Declining Birthrate Causes Formula and White Milk Sales to Plummet... Dairy Industry Accelerates Business Diversification

[Asia Economy Reporter Seungjin Lee] Due to the prolonged low birthrate, annual consumption of infant formula is rapidly declining, and milk consumption has also decreased due to remote learning after COVID-19, prompting the dairy industry to focus on expanding niche markets.

According to the dairy industry on the 19th, sales of health functional foods made from milk-extracted protein are expected to surpass the infant formula market. According to the Korea Agro-Fisheries & Food Trade Corporation's Food Industry Statistical Information, the infant formula market (based on sales) shrank by 13.6%, from 162.86 billion KRW in 2017 to 140.73 billion KRW in 2019. Sales in the first half of last year were 53.88 billion KRW, a 25.0% decrease compared to the same period the previous year. On the other hand, sales of Maeil Dairies' 'Selex' and Ildong Pharmaceutical's 'Hi-mune' brands are expected to exceed 150 billion KRW this year.

Selex sales doubled from 25 billion KRW in 2019 to 50 billion KRW last year. Maeil Dairies initially expected sales of 70 billion KRW this year but now anticipates reaching 85 billion KRW due to strong market response. The proportion of Selex sales in Maeil Dairies' total sales is expected to increase from 3% last year to 5% this year.

Ildong Foodis achieved a turnaround to profitability after four years thanks to Hi-mune. This year's sales target is 70 billion KRW, 75% higher than last year. In addition, hy launched the 'Protein Code' brand with the concept of '100% plant-based protein,' and Lotte Foods Pasteur also entered the protein product competition by releasing 'Doctor Active.'

According to the Dairy Promotion Committee's milk distribution and consumption statistics, per capita consumption of plain milk last year was 26.3 kg, the lowest in 21 years. As milk consumption declined, Seoul Milk significantly expanded its processed milk product lineup, including Dalgona Milk and Salon Milk Tea, and also entered the cup coffee market.

Namyang Dairy introduced the baby food brand 'CareB' and is targeting young couples mainly through delivery services. Maeil Dairies launched 'Selex Milk Ceramide' targeting the inner beauty market.