Market Information > Food News Clipping
Food News Clipping
February 7 - 11, 2022
FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date: Friday, February 11, 2022
For Coverage: February 7 ~ 11, 2022
Sales of Eco-friendly Wine Surges
Summary: Along with the substantial growth of the domestic wine market, the number of customers looking for eco-friendly wine recently exploded. According to Michelin¡¯s trend report, demand for low-carbon, chemical-free wine is increasing. Wine and More, operated by Shinsegae, reported that its sales of eco-friendly wines increased 96 percent in 2021. Eco-friendly wine is made considering environmental factors throughout the process, starting from grape cultivation to wine shipping. Vegan wine is a kind of eco-friendly wine. Vegan wine is manufactured free of any animal ingredients such as animal clarifiers. Only plant-based fertilizers are used when growing grapes. Increased awareness of environmental issues is one factor that accounts for the growth of the vegan wine market. The major vegan wines distributed domestically are Costa Alicante (Spanish) and Le Gray (French).
E-mart Sells Antibiotic-free Pork at 130 Branches
Summary: E-mart announced on January 10 that they will sell antibiotic-free pork at 130 branches. Antibiotic-free certified pork is livestock produced following the certification standards such as using feed without antibiotics and antibacterial components, and not using veterinary medicines. In 2020, there were only 13 E-mart stores that obtained the antibiotic-free livestock certification. E-mart is upping efforts to obtain the certification for a large number of stores following the recent values based consumption trend.
¡®Healthy Pleasure¡¯ Trend Continues ¡¦ Demand for Low Food Increases
Summary: The ¡®Healthy Pleasure¡¯ lifestyle, initially led by consumers pursuing sustainable health care, is becoming more popular. Demand for ¡°low-food¡± (food low in sugar and fat) is increasing accordingly. According to Dongah Otsuka, sales of their product Narangd Cider have more than doubled every year since 2019. Narangd Cider has low calories, and it is free from colorings and sugar. The number of customers purchasing protein chips rather than potato chips is also increasing. According to health and beauty shop Olive Young, sales of protein chips increased 20 percent last year compared to 2020. The calories of protein chips are half that of other snacks such as potato chips. Protein chips are high in fiber and protein compared to potato chips.
Premium Pet Food, Pet Nutritional Supplements are on a Rise
Summary: GS Retail reported on January 9th that the number of customers purchasing their private brand ¡®About Pet¡¯ has increased six-fold compared to its launch 6 months ago. The bestselling items were premium pet food products such as human-grade pet food and NON-GMO products. Other than food, eco-friendly products without synthetic flavors or chemical components recorded the highest sales. Sales of nutritional supplements for pets have also increased substantially.
GS25 Launches a ¡®World Gourmet Travel¡¯ Meal Kit with Blue Marble
Summary: GS25, a convenience store operated by GS Retail, announced on January 8 that they are launching a meal kit with the theme of world gourmet travel in collaboration with a board game company Blue Marble. The two companies are teaming up to satisfy customers who had enjoyed the beloved game ¡®Blue Marble¡¯ in the past, and provide special experiences for customers who can¡¯t travel overseas due to Covid. GS25 will present three new items every month so that customers can enjoy various foods from world famous cities in the game, such as Roman basil pasta, Spanish seafood tomato stew, and Sichuan pepper noodles. Also, the two companies are planning a pop stamp event, which provides travel vouchers and many other prizes to customers purchasing the product.
Sales of Convenience Store Chicken Surged in 2021
Summary: Recently, local convenience stores are being recognized as a chicken restaurants. Major convenience stores are presenting high quality fried chicken at half the price of chicken franchises. Convenience store chicken was once considered a snack for younger customers. However, according to the industry, demand for convenience store chicken has increased rapidly among families. CU reported that last year¡¯s fried chicken sales jumped 31.1 percent from the year before. The sales increase was not limited to stores located where one-person households are concentrated; sales at stores located in areas where many families reside also increased. A GS25 official explained that convenience store chicken sales surged due to the recent trend of considering fried chicken as a meal replacements. Also, a 7 Eleven official noted that more people are purchasing a wide range of products at a nearby convenience stores rather than visiting hypermarkets or shopping online.
Consumer Prices Grew Over 3% for 4 Consecutive Months
Summary: The country¡¯s consumer price inflation is expected to increase after the New Year holidays along with extended social-distancing restrictions on food service companies. Korea Statistics reported on January 4 that consumer prices increased 3.6 percent in January. The consumer price inflation rate has exceeded 3 percent for four consecutive months starting from October 2021. Lee Joo Yeol, president of the Bank of Korea, said this trend will continue during the first half of 2022. Despite the government-level efforts to avoid inflation, there is growing concern over the expected rise in prices of agricultural, livestock, and fisheries products as well as processed food products. Moreover, price pressure on consumers is intensifying since more food service companies are considering a price increase due to the rising cost of ingredients. The government noted that consumers will return to home cooked meals rather than dining out since HMR (Home Meal Replacement) products and meal-kits are widely available on the market.
GS Retail Acquires Ag-Tech Corporation ¡®Firsf¡¯¡¦ Strengthens Its Direct Delivery Services
Summary: GS retail has acquired a 90 percent stake in Firsf, an agricultural corporation. Firsf has made 26.6 billion won in sales by manufacturing fresh products. However, Firsf initiated a corporate rehabilitation process in October 2020 in response to production disruptions after the outbreak of Covid. Through the acquisition, GS Retail plans to deliver food products directly from local producers, strengthening its fresh food delivery competitiveness. Since online fresh food transactions are on a rise, it is necessary for retail companies to provide differentiated services such as farm-fresh deliveries. According to Korea Statistics, online transactions of agricultural, livestock and fisheries products totaled 7.94 trillion in 2021, up 28 percent from the year before. Moreover, farm-fresh delivery is also advantageous in securing profitability since margins are higher with fewer layers of distribution.
Sales by Small and Medium-sized Businesses Increased by 60% in Market Kurly Last Year
Summary: Market Kurly, a leading retailer, reported on January 7 that sales by small and medium-sized partner companies in 2021 increased by 60 percent compared to the year before. This shows that Kurly¡¯s sustainable distribution plan, seeking co-existence with partner companies, is succeeding. The top 3 partners with the highest sales were small and medium-sized businesses. These businesses recorded monthly sales of 1 billion won, although their main products (fruit, vegetables, meat, eggs, and flowers) had relatively low retail prices. Small and medium sized companies accounted for 99.8 percent of Market Kurly¡¯s new partners last year, surpassing 100 billion won in sales.
Korea Agro-Fisheries and Food Trade Corporation (aT) Provides Information on Foreign Buyers
Summary: Korea Agro-Fisheries and Food Trade Corporation (aT) and the Ministry of Agriculture, Food and Rural Affairs (MAFRA) are providing information on foreign buyers through the aT BMS (Buyer Matching Service) for Korean food exporters in need of support. Ki Noh Seon, the food export director of aT, said the overseas activities of exporters are still restricted, and that it¡¯s very hard for exporters to collect buyer information under the current situation. The Buyer Matching Service provides buyer information by item and country after receiving requests from exporters. It provides information on selected buyers based on data from the global ratings agency DB and customs clearance services in 18 countries. Korea Agro-Fisheries and Food Trade Corporation (aT) also secures new potential buyers through virtual meetings.
The Korea Consumer Agency Promotes Correct Use of Green Product Certification Marks
Summary: Many companies are using the green product certification mark since more people are making value based consumption decisions. However, the Korea Consumer Agency (KCA) found out that it is difficult to verify the validity of some certification marks. After investigating 180 items (from five e-commerce platforms) that were advertised as eco-friendly, it turned out that 91 items (50.6 %) were using green product certification marks. The most used one was the legal certification mark, followed by the overseas mark and an industry mark. The items with the legal certification mark (60 items) didn¡¯t display their verification code properly, making it hard for consumers to check the validity before purchasing. Among the five items using the industry mark, one item was using an expired code. The Korea Consumer Agency recommended that business owners fully display the certification mark verification code. Also, consumers can check the validity of certification marks by using the green product information system run by the Korea Environmental Industry & Technology Institute (KEITI).
E-commerce Companies¡¯ Growth Slows Down
Summary: The domestic e-commerce market has continued to grow at an average annual rate of 20 percent (or more) in recent years. However, the growth rate of the e-commerce market is expected to slow down for the next few years since off-line platforms are strengthening their product competitiveness. Offline distribution channels such as department stores, convenience stores and warehouse stores are showing stable growth during the pandemic. Accordingly, although e-commerce platforms still have long-term growth potential, this year¡¯s growth rate is projected to drop to 10 percent. An industry insider noted that e-commerce platforms are competing to attract investment and competent employees. This will result in greater costs and contribute to slowing growth.
Pandemic Gives Rise to Large Scale Marketing Events
Summary: Distribution companies are preparing large scale marketing events with the Beijing Winter Olympics just around the corner. Since the Omicron variant is spreading rapidly, watching the Olympics while socially distancing at home is expected to become a new trend. The race to develop marketing events is expected to heat up since Valentine¡¯s Day on the 14th overlaps with the Olympics. E-mart is actively targeting people planning to watch the Olympics at home by providing discounts on premium televisions and food products starting February 3 to 16. Convenience stores are collaborating with lifestyle brands as part of the Valentine¡¯s Day marketing. 7 Eleven prepared ¡®Henri Matisse Heart Wine¡¯ as their main Valentine¡¯s Day product, along with other products in collaboration with various animation characters.
Convenience Stores Exceed Hypermarkets in Sales
Summary: Convenience store sales exceeded that of hypermarkets in 2021 for the first time. According to the Ministry of Trade, Industry and Energy¡¯s ¡®Annual Sales Trend of Major Retail Companies for 2021¡¯, sales of the three major convenience stores (GS25, CU, 7Eleven) accounted for 15.9 percent of retail food sales last year, surpassing the combined sales (15.7 percent) of the three major hypermarkets (E-mart, Lotte Mart, Home Plus) for the first time. An industry insider explained that demand for convenience has driven rapid growth in convenience store sales. He also noted that there were fewer hypermarkets in 2021 compared to the year before, which might have affected the sales of hypermarkets.
CJ Cheil Jedang Announces Four Major Food Culture Trends for 2022
Summary: According to CJ Cheil Jedang¡¯s ¡®2022 Food Culture Trend Outlook¡¯, the four major food culture trends for this year will be ¡®Less Effort¡¯, ¡®Individual¡¯, ¡®Food Tech¡¯, and ¡®ESG¡¯. These trends will accelerate as COVID becomes part of our daily lives. According to CJ, 71.9 percent of respondents said they started to consider HMR (Home Meal Replacement) products after the outbreak of COVID. More MZ generation consumers are willing to pay for health care products for themselves. Food companies have responded by launching customized health care brands. ESG efforts including tech-based meat substitutes are expected to gain traction as part of the values based consumption trend.
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