Confectioners' sugar is not optional. Granulated crystals are heavier than cocoa and milk powder, so they sink to the bottom of the jar and draw in moisture, which makes the mix clump and scoop unevenly.
Dutch-process cocoa dissolves more readily and tastes smoother and darker. Natural cocoa works but is more acidic and fruity, and needs harder whisking.
For a deeper, caramelized dairy note, spread the dry milk powder on a parchment-lined sheet and toast at 300 F for 20 minutes until pale gold and crumbly, then break up the lumps in a food processor before blending.
Serve topped with mini marshmallows, a spoonful of whipped cream, shaved chocolate, or a candy cane or cinnamon stick as a stirrer. Cookies or biscotti on the side.
For a Southwest version, whisk 1 teaspoon ground cinnamon and 1/4 teaspoon cayenne into the full batch of mix.
Stored airtight in a cool, dry cupboard, the mix keeps 6 months. Keep it away from the stove and any steam.