With growth stalling in South Korea's health functional food market, pharmaceutical companies are seeking a breakthrough in narrower health needs such as sleep, blood sugar and menopause. The strategy aims to secure growth momentum with products tailored to specific consumer health concerns, moving away from competition centered on general-purpose items such as vitamins and probiotics.
Drugmakers are rolling out products aimed at specific health management goals using individually approved ingredients whose safety and functionality have been recognized by the Ministry of Food and Drug Safety, according to industry sources on the 18th. "As the domestic health functional food market has become saturated, it has become important to target niche demand that existing products have not met," an industry official said. The domestic market was worth 5.96 trillion won ($4.1 billion) last year, up just 0.2% from a year earlier, according to the Korea Health Supplements Association.
Daewon Pharmaceutical (003220.KS) launched Kkuljam Shot, a sleep health product, in February. The product's main ingredient is lime peel extract, an individually approved ingredient that can help improve sleep quality. It comes in a liquid stick form that can be taken without water before bedtime, boosting convenience. Kkuljam Shot is expanding sales through online and offline channels, including placement in about 900 Olive Young stores nationwide.
Combined sales of Kkuljam Shot at Olive Young and e-commerce channels in August were more than five times the March level. Sales rose about 130% in May from the previous month and about 46% in each of June and July, marking six straight months of growth from March through August. First-half revenue at Daewon Pharmaceutical's consumer healthcare division, which handles health functional foods, surged 603.4% from a year earlier to 20.67 billion won. The company is targeting 40 billion won in health functional food sales this year and 100 billion won by 2028.
Yuhan (000100.KS) is targeting demand for post-meal blood sugar management with DangQLac, which uses HAC01, an individually approved probiotic strain. The company differentiated the product by extending the use of probiotics beyond gut health into blood sugar management. Cumulative sales topped 70 billion won as of the third quarter of this year, following the product's launch in 2023. First-half sales came to about 8 billion won, up about 60% from roughly 5 billion won a year earlier. The company is pursuing overseas expansion, including into Latin America, on the back of growing domestic sales.
Menolacto, sold by Huons N, the health functional food affiliate of Huons Group (243070.KS), is a case of building a sales base with a probiotic specialized for women's menopausal health. The product uses YT1, an individually approved probiotic strain that can help with menopausal health and gut health, and cumulative sales surpassed 200 billion won last year after its launch in 2020. Huons N also introduced Menolacto Origin, formulated with YT1 as its sole ingredient, late last year, broadening its product lineup.