Market Information > Food News Clipping
Food News Clipping
May 13 - 20, 2020
FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date: Wednesday, May 20, 2020
For Coverage: May 13 ~ 20, 2020
Korean Government Eases Alcoholic Beverage Regulations … Nitrogen is Allowed in Beer … Contract Breweries and Distillers are Allowed
Summary: The Korean government announced the loosening of some regulations on alcoholic beverages on May 19. Key revisions include: 1) nitrogen is allowed in processing of beer so local breweries can produce products like Guinness Stout; 2) breweries and distillers are allowed to purchase from outside contract breweries and distillers; 3) home delivery orders are allowed if the value of alcoholic beverage included in the order is below the value of food products; 4) shipping of alcoholic beverages by third-party logistics providers is allowed. The Korean government commented in the press briefing that it is not currently considering expansion of the volume-based liquor tax to distilled spirits including whiskey and soju. Some in the local alcoholic beverage trade have commented that government regulation changes only favor beer and local traditional liquor processors.
Korean Govt Expands Subsidy Program for Environment-friendly Agricultural Product Purchases by Pregnant Mothers
Summary: The Korea Ministry of Food, Agriculture, and Rural Affairs (MAFRA) reported on May 19 that its subsidy program to help pregnant women purchase environment-friendly agricultural products will be expanded to cover 80,000 recipients this year (from 45,000 recipients last year). The subsidy program provides up to 480,000 won ($384 USD) of financial support a year per a registered recipient for purchases of environment-friendly agricultural products from designated vendors. The recipient is required to pay a flat annual fee of 96,000 won ($77 USD) to receive the subsidy.
of Local Hanwoo Beef Hit a Record High due to COVID-19
Summary: The wholesale auction market price of Hanwoo beef reached a record 19,906 won per kilogram ($15.9 USD) this week, up 13 percent from the same season last year. Increased home consumption and reduced imports during the COVID-19 outbreak have driven up the Hanwoo beef price.
Processors Work with Michelin Star Restaurants to Offer Premium Products
Summary: According to Korea Agro-Fishery Marketing Corporation (aT), cash-register sales of Home Meal Replacement (HMR) products in Korea amounted to 4 trillion won ($3.5 billion USD) in 2019. aT forecasts that the HMR industry will experience double digit growth in coming years as consumer demand for quick and easy meal options continues to increase. Leading processors and retailers in South Korea are making extra efforts to expand their HMR product business. One recent trend in the industry is collaborating with Michelin star chefs to create premium products. For example, EMART, the leading hypermarket grocery store chain in Korea, reported that it will develop 20 premium HMR products through collaboration projects with Michelin star chefs by the end of this year. EMART will also add 50 new products to its 'Popular Restaurant Recipe' brand program this year.
Convenience Stores Report Sales Growth for Fresh Agricultural Products during the COVID-19 Outbreak
Summary: Major convenience store chains in South Korea reported strong sales growth for fresh agricultural products during the COVID-19 outbreak this year. For example, CU, the leading player in the industry, reported 70 percent, 35 percent, and 72 percent growth for fresh vegetables, fruit, and grains respectively in April. According to marketers, more consumers are shopping for home cooking ingredients at neighborhood convenience stores due to COVID-19 concerns.
Food-Health Becomes the Top Product Category for On-line Shopping This Year, DMC Media Survey
Summary: “Food-health” was the most purchased product category in on-line shopping this year according to a consumer survey by market research firm DMC Media. One thousand people in their 20's to 50's were surveyed. 56.8 percent of respondents said they purchased food-health products on-line, followed by fashion (54.2 percent), beauty-cosmetics (38.7 percent), and kitchen-household products (37.3 percent). Fashion was the top product until last year. On average survey respondents said they shopped on-line 7.3 times a month and spent 420,000 won ($336 USD).
F&B Launches 'ChuChu.com', Pet Care On-line Shopping Mall
Summary: Dongwon F&B, a major food processor in South Korea, announced that it launched pet product on-line shopping mall chuchu.com on May 18. The on-line platform offers a wide variety of pet care products, including Dongwon F&B's premium pet food 'NutriPlan'. Dongwon F&B reported said the pet care product market in Korea will generate 2 trillion won ($1.6 billion USD) in cash-register sales this year and Dongwon F&B intends to become a leading player.
Korean Agricultural Machinery Manufacturers Report Strong 1Q Outcomes ... Exports Led Growth
Summary: Major Korean agricultural machinery manufacturers have reported strong sales and earnings during the first quarter this year despite COVID-19. Daedong Machinery, the leading player in the industry, reported that its sales during the first quarter amounted to 182 billion won ($146 million USD), up 28 percent from the same period last year. While local sales increased 5 percent to 100 billion won ($80 million USD) during the quarter, export sales increased 74 percent to 82 billion ($66 million USD) due to strong growth in the North American market. Daedong's main portfolio is a line of small size tractors.
Shopping Co. Expedites Restructuring Plan … 120 Stores will be Closed This Year
Summary: Lotte Shopping Co., a leading retail company in South Korea, reported on May 15 that it will expedite its restructuring plan announced earlier this year (closing of some 200 stores over the next 5 years) and close 120 stores this year. The 120 stores to be closed this year include 5 department stores, 16 hypermarket stores, 74 grocery supermarkets, and 25 LOBS health & beauty stores.
Government COVID-19 Support Funds Bring Strong Consumer Traffic to Street Markets
Summary: The Korean government started providing COVID-19 support funds to families on May 11 (as high as $800 USD for a family of four or more). The funds can only be used to shop at small and medium size retailers and restaurants. As a result, local street markets saw quick growth in shoppers the following week.
Promote Foods for TV Spectators as Professional Sport Games Start 2020 Season
Summary: Korean professional sport leagues started their 2020 season in May without spectators. The Korean pro baseball league started on May 5, pro soccer league on May 8, and the ladies pro golf tournaments on May 14). Retail stores have reported strong sales of food products associated with home watching of the games. For example, Home Plus (hypermarket chain) reported that its home delivery on-line sales of prepared deli food products such as take out sushi and fried chicken increased by 88 percent and 38 percent respectively during the first week after the pro baseball games started the season. Retailers have launched sales promotions targeting people who watch the games at home.
Mart Launches 'Extra Fresh Pork Meat' Program
Summary: Lotte Mart, a leading hypermarket chain in South Korea, announced that it will launch 'Extra Fresh Pork Meat' program this month. The program will offer '3 day pork meat', chilled meat from swine slaughtered three days ago. The '3 day pork meat' will be given only 5 days of shelf life and will be discarded afterward, which is a dramatic change from usual 45 days of shelf life given to regular pork meat. The '3 day pork meat' will be offered at 10-20 percent higher price than regular meat. Lotte Mart forecast that the '3 day pork meat' would take 1.5 percent of its pork meat section sales this year. Lotte Mart sells about 340,000 heads of pork meat a year. Lotte Mart reported that the 'Extra Fresh Pork Meat' program is part of its effort to differentiate its quality from on-line competitors and bring consumers back to its stores.
On-line Retailers with Food Focus Report Strong Sales during the First Quarter
Summary: SSG.COM, an on-line shopping business under EMART Co., reported that its sales during the first quarter totaled 917 billion won ($739 million USD), up 40 percent from the same period last year. Other on-line retailers that focus on food products, including Market Curley and Coupang, also reported strong sales growth during the quarter. On the other hand, on-line retailers with limited food portfolio, such as 11st.com, Teamon, and Interpark, saw stagnant sales growth.
Lotte Shopping Co. Reports 75 Percent Decline in Operating Profits in the First Quarter
Summary: Lotte Shopping Co., a leading retail company in South Korea, reported that its cash-register sales during the first quarter this year were 4.1 trillion won ($3.3 billion USD), down 8 percent from the same period last year. Operating profits declined by 75 percent to 52 billion won ($42 million USD). Lotte reported that weak performance of its department store division (sales declined by 22 percent) was the key cause for the decline.
Cheiljedang Co. Reports Record Sales and Operating Profits in the First
Summary: CJ Cheiljedang Co., the leading food processor in South Korea, reported that it generated a record 5.8 trillion won ($4.6 billion USD) in sales during the first quarter, up 17 percent. Operating profits reached a record 276 billion won ($221 million USD), up 54 percent. CJ Cheiljedang reported that sales in foreign markets grew 126 percent to $1.1 billion USD, helping boost quarterly performance. CJ Cheildang acquired Schwan's, a major frozen pizza processor in the United States, in 2018. Schwan's generated $594 million USD in sales for the first quarter.
Orion Co. Reports Record Sales and Operating Profits in
the First Quarter
Summary: Orion Co., a leading snack food processor in South Korea, reported that it had a record 540 billion won ($432 million USD) in sales during the first quarter, up 9 percent. Operating profits for the first quarter totaled 97 billion won ($21 million USD), up 26 percent. Orion reported that its saw strong sales growth in both domestic (up 7 percent) and foreign markets (up 5 percent in China and 24 percent in Vietnam).
Samyang Food Reports Record Sales and Operating Profits in
the First Quarter
Summary: Samyang Food, the leading instant noodle processor in South Korea, reported record sales of 156 billion won ($123 million USD) in the first quarter, up 29 percent. Operating profits were 27 billion won ($21 million USD), up 73 percent. Samyang Food reported that strong growth in sales in foreign markets (up 49 percent to $62 million USD) was the key reason for its strong quarterly performance.
Specialty Meat Stores Emerge … Vending Machine, Premium Aged Beef, Charcuterie
Summary: There are not many traditional, independent butcher shops left in metropolitan markets in Korea as most of them lost consumers to large grocery stores. Instead, specialty meat retailers targeting new consumer trends of quality and convenience are emerging. Notable examples include Meat Box 365 stores by Meat Box that offer portion packed meat in vending machine 24 hours a day (1 store in Sungnam-si currently with planned opening of 6 additional stores this year).
Agricultural Trade Office, U.S. Embassy - Seoul
Tel: 82-2-6951-6848 Fax: 82-2-720-7921