
formulation is the same, Amul Kool is being pitched as a cool, happening, trendy
drink targeting primarily the teenagers, a segment the company feels has become
disillusioned with colas and is looking forward to nutritional and healthy drinks.
The research revealed that teenagers are increasingly looking out for nutrition and
health based drinks.
GCMMF has packaged the product in such a fashion that has an advantage over other
flavored milk in the country. The milk comes in specially designed glass bottles that
can be thrown away after use.
The flavored milk market has lately been active with food majors joining the fray.

Mr. Sodhi, GM , GCMMF believes that the category has not been exploited so far.
Though there have been several players at a regional level, activity at the national level is missing.New
Delhi, December15,.2003

Amul has planned to its brand of flavored milk, kool, in trendy tetra packs. Amul
had preferred to launch the flavored milk earlier in bottles because it believed that a
consumer can see and feel the product rather than in the tetra pack But after the launch of
the tetra pack last week, Amul said that tetra packs are much more convenient.
Transportation of bottles to some locations is also difficult.
He added that tetra packs are trendy and are preferred by the youth, teenagers and
children who are getting away from the cola based soft drinks.
Amul is the market leader in the flavored milk segment with over 90%market
share.
With Amul Kool in cool tetra packs Amul plans to woo the young generation with a
combination of nutrition and taste.
Mumbai,April 8,2004

Available Flavors
AMUL KOOL
Rose, coffee, kesar and elaichi, strawberry, chocolate and mango.

Price
Rs.8 in Gujarat (200 ML)
Rs.10 other states.(200ML)

Gujarat Co-operative Milk Marketing Federation (GCMMF)

B M Vyas, MD of Gujarat Cooperative Milk Marketing Federation (GCMMF) had
estimated in late 2001, that the contribution from value added products like pizza, lassi
and flavored milk would double from 15 per cent to 35 per cent. Out of the entire milk
procured, approximately 40 per cent is sold as liquid milk and 60 per cent is converted to
value added products. Pizzas had been estimated to sell 100,000 pieces a day. Flavored
milk and ice cream continued to be touted as success stories.

BRITANNIA
The LaunchThough flavored milk was a lackluster performer, the company has relaunched
flavoured milk under the Milkman banner with innovative offerings such as cold coffee
and sweet lassi.
Sunday, February 11, 2001

Britannia had diversified into dairy products in 1997 and is present in the cheese, dairy
whitener, butter, ghee, liquid milk and flavoured milk segments under the Britannia
Milkman brand name. The dairy business of Britannia accounts for around 13 per
cent of its Rs 1,332-crore turnover.

The company's diversification into dairy business has been fairly successful. Dairy
product sales were Rs1.3bn in FY01. The company has relaunched all its dairy products
under the MilkMan brand name. New flavors like Milkman Cold Coffee and Milkman
Lassi have been launched in flavored drinks besides MilkMan Chocolate Milk and
Milkman Strawberry Milk.
27 October 2001

Available Flavors
Coffee, Chocolate Milk, Strawberry Milk.

MOTHER DAIRY
Mother Dairy Flavoured Milk captures all the goodness of Mother Dairys pure and fresh
milk combined with the magic of special flavors. These tasty drinks, available in 300 ml
and 500 ml, are perfect for any occasion either to savor when you are alone, or to enjoy
with family and friends.

Available Flavors
Made from Double Toned Milk, and available in Kesar Elaichi, Chocolate and Vanilla
flavours these drinks are light and refreshing and capture the great taste of these unique
flavours without being heavy or too filling.
Coke coming up with flavoured milk- New Delhi, May 28,2001
The fragmented, but high-potential packaged flavoured milk market, which has names
such as Amul and Britannia vying for the consumer's attention, will witness a big-ticket
entry shortly.
In line with its intended `beverage revolution', soft drink major, Coca-Cola India (CCI),
is mulling the introduction of a flavoured, milk-based beverage.
The development assumes importance in the domestic market, considering that only last
week, Coke's Atlanta-headquartered parent company had announced its decision to
introduce a dairy drink called Swerve in the US this season, to boost its share of the
nutritional beverage market.
Explaining the high interest in the category, Mr R.S. Sodhi, General Manager, Marketing,
GCMMF, said, "Research studies show that there is a steady consumer movement
towards healthy beverages such as milk and juices. Naturally, corporates are
looking at tapping the opportunity the segment presents."
Brand Name: Swerve (US)
Drink Type: Milk

Swerve: Swerve is a flavored milk drink created as part of our commitment to providing
a portfolio of healthy beverages in schools. Swerve contains 51% milk and has the Real
Milk and American Heart Association seals on its packaging. Swerve also has 30% of the
recommended daily allowance (RDI) of vitamins A, C & D and calcium. Plus it's low fat,
low cholesterol, low sodium and has only 150 calories per serving.
Available in the following flavor: Chocolate.
Available in the following locations: U.S. Virgin Islands and United States.
THE COCA-COLA COMPANY EXPANDS MOVE INTO MILK-BASED CATEGORY August 16,
2002

The company's continuing campaign to offer consumers a full range of beverage choices
took a major step forward, particularly in the milk-based category, with this month's
introduction of Nestle Choglit in the United States. The company already markets
several brands across the globe and is testing others in this promising product category.
In the global perspective we are already creating a presence with milk-based products in
other parts of the world. In April, we launched Mickey Aventuras® flavored milk
in Mexico as part of Minute Maid's alliance with the Walt Disney Company. The milk
drink is available in chocolate, strawberry and banana chocolate. Half of the beverages
that Mexican children under 12 consume are milks and fruit juices, thus the category is a
tremendous opportunity for Mickey Aventuras. The milk-based category is truly a
new frontier for The Coca-Cola Company.

SOME LOCAL PLAYERS

AMRIT FOODS

Amrit Foods, division of the Rs.600 crore Amrit Vanaspati Group, plans to launch
Gagan Big Sipp pouches, packed with flavored milk, and use the new brand launch for a
national foray. Amrit Foods already sells flavored milk in glass bottles under its
flagship brand Gaga in Delhi and neighboring markets. Big Sipp will be used for
launching the product in remaining markets across the country.
Amrit Food has invested Rs. 1 crore in developing and importing packaging for Gagan
Big Sipp in the form of aseptic pouch packaging, giving the milk a shelf life of two
months and pricing much lower than the brands already present in the cartons.
They have decided to launch an entirely new brand for flavored milk, specifically
targeted at smaller towns where affordability is an issue. Also, with Gagan Big Sipp,
Amrit foods will reach new markets like Chhattisgarh and parts of South India.
Having invested in Research and Development in the new cost effective packaging,
Amrit Food is looking at aggressively expanding the market for its flavored milk. In the
first phase Gagan Big Sipp will be launched in Uttar Pradesh, Himachal Pradesh and
Jammu and Kashmir.

The brand is priced at Rs.10 for a 250ml pouch.

New Delhi,September 10,2004

Amrit Foods has decided to double its production capacity of flavored milk in the
wake of sales of its brand Gagan Flavored Milk growing by over 100% in 2004-2005.
At an investment of close to Rs.3 crore, flavored milk production will be increased to 5
lakh liters per month from the current 2 lakh liters.
According to Mr. A.K. Tyagi, CEO, last year flavored milk contributed 35% towards
Amrit Foods divisions annual turnover of 25 crore. This year we expect flavored milk to
contribute over 45%, with a 50% growth in sales. He added that the overall market
for flavored milk grew 27% in value terms in 2004 and is expected to experience
robust growth this year as well.
The company which as of now sells flavored milk only in Northern States, plans to
spread its distribution to other parts of the country as well. It also plans to launch
new flavors this summer, beginning with chocolate flavor. Right now the flavors
include pineapple, strawberry, butterscotch, coffee, kesar, badam and elaichi.
NEW Delhi May 10,2005

MILKOS

Its a product of Ganapata Food Products based in West Bengal. The brand has been in
the market since a long time (approx. 15 years). It is available only in elaichi flavor and
is priced at Rs 12 for 250 ml.

PARAS group plans foray into flavored milk

The Rs 300-crore Ved Ram & Sons Foods, which owns the `Paras' brand of dairy
products, intends to give a spirited fight to well-entrenched names such as Amul, and
Britannia in the dairy sector.
While the Paras group has been a serious player in the liquid milk category in select
northern markets, the group now plans to enter the flavoured milk segment.
"We are planning to venture into flavoured milk, given that our core competence is in the
procurement of liquid milk," Mr K.K. Bhadra, Head-Marketing, Paras group, told
Business Line. He said that the foray could happen as early as next year.
NEW Delhi, Oct. 8

THE TREND
Food and beverage products that support healthy diets and weight loss are among
the worlds fastest growing according to a global study done by ACNielson. Out of
the seven categories the top two were soya-based drinks and drinkable yoghurts.
The Indian branded food and beverage market grew by over 5%.
There has been a significant rise in the consumption of the aseptic packaged milk.
Worldwide, the steady shift towards aseptic packaged milk is due to the increased
consciousness about health, packaging benefits, changing lifestyles of the people etc.
The aseptically produced milk is also demanded more as these products are completely
preservative free. Weight conscious people and those suffering from ailments such as
obesity, diabetes etc., prefer processed milk of different varieties such as low-fat,
skimmed and flavored milk. Further, the level of adulteration and contamination in
loose milk has also fueled the growth for the packaged milk to a great extent.
Aseptic packaging is one of the remarkable packaging systems, which ensures the most
certain method of maintaining the purity and safety of milk. The use of the technology
also enhances the shelf life and preserves the nutrition of food items for longer
periods. The aseptic technology provides better solutions to the Indian milk and milk
food industry as per international standards. Since, India needs to compete in the world
market for the processed milk product, it is essential that the industry should adopt the
HACCP (Hazard Analysis and Critical Control Point) and Sanitary and Phytosanitary
(SPS) standards in processing, packaging and transportation of food products. The fast
growing domestic market and the existing export potential in the Middle East and
several other countries makes packaged milk a promising venture.
India is the world's largest milk producer and set to become the world's milk food
factory. The market size of milk (sold in loose/ packaged form) is estimated to be 36
million MT worth INR 470 billion. The market is currently growing at round 4%
per annum in volume terms. Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil
Nadu and Gujarat are the major milk producing states account for 58% of the total
national production.
There is also a rapid growth for the packaged flavored milk. The market for it is
estimated to be worth INR 500 million growing at the rate of 10 per cent per annum.
There are only a handful of companies using the aseptic packaging technique include
Nestle India Ltd., Britannia Industries Ltd., Gujarat Co-operative Milk Marketing
Federation Ltd., Mother Dairy, Jaipur Dairy, Tropicana Beverages Company Ltd., Pepsi
Cola India Ltd., Hindustan Coca Cola Limited (Coke), etc.
GUJARAT

Gujarat is one of the few states producing milk in abundance quantity. Thus milk
& milk food processing industry holds an immense potential for ensuring high
returns in the State.

Growth prospects in the milk & milk food-processing sector are attractive, due to
the presence of basic infrastructure elements required for a successful venture.

Source: Department of Agriculture & Cooperation, Government of Gujarat

Note: I will be doing a market survey amongst the retailers as well as housewives that
will give a clearer picture of the existing Indian market scenario and the demand of the
product.