Boston, MA -- (SBWIRE) -- 09/11/2014 -- Executive Summary

Cheese

Cheese producers have turned their interest to adults after saturation has occurred in the children's market. More consumers in South Korea like to have cheese together with alcohol. Increasing popularity of French dining and drinking wine is also leading to an increased cheese market potential for adults.

Competitive Landscape

In 2013, Seoul Dairy Cooperative is expected to maintain 42% of value sales. The market share of Namyang Dairy Products is expected to decline to 22%, a fall of one percentage point due to the impact of unfair business scandal of the company. Consumers boycotted the company's products after a group of wholesalers for Namyang reported to the public that the company is forcing its sales agents to buy more products than they needed and the products were closed to their expiry date.

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Industry Prospects

The growing demand for high-quality, natural cheese will support robust value sales over the forecast period. Unprocessed cheese is expected to grow at a CAGR of 9%, in constant 2013 prices, whereas processed cheese is anticipated to achieve a CAGR of 3% over the forecast period. As processed cheese products become more natural in flavour, sales will increase.

Drinking Milk Products

Value sales of drinking milk products are expected to grow by 6% in 2013 to Won4 trillion in 2013. The market suffered from an imbalance between demand and supply of raw milk in the first half of 2012, however, price promotion by the dairy producers supported sales in the second half of the year and 2013. Aggressive promotion was caused by an attempt by the main manufacturers to gain market share, however, brand loyalty is high in this market as consumers rarely like to change their tastes once they get used to a specific milk product.

Competitive Landscape

In 2013, Seoul Dairy Cooperative continues to dominate sales, which will reach Won1,400 billion in 2013, representing 36% of value sales. Its share will decline marginally in the year due to a fall in share in dairy only flavoured milk drinks. Having various brands available in the market, consumers tend to choose flavoured milk drinks that offers promotional price. Relatively higher unit price of Seoul Dairy's products resulted in decline in share in the market.

Industry Prospects

Drinking milk products are expected to achieve a value CAGR of 3% between 2013 and 2018, in constant 2013 prices. Market saturation has developed since the recovery of drinking milk products from the foot-and-mouth crisis in 2010 and will be likely to maintain 2-3% year-on-year value growth thereafter. Only long-life/UHT milk will suffer negative growth of -9% a year over the forecast period. Local consumers are less satisfied with long-lasting products, with fresh/pasteurised milk and flavoured milk drinks more appealing to them.

Yoghurt and Sour Milk Drinks

Yoghurt and sour milk drinks sales are growing, with a 7% increase in value sales expected in 2013. Since sour milk products are a negligible market, yoghurt drives the market. Drinking yoghurt will see 9% value growth in 2013, after robust growth in the review period. In terms of value sales, drinking yoghurt will represent 72% of the market's sales in 2013. On the other hand, spoonable yoghurt saw 4% value growth in 2013, the same growth rate since 2010. This is because drinking yoghurt is more convenient to carry, allowing it to be consumed at any time. Spoonable yoghurt is less convenient, but is still preferred by those who want a creamier taste or want an accompaniment to fruit.

Competitive Landscape

In 2013, Korea Yakult Corp will lead yoghurt with 46% value share. The company owns the top four brands, WiLL, Kupffer's, R&B and Yakult in drinking yoghurt and the first leading brand, Super 100 in spoonable yoghurt. Each brand is highlighted for specific health benefits such as stomach health, liver health and intestine health. Being successful to target for segmented consumers, these brands are expect to increase sales value in 2013.

Industry Prospects

The premiumisation trend in yoghurt will continue thanks to the popularity of pro/pre biotic products. Due to the convenience and price differences, market sales will be led by drinking yoghurt, rather than spoonable yoghurt. Pro/pre biotic drinking yoghurt is expected to achieve a value CAGR of 6% at constant 2013 prices over the forecast period. A decline in consumption of fruited spoonable yoghurt will cause slower growth in spoonable yoghurt.

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