Hot for the Summer: Rise of Low-calorie Indulgences in South Korea

Surges of Low-calorie Sales in South Korea

Coined from the phrase ‘guilty pleasure,’ healthy pleasure has been a rising trend among Gen Zs and Millennials in South Korea. The term was first invented by a professor at Seoul National University in 2022, describing the trend of young consumers seeking healthy desserts that cater to their preferences. Healthy pleasures enable them to enjoy their favorite treats without compromising their dietary goals, moving away from the traditional notion of bland 'healthy products.'

While zero-sugar and low-calorie products have been popping up in different food categories, specific food groups have experienced notable surges in popularity. For example, non-sugar and zero-calorie carbonated drinks have seen significant demand and sales. According to a 2023 market study, zero-calorie beverage sales have steadily increased year-over-year (YoY), from a market size of KRW 92.4 billion in 2020 to KRW 368.3 billion in 2022. For the first time, sales of zero-calorie drinks from Jan-24 to Apr-24 exceeded more than half of total carbonated beverage sales in GS25, one of the largest chain of convenience stores in the country.

Percentage of Zero-Calorie Drinks out of Total Carbonated Beverage Sales (2022-2024)

Source: GS25

It is common to find a diverse array of zero-calorie carbonated drinks in South Korea, especially in major retailers such as Emart, Lotte Mart, and Homeplus, which are considered the 'big three' offline retailers in South Korea. Tridge has observed zero-calorie zones in the beverage aisle, indicating the high popularity and demand for non-sugar beverages. This reflects the growing consumer trend of seeking healthy alternatives. The zero-calorie trend has also spread to sweet desserts, with Lalasweet taking the lead.

Zero-Calorie Zone in E Mart & Homeplus

Source: Tridge

Low-Calorie Trend: Tapping into the Ice Cream Market

Based on Naver, South Korea’s dominant search engine, the search term ‘low-sugar ice cream’ started trending at the end of 2023 and peaked around Apr-24. This peak corresponds to the success of Lalasweet, a premium low-calorie Ice cream brand launched as a differentiated product in CU, another leading chain of convenience stores.

'Low-Sugar Ice Cream' Naver Search Results (May-21 to May-24)

Source: Naver

Launched on May-22, Lalasweet gained rapid popularity among the 20 to 30 age group through word of mouth and social media for its low calorie and sugar. Compared to May-22, Lalasweet sales increased 76 times in Apr-24, reaching record sales of 4.4 million units in the first four months in 2024, exceeding cumulative sales in the previous two years.

Units of Lalasweet Ice Cream Sold (2022-2024)

Source: CU

Forces driving the Low-Calorie trend in the Ice Cream Market

A single bar of Lalasweet is priced in the KRW 3,000 range, higher than the average ice cream bar, which ranges around KRW 600 to KRW 2,000, depending on the distribution channel. Despite the premium cost and rising inflation, exceeding the average OECD food inflation of 5.32% to 6.95% in Feb-24, the increase in Lalasweet sales is an indication of the strong consumer buying behavior prioritizing health and a driver of the ‘health pleasure’ trend.

Most SearchedLalasweet Ice Cream

Source: CU

Another factor explaining the healthy pleasure trend is the increasing ice cream prices in South Korea. According to the Korea Consumer Organization Council, ice cream prices increased the most in Q4-24, the highest increase among the 39 food items it observed. Hence, investing slightly more in low-calorie premium ice cream, especially amid the rising prices of high-sugar alternatives, has bolstered the success of Lalasweet, enabling it to surpass some of South Korea's major food giants.

Lalasweet has been selected as a bestseller in major e-commerce platforms, including Market Kurly, Coupang, and B-Mart. In addition, CU announced in Apr-24 that Lalasweet’s ‘Chocolate Chocobar’ ranked first in both sales value and sales volume, surpassing Melona and World Cone, which are steady sellers from the two leading market players — Lotte Wellfood and Binggrae.

Market Share Expansion Through Low-Calorie Product Line Growth

In light of Lalasweet's success and with summer right around the corner, when demand for ice cream peaks, Korean food giants have been releasing their own low-calorie and non-sugar ice creams.

Lotte Wellfood, which occupies 39.86% of the domestic ice cream market, launched zero-calorie versions of some of their best sellers – Screw Bar-0kcal and Jaws Bar - 0kcal in Apr-24. The company announced that it sold around 7.2 million units of both products within a month of the release, exceeding its expected volume of 3.2 million. Direct competitor and the second largest domestic ice cream maker with 39.85% market share, Binggrae also launched ‘Power Cap Blue Ice Zero’ and ‘Polapo Coffee Zero Sugar.’ Given the tight competition between the two market leaders in terms of market share, the one with greater low-calorie sales is anticipated to clinch the top position.

The ice cream market, which has seen a decrease in market size since 2015 after exceeding a market share of KRW 2 trillion, is expected to grow in 2024 as companies tap into this growing market of healthy consumers. More companies are expected to expand their product line with more low-calorie and zero-sugar products in line with the healthy pleasure trend. The growing health-conscious consumer base in South Korea could also potentially attract overseas brands looking to expand and drive their growth in other markets.