In the dynamic markets of Japan and South Korea, Fonterra has emerged as a crucial player in the evolving world of functional dairy ingredients.
These countries represent a unique combination of demographic shifts, health consciousness and culinary innovation that is transforming the dairy landscape. With Japan boasting more than 90,000 centenarians and South Korea projected to have 20% of its population over 65 by 2025, the region has become the heart for nutritional innovation focused on active aging and wellness.
In Japan, the Co-operative’s joint venture with Nissei Kyoeki, established 40 years ago, has been instrumental in entering the protein ingredients market. In 1982, Fonterra Co-operative Group Limited and Nisshin Kyoeki founded Fonterra (Japan) Limited, a 50/50 joint venture specialising in importing and marketing dairy products such as natural cheese, butter, skim milk powder and whey protein in Japan. To this day, the joint venture successfully leverages the Co-operative’s expertise in dairy production and Nisshin Kyoeki’s strong market presence to meet the growing Japanese demand for high-quality dairy ingredients.
The economic scale of Fonterra’s North Asian operations is considerable.
In Japan, consumers are willingly paying up to 50% premium for foods with functional claims, with products typically retailing at one and a half times the price of other foods. The Co-operative accounts for 30% of the country’s cheese and 40% of milk protein, with the country’s domestic dairy production dropping more than 10% since 2000, as it struggles to attract younger farmers. This creates an opportunity for importers like Fonterra to play a crucial role in meeting the region’s dairy demands.
South Korea has witnessed an even more dramatic transformation, with cheese consumption soaring by 160% over the past decade, propelled by Western dietary influences.
The growth of Western influences
As Western dietary influences continue to shape food trends in Korea, one standout example is the meteoric rise of Buldak Fire noodles, which have become a cultural phenomenon both domestically and abroad. Originally launched in 2010, the brand gained breakout popularity around 2017, with the intensely spicy Buldak Red Fire noodles becoming a favourite in Korea.
To appeal to more adventurous Western palates, particularly those less accustomed to extreme heat, the Carbonara Fire flavour was developed using one of Fonterra’s specialised ingredients creating a creamy flavour. This variant quickly gained traction among young Americans, becoming a viral sensation through social media platforms where influencers and fans created spicy food challenges, memes, and with the dish also served at Coachella. Its success has led to widespread availability in major U.S. retailers – highlighting the growing impact of Western tastes on Korean food innovation.
Fonterra’s Whey Protein Isolate (WPI), Whey Protein Concentrate (WPC), and Milk Protein Concentrate (MPC) have become essential to a diverse range of products from ready-to-mix protein powders to fortified yoghurts for medical nutrition and sports supplements.
Beyond basic nutrition
Fonterra’s approach to North Asia revolves around delivering dairy ingredients that exceed basic nutrition. The Co-operative’s proteins are designed to support muscle maintenance, improve mood through dairy lipids and enhance immunity. This approach perfectly aligns with the regional demand for nutraceuticals – foods offering health benefits beyond traditional nutrition.
The protein market stands at the forefront of this innovation. Fonterra’s Whey Protein Isolate (WPI), Whey Protein Concentrate (WPC), and Milk Protein Concentrate (MPC) have become essential to a diverse range of products from ready-to-mix protein powders to fortified yoghurts for medical nutrition and sports supplements.
Partnerships driving success
Fonterra’s success in North Asia is built on strategic partnerships with leading companies that understand and deliver on consumer needs.
The customers illustrate Fonterra’s impact. Meiji, a dairy and confectionery giant, uses Fonterra’s proteins in its medical food and beverages particularly a high-protein, nutritionally balanced drink with the highest market share in its category ,and hailed by Meiji as the most common liquid nutrition used in Japanese hospitals.
What’s next for dairy in North Asia?
The region’s dairy market is characterised by sophisticated consumer preferences. Taste remains fundamental, with Korean consumers particularly sensitive to flavour profiles and mouthfeel. The liquid protein sector is expanding beyond traditional boundaries, including medical nutrition, lifestyle beverages, and innovative products targeting the 65-year plus demographic.
Sustainability is also becoming a critical decider for customers and consumers across the region. Grass-fed dairy from New Zealand is increasingly recognised and sought after, reflecting a growing consumer consciousness about environmental and ethical production methods.
Source : DAirynews7x7 July 31st 2025 Fonterra’s press release