Nongshim Kellogg overtakes Dongsuh as Korea’s top cereal maker

Just a few years back, cereals meant cornflakes eaten with milk during busy mornings in South Korea.

Nowadays, however, cereals mean granola made of whole grains and nuts to many Koreans, particularly those young people conscious of healthy food, creating a trend called “Healthy Pleasure” across the country.

Riding on the health trend, Nonghshim Kellogg Co., a joint venture between Nongshim Co. and US food maker Kellanova, formerly known as Kellogg, has overtaken Dongsuh Foods Corp. as Korea’s top cereal maker.

According to the Korea Agro-Fisheries & Food Trade Corp. (aT) on Thursday, Nongshim Kellogg’s domestic cereal and granola market share stood at 45.9% in terms of retail sales at the end of 2023, followed by Dongsuh Foods’ 44.4%. Orion Corp. ranked third with a 5.7% market share.

In 2020, Dongsuh controlled 51% of the market, far ahead of Nongshim Kellogg’s 42.3%. But Dongsuh’s market share gap with its closest rival has since narrowed and then reversed in Nongshim Kellogg’s favor.

Industry officials said Dongsuh Foods, a 50-50 joint venture between Korea’s Dongsuh Co. and US food firm Mondelez International Inc., was behind Nongshim Kellogg in developing new granola products palatable to Korean tastes.

GRANOLA APPEALS TO YOUNG FEMALE CONSUMERS

According to market research firm Euromonitor, the Korean market for granola products, including Muesli, overtook the cornflake-based cereal market for the first time in 2020.

In 2023, the domestic granola market grew to 156.7 billion won ($116 million) compared with the cereal market’s 68.1 billion won.

The market gap between the two types of quick meals is forecast to widen to over 100 billion won next year, analysts said.

Granola is more expensive than flakes but contains less sugar and sodium and is rich in dietary fiber, appealing to young female consumers who these days enjoy the culture of eating Greek yogurt with granola, industry watchers said.

NEW PRODUCTS

To take advantage of the growing popularity of granola in Korea, Nongshim Kellogg last year launched five new granola-based products, including All-Bran Granola and Dark Chocolate Protein Delight.

“Our marketing strategy focused on online sales through live broadcasts helped us grab the top spot,” said a Nongshim Kellogg official.

Last August, the company said it is also entering the domestic instant rice market by launching "Whole Oat Rice," a product made of 100% oat groats.

Dongsuh Foods, which currently sells more cornflake-based cereal products than granola, aims to regain the market lead by launching several granola-based products, including a granola cereal bar.

Write to Hun-Hyoung Ha at hhh@hankyung.com
In-Soo Nam edited this article.