South Korea Dairy Market Demand, Size, Share, Growth & Report | 2034

South Korea Dairy Market Outlook

According to the report by Expert Market Research (EMR), the South Korea dairy market size reached a value of USD 4.05 billion in 2024. Driven by rising health consciousness, increasing disposable income, and growing demand for dairy-based products, the market is anticipated to grow at a compound annual growth rate (CAGR) of 4.0% between 2025 and 2034, reaching a projected value of USD 5.53 billion by 2034.

Dairy products have long been a staple of the South Korean diet, with traditional dairy products such as milk, cheese, and yoghurt continuing to experience robust demand. In recent years, the South Korea dairy market has been shaped by a growing interest in health and wellness, innovative product offerings, and increased consumption across both traditional and modern retail channels. As the country’s population becomes more health-conscious and the demand for high-quality, nutritious food increases, dairy products, especially those that cater to this evolving market, are expected to see continued growth.

Key Drivers of Growth

The primary factors contributing to the growth of the South Korea dairy market are the increasing demand for healthy food alternatives, the rise in consumption of dairy-based beverages, and the shift toward premium and functional dairy products. As consumers become more health-conscious, they are increasingly turning to dairy products for their perceived health benefits, including essential nutrients such as calcium, protein, and vitamins.

Moreover, the growing trend of wellness and fitness in South Korea has played a significant role in driving the consumption of dairy products. There is an increasing demand for low-fat, low-sugar, and high-protein dairy products, with consumers opting for functional dairy items such as protein-rich milk, probiotic yoghurt, and dairy-based snacks. This growing preference for health-focused dairy products is driving market expansion as consumers look for products that provide additional nutritional value beyond basic dietary needs.

The popularity of dairy-based beverages, such as flavoured milk, milk-based coffee drinks, and ready-to-drink yoghurt, is also contributing to the market’s growth. These beverages have gained traction due to their convenience and appeal as on-the-go, nutritionally balanced options. With the growing availability of dairy products in both urban and rural areas, as well as the increase in online shopping and the e-commerce boom, more consumers are gaining access to a wide range of dairy options.

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Technological Innovations and Product Development

Technological advancements have played a key role in shaping the South Korea dairy market. The introduction of functional dairy products that combine health benefits with traditional dairy has significantly broadened the market. For example, probiotics and prebiotics have become key ingredients in dairy products such as yoghurt and fermented milk, catering to the growing demand for gut health solutions. The introduction of lactose-free dairy products is another innovation designed to meet the needs of lactose-intolerant consumers, providing them with the same nutritional benefits without the discomfort.

Additionally, the growing popularity of plant-based diets has led to an increase in the demand for dairy alternatives. With the rise of veganism and an increasing number of South Koreans opting for plant-based diets, dairy substitutes such as plant-based milk (e.g., soy, almond, and oat milk), vegan cheese, and dairy-free ice cream have gained traction. Although these products are not classified within traditional dairy, they are increasingly being formulated with ingredients that mimic the taste and texture of dairy, leading to a growing segment of the market.

In response to these trends, traditional dairy companies are diversifying their product offerings to include plant-based alternatives, catering to the vegan and lactose-intolerant segments. Major dairy producers in South Korea are investing in research and development to improve the taste, texture, and nutritional profile of plant-based dairy alternatives, ensuring that they meet the demand for healthier, more sustainable options.

South Korea Dairy Market Segmentation

The market can be divided based on product, and distribution channel.

Market Breakup by Product

• Milk
• Dry Milk
  • Non Fat
  • Full Fat
• Cheese
  • Natural
  • Processed
• Yogurt
• Butter
• Baby Formula
• Condensed Milk

Market Breakup by Distribution Channel

• Supermarkets and Hypermarkets
• Convenience Stores and Discount Stores
• Speciality Stores
• Online
• Department Stores

Competitive Landscape

The EMR report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the South Korea dairy market. Some of the major players explored in the report by Expert Market Research are as follows:

• Maeil Co.Ltd
• Namyang Dairy Products Co., Ltd.
• Seoul Milk Cooperative
• Dairyzen Co., Ltd
• Nestlé SA
• Others

Challenges and Restraints

Despite the positive growth outlook, the South Korea dairy market faces certain challenges that could temper its expansion. One key restraint is the aging population in the country, which can limit the market’s growth. Older consumers tend to consume fewer dairy products due to issues related to lactose intolerance or declining appetite, which could affect overall demand. Additionally, the declining birth rate in South Korea may also result in fewer young consumers entering the market, potentially limiting future demand.

The competitive nature of the dairy market also poses a challenge for producers. With numerous local and international players in the market, companies must continuously innovate to stand out in a crowded field. The market is seeing increased competition from plant-based milk and dairy alternatives, which are often marketed as healthier or more sustainable alternatives to traditional dairy products. Dairy producers must not only contend with these substitutes but also address consumer concerns regarding environmental impact and animal welfare.

Moreover, fluctuating raw material prices, such as the cost of milk, can impact the profitability of dairy producers. The cost of raw milk and other key dairy ingredients is subject to market volatility, influenced by factors such as weather conditions, supply chain disruptions, and changing agricultural policies. Such fluctuations can make it challenging for dairy producers to maintain consistent product pricing, which may affect both consumer demand and profitability.

The Impact of COVID-19 on the Market

The COVID-19 pandemic had a significant impact on the South Korea dairy market, both in terms of consumer behavior and production. During the early stages of the pandemic, there was an initial surge in demand for staple dairy products, such as milk and yoghurt, as consumers sought to stock up on essential groceries. However, as the pandemic continued, there were shifts in consumer spending patterns, with an increased focus on health and immunity-boosting products.

The demand for functional dairy products, such as probiotic yoghurt and fortified milk, saw an increase, driven by consumer interest in boosting immunity and overall health during the pandemic. Additionally, the closure of foodservice outlets and schools led to a decline in the demand for bulk dairy products typically used in foodservice settings, but this was offset by increased demand from retail channels.

Despite these challenges, the South Korea dairy industry demonstrated resilience, with production adapting to meet new consumer needs. The growth of e-commerce during the pandemic also allowed dairy producers to expand their reach to consumers who were increasingly shopping online for groceries.

Future Outlook

Looking ahead, the South Korea dairy market is expected to continue its growth trajectory, driven by increasing health consciousness, product innovation, and the rise of dairy alternatives. As consumers become more focused on health, nutrition, and sustainability, dairy producers will need to align their offerings with these evolving preferences. Innovations in functional dairy, plant-based alternatives, and convenience products will continue to be crucial in meeting the changing demands of South Korean consumers.

With growing awareness of sustainability and environmental issues, companies will likely place greater emphasis on responsible sourcing, ethical production practices, and environmentally friendly packaging. These factors will play an increasingly important role in influencing consumer purchasing decisions.

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