Made-in Korea creamer popular overseas

Dongsuh’s Frima sold in Russia

By Lee Hyo-sik

A few decades ago, most Koreans went to traditional teahouses called dabang to drink cups of coffee containing powdered coffee with creamer and sugar.

But these days, many go to coffee chain franchises for Americano or other forms of coffee. A growing number of consumers also prefer instant coffee mix sold in small plastic tubes that only contain coffee powder without creamer and sugar.

Long-running concerns over possible health problems associated with consuming coffee creamer because of its high fat content have created downward pressure on creamer demand here.

However, despite declining domestic sales, Dongsuh Foods and other coffee creamer makers are producing larger quantities year after year on the back of surging overseas demand. In Russia and dozens of other countries, many consumers use creamer not only as a coffee or tea additive, but also as a type of seasoning to make their dishes taste better.

Dongsuh, Korea’s largest instant coffee mix and creamer manufacturer, said its production of “Frima,” the country’s oldest and most popular coffee creamer, has increased over the past few years, despite the falling local demand. The firm produced 78,122 tons last year, up from 77,605 in 2011.

Frima sales here fell to 51,263 tons in 2012 from 52,390 tons the previous year. The sales are projected to drop further to 44,355 tons this year.

In contrast, Dongsuh shipped 26,859 tons of Frima overseas in 2012, up from 25,215 tons a year earlier, thanks to rising overseas demand. The 2013 exports are forecast to reach 32,918 tons, accounting for 42.6 percent of the total production, up sharply from 34.4 percent in 2012.

“In 1982, we first exported Frima to Hong Kong and earned $170,000. Now, we are exporting it to 27 countries around the world,” said a Dongsuh spokesman, Choi Kyung-tae. “We earned a combined $34 million in sales last year. The figure will soar to $70 million this year and $100 million in 2015.” Frima accounts for over 95 percent of the local creamer market.

Choi said unlike in Korea where creamer is consumed only as a coffee or tea additive, it is used in diverse ways in Russia, Kazakhstan and other Central Asian nations.

“Consumers there use Frima when baking bread or cookies, as well as while cooking a wide range of dishes. It eases the sweetness, sourness and other extreme tastes of food ingredients. This is why it became popular in Central Asia. Frima is also widely sold in the United States and Southeast Asia,” said the spokesman.

Frima accounts for 71 percent of Kazakhstan’s creamer market. It has also captured over 50 percent of the market share in other Central Asian countries.

The company has and will continue to introduce a wide range of marketing activities to make Frima a household necessity there. In 2012, Dongsuh sold Frima worth $6.8 million in Central Asia, up eight-fold from $860,000 in 2001.

“It is sold not only in emerging economies, but also in the United States, Singapore, Australia and other advanced countries which apply stricter food safety guidelines. This shows that Frima is safe and is viewed as an excellent product,” Choi said.

On the back of “hallyu,” or the Korean cultural wave, the company has seen explosive growth in the overseas sale of Frima in recent years, particularly in Japan.

In February 2012, Dongsuh signed a long-term sales contract with Ajinomoto General Food to supply Frima worth over $100 million in Japan over the next decade. Ajinomoto is one of Japan’s two largest food firms that shares the market with Nestle.

“We believe that we can be successful in promoting Frima not only in emerging countries, but also in advanced nations, thanks to its high quality and diverse usage. Additionally, it has been proven safe for human consumption. Anyone can enjoy Frima without any health concerns,” the spokesman said.

Frima is made from vegetable palm oil, meaning that it contains no cholesterol or trans fats, Dongsuh said. It also contains corn starch sugar and milk protein.