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.
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.
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.
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 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.
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.
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.
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.
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.
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 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.
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.
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.
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 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.
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.
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 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.
Other dairy continued to register weak value growth in 2019. Only chilled dairy desserts and condensed milk achieved positive growth.
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 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.
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.
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.
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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This industry report originates from Passport, our Packaged Food market research database.