Namyang Dairy Food Service (FS) division staff interview scene. From left: Kim Deok-yong, Sales Team 1 Manager, Yoon Joo-won, Planning Team Leader, Kim Dong-hee, Division Head, Lee Soo-hwan, Sales Team 2 Manager. [Photo=Namyang Dairy]
Namyang Dairy's Food Service (FS) division is shifting from simple raw milk supply to a 'solution supply' model, participating in menu development from the early stages with partners.
On June 12, Namyang Dairy announced that its FS division's revenue grew by 13% in the first quarter compared to the same period last year, marking the highest growth rate among domestic distribution channels.
The expansion of transactions across various channels, including franchise cafes, group meals, and military supply, has been the main driver of this growth. The company aims for double-digit revenue growth this year compared to the previous year.
Overall performance in the first quarter also showed improvement. Namyang Dairy reported an operating profit of 500 million won, a 572% increase from the same period last year. Revenue during the same period rose by 4.4% to 225.2 billion won.
Export performance surged to 16.4 billion won, an 81% increase, with powdered milk exports to Cambodia and Vietnam rising by 54%.
With a structural shift necessitated by reduced personal consumption of white milk, Namyang Dairy is strategically absorbing new demand from the cafe, restaurant, and meal service markets to lower its reliance on business-to-consumer (B2C) channels.
Following a management system change in 2024, the company consolidated its business-to-business (B2B) functions, previously scattered among various teams, into the FS division and established specialized organizations for each channel.
As a result, the average daily B2B supply volume of white milk more than doubled (+125%) in the first quarter compared to 2023, according to Namyang Dairy.
The most notable change is the transition to a solution supply model. The company has hired specialized research and development (R&D) personnel and established a collaborative system with research institutes to participate in menu development with partners from the outset.
For instance, Namyang Dairy has co-developed a signature latte milk base with a franchise, supplying it as a brand-specific carton product.
Additionally, the company has established a system to coordinate the supply of materials and production plans in advance to meet increasing sales, while sourcing items with unstable domestic production conditions from overseas.
The military supply channel is also steadily growing through products designed for military use, such as five varieties of Choco Emong. With its solution-oriented approach yielding results, Namyang Dairy currently supplies products to five out of 15 major franchise cafe brands.
Kim Dong-hee, head of Namyang Dairy's FS division, stated, "While current growth is significant, it is more important to refine the profit structure by channel as we grow. We will enhance our food service competitiveness based on differentiated value that encompasses everything from menu development to supply stability."
* This article has been translated by AI.
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