Kerrygold will soon be on the shelves of supermarkets in South Korea
Kerrygold will soon be on the shelves of supermarkets in South Korea as Ornua try to tap into the growing appetite for butter in the middle-class Asian marketplace.
The new product was unveiled by Agriculture Minister Michael Creed TD on Friday at a launch in Seoul during the Irish Trade Mission to South Korea and Japan.
John Jordan, CEO of Ornua EMEA and Asia, said opening new markets such as South Korea was central to its aim to develop Kerrygold from a butter brand into a €1bn global dairy brand.
With record annual retail sales of €900m last year, Kerrygold butter is already on shelves in China, Singapore and Malaysia.
The countries have been flagged as having milk deficits, offering significant potential for the Irish market.
“My personal belief is that in 20 years Asia will be the largest market for Irish dairy export,” said Shanghai-based Sean Ryan, general manager with Ornua Asia. “That takes time, it is not going to happen overnight.”
Mr Ryan explained from next year they were also aiming to sell cheese in Vietnam as well, and in the future plan to sell into Indonesia and other markets in the south.
“We are expanding our footprint in the region. Two years ago we were only in China,” he said, adding the region was a growing market with a huge population base and expanding middle class.
Mr Ryan said the dairy giant was interested in the South Korean market as it was highly developed with an appetite for high-quality produce.
South Korea is the 11th largest economy in the world, with a GDP of €1.2 trillion and a heavily urbanised population of over 51 million.
Consumption of dairy products is rising fast in South Korea, as the economy mirrors trends in other neighbouring countries and it is currently importing 150,000mt of cheese and butter.
“Recently the trend for pasture fed cows and milk has become something that the Korean customer has become aware of and the natural pure image,” said Mr Ryan.
Ireland’s largest dairy produce exporter has teamed up with one of Korea’s major firms Namyang Dairy to distribute it through department stores in 227gm packs.
Mr Ryan said there was a good opportunity but they were in at the “ground floor” with aims of selling 30-40 tonnes of butter next year.
“The retail price of butter in Korea is quite expensive compared to the European market. It works out at about €7-9 for 200gm,” he said, with the butter placed in an eye-catching silver box on the shelves.
He said personal consumption of butter was growing as consumers switched over from margarine products.
Mr Creed said the expansion of Kerrygold into South Korea establishes another important route for Irish dairy. “As we prepare for a post Brexit environment, it is critical that we build these new markets for premium Irish dairy products,” he said.
Amid concerns over the potential impact of Brexit on Ireland’s cheddar cheese exports into the UK, Mr Ryan explained they were also aiming to sell other butter products and cheddar cheese into the Korean market.
“Consumption of cheddar in the UK is huge compared to Asia,” he said. “The great thing about the Asian market is that when tastes develop they develop fast.”
Mr Ryan said the EU-Japan partnership agreement currently had no start date but would be a big opportunity in the future.
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