South Korea Dairy Market Outlook

According to the report by Expert Market Research (EMR), the South Korea dairy market size attained a value of USD 4.05 billion in 2023. Driven by the increasing consumer demand for dairy-based products and innovations in the dairy sector, the market is projected to grow at a CAGR of 4.0% between 2024 and 2032, reaching a value of USD 5.53 billion by 2032. 

Dairy products, including milk, cheese, yogurt, butter, and various dairy-based beverages, are staples in the South Korean diet. The country’s rich cultural heritage, coupled with a growing preference for nutritious and protein-packed food, has created a vibrant and expanding dairy market. The demand for dairy products continues to increase, fueled by the evolving preferences of health-conscious consumers, technological advancements in production, and the expansion of dairy-based offerings in retail outlets and foodservice chains.

Key Market Drivers

Several factors contribute to the growth of the South Korea dairy market. The increasing focus on health and wellness, particularly among urban populations, is one of the foremost drivers. Dairy products are widely recognized for their nutritional benefits, providing essential vitamins and minerals such as calcium, protein, and vitamins A and D. As consumers become more health-conscious, the demand for dairy products, particularly functional dairy, has surged.

The shift towards protein-rich diets, especially among millennials and younger demographics, has also fueled the demand for dairy-based food products. Yogurt, in particular, has seen significant growth due to its probiotic properties and perceived digestive health benefits. Additionally, the increasing popularity of high-protein milk and cheese varieties is contributing to market growth as consumers seek alternatives to traditional sources of protein.

The South Korean government’s commitment to ensuring food security and stabilizing dairy prices has also played a pivotal role in fostering market growth. By supporting local dairy production and facilitating trade agreements, the government has ensured a steady supply of dairy products at competitive prices.

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Consumer Trends

Consumer preferences in South Korea are shifting towards premium, functional, and value-added dairy products. There is a marked increase in demand for organic, lactose-free, and low-fat dairy options, as well as dairy alternatives, such as plant-based beverages, which appeal to those with dietary restrictions or ethical concerns about animal-based products.

Probiotic-rich products, such as kefir, yogurt, and other fermented dairy items, have experienced a surge in demand due to their perceived health benefits, particularly for gut health and immune function. The popularity of probiotics has led to innovation in flavor, packaging, and formulations, further boosting market growth.

Another notable trend in the South Korea dairy market is the rise of ready-to-eat and on-the-go dairy products. With busy lifestyles and an increasing number of dual-income households, convenience has become a key factor influencing consumer choices. Dairy-based snacks, such as cheese sticks, flavored yogurts, and milk-based beverages, are gaining popularity as convenient and nutritious options for consumers seeking quick, healthy meals.

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South Korea Dairy Market Segmentation

The market can be divided based on product, and distribution channel.

Market Breakup by Product

  • Milk
  • Dry Milk
    • Non Fat
    • Full Fat
  • Cheese
    • Natural
    • Processed
  • Yogurt
  • Butter
  • Baby Formula
  • Condensed Milk

Market Breakup by Distribution Channel

  • Supermarkets and Hypermarkets
  • Convenience Stores and Discount Stores
  • Speciality Stores
  • Online
  • Department Stores

Competitive Landscape

The EMR report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the South Korea dairy market. Some of the major players explored in the report by Expert Market Research are as follows:

  • Maeil Co.Ltd
  • Namyang Dairy Products Co., Ltd.
  • Seoul Milk Cooperative
  • Dairyzen Co., Ltd
  • Nestlé SA
  • Others

Challenges in the South Korea Dairy Market

Despite the growth prospects, the South Korea dairy market faces several challenges. One of the primary concerns is the high cost of dairy production, particularly for fresh milk. South Korea’s reliance on imports for dairy ingredients, such as powdered milk, contributes to the rising cost of dairy products. This, in turn, impacts the retail prices and affects consumer spending.

The dairy industry in South Korea is also facing a decline in domestic milk production due to aging farmers and the limited availability of arable land for dairy farming. This has led to an increased dependency on imports, further impacting local producers.

Moreover, as consumer preferences evolve, traditional dairy products are encountering competition from plant-based alternatives. With a growing number of consumers adopting plant-based diets or reducing dairy intake due to lactose intolerance, the demand for non-dairy beverages is increasing.

Opportunities for Growth

Despite these challenges, there are significant opportunities for growth in the South Korea dairy market. The increasing consumer preference for premium and functional dairy products presents an opportunity for dairy companies to innovate and diversify their offerings. New product introductions, particularly in the probiotic, lactose-free, and organic dairy segments, will likely capture the interest of health-conscious consumers.

There is also growing demand for dairy alternatives, driven by an increase in veganism and the rise of dairy-free diets. By expanding their product portfolios to include plant-based alternatives such as oat, soy, and almond milk, dairy producers can tap into this expanding market segment.

Furthermore, expanding dairy offerings in the foodservice and hospitality industries presents significant growth potential. As the demand for dairy-based products in cafes, restaurants, and hotels continues to rise, opportunities abound for dairy producers to cater to these sectors with specialized products.

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