Executive Summary

Sep 2019
Prospects
Contraction in cheese due to high prices and declining consumer base

Cheese experienced a contraction in 2019 in current value sales. Several trends impacted the category including a declining birth rate, higher retail prices and changing consumption habits.

Wider variety of cheese formats cater to snacking trend

Thanks to the growing snacking trend, consumers are increasingly consuming cheese as a snack and are seeking products designed for this purpose. Towards the end of the review period, domestic players launched new cheese snacks in the form of portion cheese, flavoured string cheese and grillable cheese.

Contraction in shredded cheese while import-free tariffs could secure future for some soft cheese

There continued to be a shift towards snack cheese in 2019. Moreover, South Korean consumers were still not familiar with soft cheese at the end of the review period, except for shredded pizza cheese, in which Maeil Dairies introduced natural soft cheeses such as brie and camembert.

Competitive Landscape
Seoul Dairy Cooperative continues to lead and invests in innovation

Seoul Dairy Cooperative maintained the leading position within cheese in 2019 by performing strongly in both processed and unprocessed cheese. The company introduced the processed cheese Cheese Cubic with Kakao Friends’ fun characters targeted at females.

Dongwon F&B focuses on snacking cheese and extending its product line-up

Dongwon F&B maintained second position within cheese in 2019, which was thanks to the strong performance of its Denmark In Pocket Cheese brand. This brand has been extended to include Light, Smoke, Cheddar and Jerky variants and now targets adults.

Players engage in new product developments to entice consumers

Increasing consumer proclivity towards Western-style dishes is slowly supporting demand for soft cheese. In response, many domestic companies are seeking opportunities to collaborate with global brands.

Prospects
Players adopt multiple strategies to boost sales, extend the consumer base and create new consumption occasions

Industry players in drinking milk continue to stimulate sales by introducing fortified/functional ingredients to their products. This includes the addition of oats which provide a feeling of fullness and which enable drinking milk to be consumed as a meal replacement.

Aside from organic varieties, flavoured milk drinks records a weak performance

Flavoured milk drinks once centred around private label lines in convenience stores or particular brands that are also present in ice cream and which used fun packaging with famous characters. However, consumer interest in these products began to subside towards the end of the review period.

Soy milk is rapidly replaced by almond milk within milk alternatives

The soy milk industry in South Korea benefited from the bacteria food poisoning scandal that swept across the milk and powder milk formula industries. However, since then manufacturers have been struggling with stagnant sales and employing a variety of strategies to stimulate the category.

Competitive Landscape
Seoul Dairy Cooperative maintains its leading position through high quality and innovative products

Seoul Dairy Cooperative maintained its leading position in overall drinking milk products in 2019, while its Seoul Milk Na 100% remained the leading brand and extended its share further. The company offers a diverse range of products including standard fresh milk, flavoured milk drinks and fortified/functional milk.

Maeil Dairies develops new product categories to overcome stagnating sales of drinking milk

Maeil Dairies continued to lose share in 2019 despite its focus on health and wellness drinking milk products through its Maeil and Sangha brands, such as Maeil lactose-free milk and Maeil Sangha Mokjang Organic Milk. The company is also present in other milk alternatives with Almond Breeze, which it launched mid review period and which is providing strong competition to soy milk.

Dr Chung’s Food achieves growth via its Vegemil brand line

While players such as Maeil Dairies and Namyang Dairy Products lost value share in 2019, players, such as Dr Chung’s Food gained ground. This was achieved via active new product developments and stronger promotional activities, especially discounting.

Prospects
Drinking yoghurt boosted by grain innovation and meal replacement marketing strategy

The range of yoghurt and sour milk continued to rise in 2019. Drinking yoghurt remained by far the largest category in yoghurt and sour milk products with manufacturers renewing their product lines.

Changes to regulation around functional claims set dramatically alter the category

Manufacturers have been increasingly active in launching new functional yoghurt with many investing heavily to have the claims they make for their products certified as healthy functional food. The regulations around the way in which claims about functionality are changing, which is set to have a positive impact on this category over the forecast period.

Sour milk products enter South Korea

Sour milk products became available in South Korea towards the end of the review period, supplied by Maeil Dairies. Kefir is prepared by culturing fresh milk, water, or other non-dairy substitutes with kefir grains, which are basically clumps of bacteria that have been proven to be beneficial to the human digestive system.

Competitive Landscape
Korea Yakult maintains its leading position through home deliveries

Korea Yakult maintained its solid leading position within yoghurt and sour milk products in 2019. Its Will brand, which was the first functional fermented milk to be launched in South Korea is a functional product for stomach health and is the leading brand in the category.

Namyang Dairy Products launches new concept fermented milk brand

Second-ranked Namyang Dairy Products is supported by solid brand power in South Korea. However, in order to boost its sales, the company launched a new concept fermented milk brand in 2019, namely, How Do You Drink Cheese? The brand offers a new way of enjoying cheese as it contains three premium cheeses that are popular in the country, Gorgonzola, Camembert and Cream Cheese.

Binggrae launches new dessert-themed flavoured yoghurt

Binggrae also introduced a new flavoured yoghurt in 2019 taking inspiration from a dessert concept and which targets young female consumers. Its Yoplait Topping includes yoghurt and cereal in one pack.

Prospects
Chilled dairy desserts and condensed milk rescue other dairy

Other dairy continued to register weak value growth in 2019. Only chilled dairy desserts and condensed milk achieved positive growth.

Chilled dairy desserts boosted by yoghurt/fruit jelly puddings

Chilled dairy desserts was originally characterised by custard puddings. However, in order to overcome weak sales, chilled dessert manufacturers, including CJ Cheiljedang and Dole Korea, started to present yoghurt/jelly puddings, diversifying their product portfolios from jelly cups that were included under other sugar confectionery.

Cream sales remain low, though the category benefits from diversity

Cream sales continued to contract in 2019. South Koreans mostly consume whipping cream and fresh cream with these types mostly used for baking and decorative purposes and to make sauces for Western types of cuisine, such as pasta.

Competitive Landscape
Other dairy remains a concentrated category, while leading players lose share

Other dairy remained a concentrated category in 2019 with the top three players accounting for three-quarters of value sales. However, two of the three experienced share contractions.

Strong leaders in most categories

Besides Seoul Dairy Cooperative’s outright lead in condensed milk and CJ Cheiljedang’s continued domination in chilled dairy desserts, most categories in other dairy featured solid leading players. For instance, Dongsuh Foods characterised coffee whiteners and retained its strong share via its Dong Suh Prima brand.

Seoul Dairy Cooperative launches smaller pack size to offset share declines

Despite its strong lead in condensed milk, Seoul Dairy Cooperative experienced further share declines in 2019. To offset these, the company launched its Seoul Milk brand in a smaller 120g pack size, making it more convenient for consumers to use at home.

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Dairy in South Korea

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in South Korea with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in South Korea, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in South Korea market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth  
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Dairy in South Korea?
  • What are the major brands in South Korea?
  • How has the economic downturn impacted sales performance given its staple food status?
  • Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
  • How are volatile farmgate prices for milk impacting retail prices and sales performance?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Dairy in South Korea - Category analysis

Butter and Spreads

HEADLINES

PROSPECTS

Consumers better able to differentiate between butter and margarine thanks to growing sophistication
Imported brands create diversification and boost sales within butter
Growth in highly popular food delivery thanks to guarantees of product quality

COMPETITIVE LANDSCAPE

Whilst leading domestic players lose value share, small imported brands expand
Consumer choices often based on brand power
Growth in number of imported brands increases variety

CATEGORY DATA

Table 1 Sales of Butter and Spreads by Category: Volume 2014-2019
Table 2 Sales of Butter and Spreads by Category: Value 2014-2019
Table 3 Sales of Butter and Spreads by Category: % Volume Growth 2014-2019
Table 4 Sales of Butter and Spreads by Category: % Value Growth 2014-2019
Table 5 NBO Company Shares of Butter and Spreads: % Value 2015-2019
Table 6 LBN Brand Shares of Butter and Spreads: % Value 2016-2019
Table 7 Distribution of Butter and Spreads by Format: % Value 2014-2019
Table 8 Forecast Sales of Butter and Spreads by Category: Volume 2019-2024
Table 9 Forecast Sales of Butter and Spreads by Category: Value 2019-2024
Table 10 Forecast Sales of Butter and Spreads by Category: % Volume Growth 2019-2024
Table 11 Forecast Sales of Butter and Spreads by Category: % Value Growth 2019-2024

Cheese

HEADLINES

PROSPECTS

Contraction in cheese due to high prices and declining consumer base
Wider variety of cheese formats cater to snacking trend
Contraction in shredded cheese while import-free tariffs could secure future for some soft cheese

COMPETITIVE LANDSCAPE

Seoul Dairy Cooperative continues to lead and invests in innovation
Dongwon F&B focuses on snacking cheese and extending its product line-up
Players engage in new product developments to entice consumers

CATEGORY DATA

Table 12 Sales of Cheese by Category: Volume 2014-2019
Table 13 Sales of Cheese by Category: Value 2014-2019
Table 14 Sales of Cheese by Category: % Volume Growth 2014-2019
Table 15 Sales of Cheese by Category: % Value Growth 2014-2019
Table 16 Sales of Spreadable Processed Cheese by Type: % Value 2014-2019
Table 17 Sales of Unprocessed Cheese by Type: % Value 2014-2019
Table 18 NBO Company Shares of Cheese: % Value 2015-2019
Table 19 LBN Brand Shares of Cheese: % Value 2016-2019
Table 20 Distribution of Cheese by Format: % Value 2014-2019
Table 21 Forecast Sales of Cheese by Category: Volume 2019-2024
Table 22 Forecast Sales of Cheese by Category: Value 2019-2024
Table 23 Forecast Sales of Cheese by Category: % Volume Growth 2019-2024
Table 24 Forecast Sales of Cheese by Category: % Value Growth 2019-2024

Drinking Milk Products

HEADLINES

PROSPECTS

Players adopt multiple strategies to boost sales, extend the consumer base and create new consumption occasions
Aside from organic varieties, flavoured milk drinks records a weak performance
Soy milk is rapidly replaced by almond milk within milk alternatives

COMPETITIVE LANDSCAPE

Seoul Dairy Cooperative maintains its leading position through high quality and innovative products
Maeil Dairies develops new product categories to overcome stagnating sales of drinking milk
Dr Chung’s Food achieves growth via its Vegemil brand line

CATEGORY DATA

Table 25 Sales of Drinking Milk Products by Category: Volume 2014-2019
Table 26 Sales of Drinking Milk Products by Category: Value 2014-2019
Table 27 Sales of Drinking Milk Products by Category: % Volume Growth 2014-2019
Table 28 Sales of Drinking Milk Products by Category: % Value Growth 2014-2019
Table 29 NBO Company Shares of Drinking Milk Products: % Value 2015-2019
Table 30 LBN Brand Shares of Drinking Milk Products: % Value 2016-2019
Table 31 Distribution of Drinking Milk Products by Format: % Value 2014-2019
Table 32 Forecast Sales of Drinking Milk Products Products by Category: Volume 2019-2024
Table 33 Forecast Sales of Drinking Milk Products Products by Category: Value 2019-2024
Table 34 Forecast Sales of Drinking Milk Products Products by Category: % Volume Growth 2019-2024
Table 35 Forecast Sales of Drinking Milk Products Products by Category: % Value Growth 2019-2024

Other Dairy

HEADLINES

PROSPECTS

Chilled dairy desserts and condensed milk rescue other dairy
Chilled dairy desserts boosted by yoghurt/fruit jelly puddings
Cream sales remain low, though the category benefits from diversity

COMPETITIVE LANDSCAPE

Other dairy remains a concentrated category, while leading players lose share
Strong leaders in most categories
Seoul Dairy Cooperative launches smaller pack size to offset share declines

CATEGORY DATA

Table 36 Sales of Other Dairy by Category: Volume 2014-2019
Table 37 Sales of Other Dairy by Category: Value 2014-2019
Table 38 Sales of Other Dairy by Category: % Volume Growth 2014-2019
Table 39 Sales of Other Dairy by Category: % Value Growth 2014-2019
Table 40 NBO Company Shares of Other Dairy: % Value 2015-2019
Table 41 LBN Brand Shares of Other Dairy: % Value 2016-2019
Table 42 Distribution of Other Dairy by Format: % Value 2014-2019
Table 43 Forecast Sales of Other Dairy by Category: Volume 2019-2024
Table 44 Forecast Sales of Other Dairy by Category: Value 2019-2024
Table 45 Forecast Sales of Other Dairy by Category: % Volume Growth 2019-2024
Table 46 Forecast Sales of Other Dairy by Category: % Value Growth 2019-2024

Yoghurt and Sour Milk Products

HEADLINES

PROSPECTS

Drinking yoghurt boosted by grain innovation and meal replacement marketing strategy
Changes to regulation around functional claims set dramatically alter the category
Sour milk products enter South Korea

COMPETITIVE LANDSCAPE

Korea Yakult maintains its leading position through home deliveries
Namyang Dairy Products launches new concept fermented milk brand
Binggrae launches new dessert-themed flavoured yoghurt

CATEGORY DATA

Table 47 Sales of Yoghurt and Sour Milk Products by Category: Volume 2014-2019
Table 48 Sales of Yoghurt and Sour Milk Products by Category: Value 2014-2019
Table 49 Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2014-2019
Table 50 Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2014-2019
Table 51 Sales of Flavoured Yoghurt by Flavour: Rankings 2014-2019
Table 52 NBO Company Shares of Yoghurt and Sour Milk Products: % Value 2015-2019
Table 53 LBN Brand Shares of Yoghurt and Sour Milk Products: % Value 2016-2019
Table 54 Distribution of Yoghurt and Sour Milk Products by Format: % Value 2014-2019
Table 55 Forecast Sales of Yoghurt and Sour Milk Products by Category: Volume 2019-2024
Table 56 Forecast Sales of Yoghurt and Sour Milk Products by Category: Value 2019-2024
Table 57 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2019-2024
Table 58 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2019-2024

Packaged Food in South Korea - Industry Overview

EXECUTIVE SUMMARY

Convenience drives value sales in 2019
Further value growth in 2019 thanks to HMR products
CJ CheilJedang continues to lead in 2019
Rise of convenience stores and internet retailing due to convenience and value for money
Convenient ready meals to lead future growth

FOODSERVICE

Sales to Foodservice
Franchise restaurants boost sales of packaged products to foodservice
Popularity of black sugar and condensed milk in 2019
More consumers purchasing frozen pizza in retailing channels
Consumer Foodservice
Expansion of home delivery services – a key development
Single-portion menus benefit chained pizza limited-service restaurants
Specialist coffee and tea shops increasingly popular, whilst bars/pubs struggle
Category Data
Table 59 Foodservice Sales of Packaged Food by Category: Volume 2014-2019
Table 60 Foodservice Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 61 Forecast Foodservice Sales of Packaged Food by Category: Volume 2019-2024
Table 62 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2019-2024

MARKET DATA

Table 63 Sales of Packaged Food by Category: Volume 2014-2019
Table 64 Sales of Packaged Food by Category: Value 2014-2019
Table 65 Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 66 Sales of Packaged Food by Category: % Value Growth 2014-2019
Table 67 GBO Company Shares of Packaged Food: % Value 2015-2019
Table 68 NBO Company Shares of Packaged Food: % Value 2015-2019
Table 69 LBN Brand Shares of Packaged Food: % Value 2016-2019
Table 70 Penetration of Private Label by Category: % Value 2014-2019
Table 71 Distribution of Packaged Food by Format: % Value 2014-2019
Table 72 Distribution of Packaged Food by Format and Category: % Value 2019
Table 73 Forecast Sales of Packaged Food by Category: Volume 2019-2024
Table 74 Forecast Sales of Packaged Food by Category: Value 2019-2024
Table 75 Forecast Sales of Packaged Food by Category: % Volume Growth 2019-2024
Table 76 Forecast Sales of Packaged Food by Category: % Value Growth 2019-2024

DEFINITIONS

SOURCES

Summary 1 Research Sources