Dairy firms expand exports of infant formula, coffee beverages

[Photo provided by Maeil Dairies]

South Korean dairy companies are focusing on exporting infant formula and coffee beverages to overcome struggles in the dairy industry.

According to the Korea Customs Service, exports of milk and dairy products stood at $31.4 million from January to May this year, down 0.3 percent compared to the same period last year.

While the exports of products like instant noodles, baked goods, and snacks have surged due to the K-food wave, dairy products remain on the sidelines.

Exports, for example, accounted for only about 5-7 percent of sales for dairy companies in the first quarter of this year.

Maeil Dairies reported that exports constituted just 4.7 percent of its 444.3 billion won ($319 million) sales in the first quarter.

As part of efforts to expand exports, Maeil Dairies has focused on shipping infant formula, baby food, and coffee beverages, resulting in a 29 percent year-on-year increase in first-quarter exports.

“Exports faced challenges during the Covid-19 pandemic, but we have seen positive results in exports to China over the past two years,” said Maeil Dairies.

In the first quarter of 2022, during the peak of the pandemic, exports accounted for only 2.7 percent of Maeil Dairies’ total sales.

China and Southeast Asia are major export markets, with China alone making up over 90 percent of these exports.

Last month, Maeil Dairies secured a contract with Alibaba’s subsidiary Ali Health to supply two types of infant formula to the Chinese market.

Binggrae, known for products like its Banana Flavored Milk, also deals in processed milk, dairy beverages, and ice cream.

Milk and dairy beverages account for more than 50 percent of its product range. In the first quarter, exports of milk and dairy beverages made up about 13 percent of Binggrae’s overseas sales.

Binggrae reported that the popularity of Banana Flavored Milk has led to a 34 percent increase in first-quarter exports compared to a year ago, reaching 19.7 billion won.