South Korea Cheese Market – Industry Analysis, Forecasts and Opportunity Assessment (2017-2023)

Report on South Korea Cheese Market – Industry Analysis, Forecasts and Opportunity Assessment (2017-2023)

Introduction to South Korea Cheese Market

Dairy products are a staple throughout the world, milk being a staple of most existing human cultures. Apart from its regular form as a health drink, milk derivatives like butter and curd are consumed in large quantities. Important among these derivatives is cheese, a major industry in many countries across the globe. South Korea is a relatively new entrant in this space, where considerable growth in cheese consumption is seen only in the last two decades. Majority of the cheese consumed is imported into the nation. At the same time, the domestic industry is growing quickly to meet this new-found love for all things cheese in South Korea’s eating habits.

End-User/Technology

Historically, cheese did not figure on South Korean menus and in households. The infusion of western foods (like pizzas and burgers) and the tropes of consuming specific cheeses with select drinks and as a topping to snacks can be identified as introducing the trend. So, while cheese consumption is largely an urban phenomenon, the rapid rate of human development (it ranks 22 in the Human Development Index) and the consequent spread of ideas are now seen as the path for cheese to make a foray into the rural landscapes of the nation.

While the dairy industry is well-established in South Korea, beginning in the early 1900s and organized in the 1960s, the production of cheese is low on the quantity scale. Milk and yoghurt consumed in the country are largely produced domestically, while butter, cream and cheese are imported to satisfy the local demand.

Market Dynamics

The overall cheese market accounted for $30 billion of export in 2017.

Cheese has been associated with Europe since recorded history and is, as such, produced in the largest quantities in the countries of the continent. Germany, the Netherlands, France, Italy and Denmark together contributed to 55% of cheese exported (by dollar value; in 2017). United States of America and New Zealand are the only non-European nations in the list of the top ten nations.

On this list, South Korea ranked 75th, with $2.7 million worth of cheese exported. The major factor for low export quantity is the growing domestic demand, due to which South Korea has to import cheese from major markets like USA, with whom it has a free trade agreement (FTA).

Market Segmentation

The main varieties of cheese produced in South Korea are:

  • Natural Cheese
  • Processed Cheese

Popular forms of cheese consumed in South Korea. These are all imported in large quantities:

  • Mozzarella
  • Cream Cheese
  • Cheddar
  • Gouda
  • Camembert
  • Emmental
  • Processed Cheeses
  • Cheese powder

Regional/Geographic Analysis

The South Korean dairy industry is well-organized and even receives government patronage. The important facilities are located at Yangju, Yongin, Ansan and Geochang areas of the country. These are all located near the capital Seoul which is the major hub for domestic dairy products.

Opportunities

The consumption of the traditional kimchi is reducing due to Korea’s burgeoning love for cheese in its daily food items. While it is still an accompaniment to most preparations, the appreciation of varieties of fine cheese and cheese products is starting in the Korean society. Given that local production is yet to match the demand for cheese in the country, the market for these products is set to grow exponentially in the near future. Much of this demand is driven by western fast food providers which incorporate cheese into many of their signature preparations. These companies will drive growth of cheese imported into the country and on to the people’s plates. At the same time, the indigenous incorporation of cheese into local recipes is giving rise to a new set of eating patterns in the land.

Key Players

The main dairy player in South Korea is Seoul Dairy Co-operative. It alone accounts for a fifth of dairy products produced in a single calendar year. Other players include Maeil Dairies, Namyang Dairy and Dongwon Dairy. These four companies are well-established in the South Korean dairy space. They focus on transforming purchased ingredients to finished cheese products.

Another aspect of the cheese industry is the presence of western fast food giants like McDonalds and Burger King, which have cheese slices or dressings in most of their popular food items.

In short, cheese is an exciting market in South Korea, having its fair share of dominant players while also having room for newer firms to create products to satisfy the changing consumer tastes.

Major Trade Partners

South Korea has free trade agreements with the USA and EU. The latter consists of countries that export the most quantities of cheese to the nation.

Closer home, Australia and New Zealand are also major exporters of cheese to South Korea.

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