It can be used as a category 1. Since it is a liquid and is pre digested it is not as good as using a whole food for your protein.
These milk products are full of protein and can be perfectly paired with the correct portion of Phase 2 cereals.
It's a category 1 so you can have anything you would normally have with a category 1. Yet, you should only have 8 ounces or less if adding other items. You can have up to 16 oz if having it alone.