Maeil Dairies CEO emphasizes business diversification

Maeil Dairies’s Vice Chairman Kim Seon-hee [Courtesy of The Korea Chamber of Commerce ＆Industry]

Maeil Dairies Co., a South Korean dairy producer, has managed to diversify its product portfolio to counter challenges posed by the country’s declining birthrate, according to its Chief Executive Officer and Vice Chairman Kim Seon-hee.

“Small and mid-size dairy companies that sell only milk will not survive past 2026,” Kim said, during a speech at the Jeju Forum hosted by the Korea Chamber of Commerce and Industry on Thursday.

Kim highlighted the significant demographic changes, noting that the number of births in Korea has plummeted from 1.04 million in 1969, the year Maeil Dairies was founded, to just 230,000 last year.

However, Maeil Dairies has managed to thrive, with sales growing from about 1 trillion won ($722 million) in 2009 to 2.15 trillion won last year.

“The dairy industry is facing collapse, and we had to figure out how to sustain growth,” Kim said. “We studied demographic trends extensively and focused on the increasing elderly population.”

Maeil Dairies’ solution to this challenge has been to develop protein supplements for seniors. Kim pointed out that muscle mass decreases in everyone over the age of 40, and in advanced countries, this condition is classified as a disease covered by insurance.

By converting their infant formula production lines to manufacture protein supplements, Maeil Dairies has been able to maintain high operational efficiency.