India’s scorching summer and growing consumer preference for healthier beverages are reshaping the country’s ₹1.1 lakh crore soft drinks market, with traditional dairy beverages such as lassi, buttermilk and probiotic drinks emerging as one of the fastest-growing categories in the food and beverage industry.
Industry leaders report that packaged dairy beverages are witnessing unprecedented demand, driven by health-conscious consumers, favourable tax policies and the rapid expansion of quick-commerce platforms.
Dairy Beverages Record Strong Summer Growth
Leading dairy companies say the 2026 summer season has significantly accelerated sales of value-added dairy beverages.
According to Jayen Mehta Chari, Managing Director of Mother Dairy, products such as lassi and buttermilk have recorded more than 40% growth during the current summer season.
The company is also experiencing robust double-digit growth through quick-commerce platforms, reflecting changing consumer buying habits in urban India.
Similarly, Srideep Kesavan, Chief Executive Officer of Heritage Foods, said dairy beverages have become an increasingly important business segment, with their contribution to the company’s revenue doubling over the past three years.
Industry experts believe dairy beverages are steadily moving beyond seasonal consumption to become a year-round health and nutrition category.
Protein-Based Dairy Drinks Gain Popularity
Growing awareness of nutrition and wellness is encouraging companies to invest in functional dairy beverages.
According to Akshali Shah, Executive Director of Parag Milk Foods, India’s packaged food and beverage industry, currently valued at ₹9.51 lakh crore, is projected to expand to ₹14.27 lakh crore by 2030.
Within this broader market, the dairy beverages segment is expected to reach ₹4.23 lakh crore by 2031, highlighting its enormous long-term growth potential.
Parag Milk Foods reported an impressive 109% year-on-year growth in its health and nutrition portfolio and recently introduced Avatar Protein Cold Coffee, offering 15 grams of protein per serving to cater to consumers seeking convenient, high-protein beverages.
Mother Dairy has also expanded its portfolio with products such as probiotic buttermilk and mint-flavoured buttermilk, priced from approximately ₹10, making healthier beverage options accessible to a wider consumer base.
Beverages Become the New Growth Engine for FMCG Companies
The changing consumption pattern is transforming the strategies of India’s leading fast-moving consumer goods (FMCG) companies.
Industry analysts note that beverages have now become one of the strongest growth drivers across the sector, surpassing several traditional packaged food categories.
Recent business performance highlights include:
- Hindustan Unilever Limited (HUL) reported strong double-digit growth in its coffee and health drink brands, including Horlicks and Boost.
- Tata Consumer Products recorded 23% growth in its ready-to-drink beverage portfolio.
- Dabur India doubled its coconut water business, while its Real fruit juice portfolio grew by 26%.
- Varun Beverages, PepsiCo’s largest bottling partner in India, reported that 63% of its March quarter beverage volumes came from low-sugar and no-sugar products, underlining consumers’ increasing preference for healthier beverage choices.
The trend suggests that wellness-oriented beverages are becoming central to future growth strategies across the FMCG sector.
Why Consumers Are Choosing Dairy Beverages
Industry experts attribute the rapid rise of dairy beverages to a combination of economic, nutritional and lifestyle factors.
Tax Advantage
One of the biggest competitive advantages enjoyed by dairy beverages is India’s indirect tax structure.
Carbonated soft drinks attract a tax burden of around 40%, whereas dairy-based beverages are generally taxed at only 5% GST.
This substantial difference enables dairy companies to market quality products at affordable price points, often starting at ₹10, making them attractive to price-sensitive consumers.
Health and Wellness
Consumer behaviour has shifted significantly since the Covid-19 pandemic.
Health-conscious buyers are increasingly seeking beverages that offer both refreshment and nutritional benefits. Traditional dairy drinks such as lassi and buttermilk are widely perceived as healthier alternatives due to their natural probiotic content, lower sugar levels and digestive benefits.
Protein-enriched dairy beverages are also gaining popularity among young professionals, fitness enthusiasts and urban consumers.
Revival of Traditional Indian Beverages
Packaged versions of traditional Indian drinks are witnessing a strong revival.
Products such as buttermilk, kokum sherbet, jaljeera, aam panna and probiotic dairy beverages are returning to supermarket shelves in hygienically packaged, ready-to-drink formats that appeal to modern consumers seeking authentic flavours with greater convenience.
Opportunities for India’s Dairy Industry
The growing popularity of value-added dairy beverages represents a significant opportunity for India’s dairy sector.
Unlike liquid milk, products such as flavoured lassi, probiotic buttermilk, yoghurt drinks and protein beverages offer higher value addition, stronger brand differentiation and better profit margins.
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Industry observers believe the segment will continue attracting investments in product innovation, cold-chain infrastructure, packaging technology and health-focused formulations.
With increasing urbanisation, rising disposable incomes and greater emphasis on nutrition, dairy beverages are expected to play an increasingly important role in India’s food and beverage industry.
Outlook
India’s beverage market is undergoing a noticeable transformation as consumers increasingly prioritise health, convenience and nutrition over conventional sugary soft drinks.
Backed by favourable taxation, strong consumer demand and continuous product innovation, dairy beverages are emerging as one of the fastest-growing segments within the country’s food processing industry.
As companies expand portfolios with probiotic, protein-rich and functional dairy drinks, products such as lassi and buttermilk are evolving from traditional refreshments into mainstream modern beverages, positioning the dairy industry as a major beneficiary of India’s changing consumption landscape.
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