South Korea’s dairy industry is accelerating a shift away from plain milk toward higher-margin categories such as protein beverages, fermented dairy products and plant-based drinks, as structural changes in demand and rising import competition reshape the sector.
The transition is deepening as consumption of white milk continues to fall amid the country’s low birth rate, while tariff removals on imported milk—first from the U.S. in January and from Europe next month—are expected to expand foreign suppliers’ share of the market.
Industry players are repositioning portfolios toward health-oriented and age-specific nutrition products, reflecting broader demographic aging and shifting dietary preferences.
Maeil Dairies reported that revenue from non-dairy segments rose to about $5.40 billion equivalent in 2024 from $4.96 billion in 2023, an increase of roughly 8.7%. The share of those businesses increased steadily from 38.5% in 2023 to 40.4% last year.
The company said growth was driven by plant-based beverages such as oat milk and almond drinks, along with protein-focused products under its “Cellact” adult nutrition brand. Maeil is also expanding exports to China, including a dedicated brand presence on the JD Health platform.
Seoul Dairy Cooperative said revenue from fermented dairy products rose 6.2% to about $1.36 billion equivalent last year, supported by strong sales of its premium yogurt lines.
The company recently launched “Farmers Greek,” a Greek yogurt brand positioned around higher protein content and lactose-free formulation, and is expanding business-to-business supply to cafés and bakeries.
Namyang Dairy Products is also shifting toward high-protein, low-sugar and lactose-free offerings. Sales of its protein brand “Take Fit” jumped 72% in the first quarter from a year earlier, driven by product expansion and broader distribution.
The company is also strengthening fermented dairy products and expanding its food service division, which rose 13% in the first quarter on growing demand from café chains, institutional catering and military supply contracts.
Ildong Foodis, traditionally centered on infant formula, is expanding into functional nutrition products. Protein beverage sales rose 25% in the first half from a year earlier, while its flagship “Hymune” protein line has surpassed $4.35 billion in cumulative sales since its 2020 launch.
Yonsei Dairy is also expanding into functional foods, launching its “Severance Care” medical nutrition brand developed with Severance Hospital in January and planning additional diabetes-focused products in the second half of the year.
Industry executives say the decline in white milk consumption is structurally entrenched. “The erosion of the plain milk market is unavoidable,” one said. “Growth is now coming from protein, fermented dairy and other functional categories that can support higher margins.”
