Milking cows under the cover of darkness has helped to produce a milk powder high in the sleep-promoting hormone Melatonin.

The powder, dubbed iNdream3 by its producer Synlait, had its efficacy as a sleep promoting ingredient proven in an independent trial Otago University's WellSleep Centre, Synlait research and development manager Dr Simon Causer said.

Cows naturally produced increased concentrations of melatonin in their milk at night - which played a key role in helping humans to regulate their day/night cycle, he said.

"We've been developing this product for several years and this clinical trial is a major milestone in proving the ability of iNdream3 to improve sleep," Causer said.

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"iNdream3 leverages melatonin in its natural form. Melatonin in almost all other products are synthetically produced or extracted from source materials with lower levels of melatonin."

The clinical trial involved 19 participants and found the powder reduced the time to onset sleep, increased the deepest phase of sleep and reduces daytime dysfunction - including sleepiness, fatigue, impaired memory and poor concentration, Causer said.

iNdream3 has been stocked by a Korean Synlait customer since January.

Their product, Sleepiz, is sold as a powder in a sachet that consumers reconstitute as a drink.

Synlait's Managing Director Dr John Penno said the product represented an exciting opportunity for the company.

"It demonstrates our capability as a nutritional business to create and add value for the long term," he said.

"This is a high value product. Both Synlait and our milk suppliers who provide night milk will benefit, with suppliers receiving a payment above the market milk price," Penno said.

Synlait was continuing to develop opportunities through other business to business customers looking to use iNdream3 as an ingredient in their products, he said.

The product's development received support from DairyNZ through the Transforming the Dairy Value Chain Primary Growth Partnership programme and its clinical trial received additional funding from New Zealand Trade and Enterprise.