Market Information > Food News Clipping
Food News Clipping
August 8 - 14, 2020
FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date: Friday, August 14, 2020
For Coverage: August 8 ~ 14, 2020
Retailers Announce Gift Set Programs for Upcoming Chu-Suk Thanksgiving Day
Summary: Major retail companies have announced this week their gift set programs for the upcoming Chu-Suk (Korean Thanksgiving Day) season. Chu-Suk this year (September 30 - October 2) is still 10 weeks away, but retailers decided to launch the gift set programs almost two weeks earlier than usual to boost sales in the face of serious challenges due to on-going COVID-19 outbreaks. Retailers plan to expand on-line offers this year to cope with increased consumer demand for "untact" shopping. The number of products offered on-line will increase 30 to 70 percent this year. For example, Shinsegae Department Store has increased its Chu-Suk gift sets for on-line orders to 280.
Chicken Price Surges 34% due to Flood Damage
Summary: The Korea Poultry Association reported that the ex-farm chicken price increased 34 percent on average this week as a result of significant flood damage to local breeding farms. According to the Korea Ministry of Agriculture, Food and Rural Affairs, local farms lost 1.6 million birds during the summer rainy season this year. Marketers expect that it will take about a month for the farms to recover from the flood damage. Considering high demand for chicken meat during the summer (partly for chicken-ginseng soup enjoyed by the public as a summer healthy recipe), the price will likely remain quite high until the end of September.
Haenam County Celebrates Its First Banana Harvest ... Global Warming Brings New Opportunity for Tropical Fruits
Summary: Haenam county in Junranam province reported that a local farm harvested bananas for the first time on August 13. The greenhouse farm was established last year with 470 trees planted on 0.2 hectare of land. There is another farm, also established last year, in the country and the two farms together will harvest 12 metric tons of bananas this season. Haenam country plans to support local banana growers with a goal of expanding acreage to 1 hectare and annual production to 25 metric tons. The country has also been helping local farms to adopt other tropical fruits in recent years, including passion fruit, apple mango, cherries and black currant, as local climate continues to change due to global warming.
Food Subscription Service Expands in Korea
Summary: Korea Agro-Fisheries & Food Trade Corporation (aT) reported on August 14 outcomes of its recent survey on food subscription services in Korea. The survey of 1,374 people indicated that 57.2 percent of Korean consumers were already shopping for food via subscription services. People in their forties had the highest subscription service usage (60.2 percent), whereas people in their twenties had the lowest usage (49 percent). This result is in line with the fact that people in their forties are also the leading consumer in the conventional food market with the strongest purchasing power. Top products that consumers purchased via subscription services were regular processed foods (32.7%), meal kits for home cooking (30.8%), and lunch boxes (21%).
'On-line Delivery Only' Stores by Now Pick and B Mart Compete Against Convenience Stores
Summary: There is a new on-line retail business emerging in the market led by Now Pick and B Mart. Both companies operate a small number of 'on-line delivery only' stores in Seoul. They offer 'within 30 minutes' quick home delivery regardless of purchase amount (3,000 won or $2.5 dollars of delivery fee is charged per delivery). The stores looks like a small warehouse, carrying some 3,000 SKU of products, and does not sell to walk-in shoppers. Target consumers are people living alone or office workers who have limited needs or time to shop in large stores. Current top selling products are bottled water and Home Meal Replacement prepared foods. Marketers agree that the 'on-line delivery only' stores present new competition to the convenience store industry. Convenience stores face stagnant growth as there is not much room in the market to add additional stores. There are over 45,000 convenience stores through Korea and the number has not been growing in recent years. Leading convenience store chains recently started to offer on-line home delivery service.
Three out of Four Koreans Continue to Participate in Anti-Japan Boycott Campaign
Summary: Korea Broadcasting Advertisement Agency (KOBACO) reported on August 12 outcomes of its recent consumer survey on anti-Japan sentiment. The anti-Japan boycott campaign started in Korea last year after Japan banned exports of key electronic parts needed by manufacturers to Korea. 75 percent of consumers (78 percent of women and 72 percent of men) surveyed replied that they are still participating in the anti-Japan boycott campaign, minimizing Japanese products in their shopping. Key Japanese products that Korean shoppers purchased less since last year were fashion goods (56 percent of the people surveyed replied that they opted for non-Japanese products), alcoholic beverages (43 percent), household goods (37 percent), food and agricultural products (36 percent), and cosmetics (34 percent). 69 percent of the consumers replied that they experienced no difficulty in maintaining normal life without purchasing Japanese products. 53 percent of consumers said that the campaign will last for another two years at least.
MAFRA Launches a New Black Skin Swine Breeding Program to Compete Against Spanish Iberico Pork
Summary: Korea Agricultural Development Agency (ADA) under the Ministry of Agriculture, Food and Rural Affairs (MAFRA) reported on August 12 that it launched 'Woo Ri Heuk Don' breeding program with the local swine industry. The program targets to replace imported genetics for black skin swine widely used in local farms. According to ADA, local farms currently breed 190,000 heads of black skin swine, with 87 percent of them based on imported genetics. ADA said that existing local genetics for black skin swine were inferior to imported genetics. The new breed developed by ADA, 'Woo Ri Heuk Don', has the quality that can compete against imported genetics in terms of fat contents and production timeline. Korean consumers want higher quality pork meat as indicated by the fact that imports of Spanish Iberico pork are increasing sharply. ADA expects that 'Woo Ri Heuk Don' should be able to take back some of the consumer demand for Iberico pork.
Korean Food Processors Report Strong Global Sales Despite COVID-19
Summary: Leading Korean food processors have reported strong sales growth in foreign markets this year despite COVID-19 challenges. For example, Nongshim Co., the leading instant noodle processor, will likely see its global market sales grow 19 percent in 2020 to $1 billion. CJ Cheiljedang, Korea’s leading food processer, will likely generate $7.2 billion of global sales in 2020, up 17 percent from 2019. Orion, the leading snack processor, will likely generate $1.2 billion of global sales in 2020, up 13 percent from 2019. Korean processors have increased their marketing efforts in key global markets this year, including the United States and China, building new distribution partnerships with some of leading global retailers, including Amazon, Wal Mart, and Costco. The processors have also expanded production facilities in foreign markets.
COVID-19 Brings Drastic Changes in Global Food Industry, KITA Report
Summary: Korea International Trade Association (KITA) has recently released a report titled “Post COVID-19 Era, Changes in Food Consumption Behaviors and Strategy to Enter Global Market”. According to the report, the pandemic has increased global consumer preference for cost-effective and healthy food products. For example, the compound annual growth rate (CAGR) of global health and functional food industry rose to 6 percent in 2020 since COVID-19, up sharply from 3.1 percent CAGR recorded between 2015 through 2019. The report also noted that food companies have increased domestic sourcing and marketing in response to international shipping restrictions. Another important market shift is increased consumer shopping at on-line retailers and nearby neighborhood stores.
WeMakePrice Introduces Free Return Policy for Fresh Agricultural Products If Consumers are Not Satisfied
Summary: WeMakePrice, a leading on-line retailer in South Korea, announced a 'free return policy' for meat and tree nut products on August 10. WeMakePrice said that consumers may return purchases if they find the products unsatisfactory in quality. The policy will be extended to all other fresh agricultural products next month.
Vietnam Opens Market for Korean Paprika ... Signs Quarantine Agreement
Summary: Korea Ministry of Agriculture, Food and Rural Affairs (MAFRA) announced on August 10 that it signed a quarantine agreement with the Vietnamese government to export Korean grown paprika. Korea exported $91 million of paprika in 2019. Japan has been the major export market for Korean paprika, taking over 99 percent of Korean paprika exports in 2019. MAFRA said that Vietnam will generate new export opportunities.
Unprecedented Downpour Raises Vegetable Prices
Summary: Unprecedented downpours have devastated crops and are disrupting the supply chain of agricultural products. As a result, on August 13th hypermarket prices for agricultural products are expected to rise and continue until Korean Thanksgiving Day (September 15th). However, soaring prices of agricultural products have already been observed in the market; prices have risen by two to threefold over the last two weeks. According to the Korea Agro-Fisheries & Food Trade Corporation (aT), the selling price for zucchini, spinach, and winter cabbage on August 7th have each risen by 211, 174, and 130 percent respectively compared to July 24th.