Ever-growing consumer demand for convenience, combined with a healthy diet and preference for natural ingredients has led to a growth in functional beverage markets. Current trends and changing consumer needs indicate a great opportunity for innovations and developments in fermented milks. Scientific and clinical evidence is also mounting to corroborate the consumer perception of health from fermented milks. Probiotics, prebiotics, synbiotics and associated ingredients also add an attractive dimension to cultured dairy products. Also, owing to expanding market share and size of dairy companies, there has been a reduction of clearly structured markets i.e. merging of dairy products and fruit beverage markets with introduction of ‘juiceceuticals’ like fruit-yogurt beverages that are typical example of hybrid dairy products offering health, flavour and convenience. Another potential growth area for fermented milks includes added-value products such as low calorie, reduced-fat varieties and those fortified with physiologically active ingredients including fibers, phytosterols, omega-3-fatty acids, whey based ingredients, antioxidant vitamins, isoflavones that provide specific health benefits beyond basic nutrition. World over efforts have been devoted to develop fermented milks containing certain nonconventional food sources like soybeans and millets and convert them to more acceptable and palatable form thus producing low cost, nutritious fermented foods especially for developing and underdeveloped nations where malnutrition exists. Furthermore, use of biopreservatives and certain innovative technologies like membrane processing, high pressure processing and carbonation lead to milk fermentation under predictable, controllable and precise conditions to yield hygienic fermented milks of high nutritive value.