Oldenburger Sterilized Milk, 35% Cheaper Than Regular Milk
Reduced Distribution Steps Through Direct Sourcing
CU, a convenience store operated by BGF Retail, announced on the 3rd that it will introduce two types of sterilized milk from the German dairy brand Oldenburger through overseas direct sourcing. This move aims to alleviate the burden on consumers amid ongoing discussions about the increase in raw milk prices.
Earlier, in January, CU became the first convenience store in the industry to launch two types of sterilized milk from Mlekovita, directly imported from Poland. These sterilized milk products, known for their cost-effectiveness (performance relative to price), sold out the initial batch of 150,000 units within three weeks of release.
CU, a convenience store operated by BGF Retail, introduces two types of sterilized milk from the German dairy brand Oldenburger through direct overseas sourcing. [Photo by BGF Retail]
According to the National Statistical Portal of Statistics Korea, the consumer price index for milk last year was 118.13 (2020=100), marking a 9.9% increase compared to the previous year. Last month’s milk consumer price index also rose by 5.9% year-on-year, reaching 123.49 compared to 116.56 in the same period last year.
With milk prices continuing to rise, CU is offering two types of 1ℓ Oldenburger sterilized milk (regular and low-fat) directly sourced from Germany at 2,100 KRW each. The price per 100㎖ is 210 KRW, which is about 35% cheaper than the same volume of regular white milk from manufacturer brands (NB) currently sold at CU.
Most sterilized milk imported into Korea currently comes from Poland. Oldenburger sterilized milk is produced by DMK, Germany’s largest dairy cooperative, using raw milk from cows raised on pastures in northern Germany. The two types include regular milk and low-fat milk, with fat contents of 3.5% and 1.5%, respectively.
CU reduced the intermediate distribution stages from the manufacturer to the distributor by direct sourcing. Typically, when importing milk products from overseas manufacturers, the process involves export companies, domestic importers, and distribution sellers. By cutting down these distribution steps, CU lowered procurement costs and enhanced price competitiveness, allowing them to offer these products at prices cheaper than those in supermarkets.
Since establishing the Global Trading Team, the first overseas sourcing-dedicated organization in the industry in 2017, CU has imported about 400 types of products from various countries, including Nuga Crackers (Taiwan), Mogu Mogu Juice (Thailand), rubber gloves (Vietnam), and umbrellas (China). As the number of items handled increased, CU’s overseas direct sourcing products have recorded double-digit year-on-year sales growth rates: ▲12.6% in 2020 ▲18.4% in 2021 ▲20.6% in 2022 ▲28.7% in 2023 ▲13.2% in the first half of 2024.
Kang Yuna, head of BGF Retail’s Global Trading Team, said, "Considering the enthusiastic customer response to sterilized milk in January, we directly imported high-quality German products this time. We will continue to introduce reasonably priced overseas products that can ease customers’ shopping burdens amid ongoing high inflation."
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