Maeil cracks China’s alternative milk market with Starbucks deal

South Korea’s Maeil Dairies Co. has jumped into China’s alternative milk market, worth $17 billion in 2022, by supplying Almond Breeze Barista drinks to about 6,000 Starbucks stores in China, the company said on Tuesday.

It marked Maeil’s first cross-border deal for the plant-based drink product. Under the contract, Starbucks China will unveil new menu items such as Caramel Mousse Almond Latte based on the alternative milk this month.

It will continue to develop new beverages using Almond Breeze.

Almond Breeze is a nutritious drink made from Californian almonds, boasting more calcium and fewer calories than skim milk and regular soy milk.

Maeil Dairies has been producing the beverage in its Gwangju plant in South Korea under a license agreement with Blue Diamond since 2015.

It is also in the final stage of negotiations to supply its oat milk Amazing Oat to Starbucks’ Chinese outlets from the first half of next year.

Maeil, a leading South Korean dairy, has been pivoting toward alternative milk products to make up for dwindling milk consumption in South Korea.

Milk alternatives have been in growing demand, led by those with gluten intolerance and vegans, alongside the increasing awareness of environmental sustainability.

China’s alternative milk market expanded to 22.9 trillion won ($17 billion) in 2022, versus 17.4 trillion won two years earlier, according to research firm Euromonitor.

The supply deal with Starbucks China is expected to lay the foundation for Maeil Dairies to build its presence in China’s plant-based drink market.

But the Korean company may find it challenging to penetrate deep into China, where global brands such as Nestle, Coca-Cola and Sweden-based Oatly have been aggressive in building their positions.

“Chinese people have different flavor preferences by region,” said a food industry official.

“Local companies producing soy milk and almond milk there have different market shares by region. It’s a hard market to crack.”

Write to Soo-Jung Ha at agatha77@hankyung.com
Yeonhee Kim edited this article.