In large mixing bowl, combine sugar, apple sauce, water, oil, eggs and vanilla. Using an electric mixer on medium speed, beat until well combined.
Add flour, dry milk, cinnamon, baking soda, salt and baking powder. Continue mixing until well combined, scrapping sides of bowl with a rubber spatula.
Add zucchini; continue mixing until well combined. Transfer to a greased 9x5-inch loaf pan.
Bake in a preheated 325°F oven 60-70 minutes or until toothpick inserted in center comes out clean. Remove from pan and cool completely on cooling rack.
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