Market Information > Food News Clipping
Food News Clipping
May 9 - 20, 2022
FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date: Friday, May 20, 2022
For Coverage: May 9 ~ 20, 2022
E-mart Expands the Fruit Sugar Content Labeling System to 12 Items
Summary: E-mart will reportedly expand the fruit sugar content labeling system, which was only applied to watermelons, pears and apples, to 12 items, including three types of melons. E-mart plans to further enhance the customer trust on fruit taste by labeling sugar content. According to a survey conducted by the Korea Rural Economic Research Institute (KREI) last year, 40.8% of total respondents answered that they prioritize sugar content (Brix) when purchasing fruits. (Quality and price were prioritized by 22.8% and 18.6% of respondents respectively.)
Hite Jinro Sales Increased 95% After the Social Distancing Restrictions Were Lifted
Summary: As the social distancing restrictions were lifted, sales of ‘Tera’, a best-selling beer product of Hite Jinro, are recovering to levels seen before the Covid-19 pandemic. Shipments of Tera during April 18 - May 13 this year increased 9% compared to the same period in 2020. This is a 95% increase compared to a month before (March 18 - April 13, 2022).
Most Food Manufacturers, Except for Instant Noodle Producers, Saw a Decrease in Their Operating Profit
Summary: According to the Financial Supervisory Service, operating profits at major food companies such as Dongwon F&B (-28%), Lotte Food (-71%), CJ Cheil Jedang (-4%) and Pulmuone (-16.44%) decreased in the first quarter of this year compared to the year before. An industry official explained that raw material prices have soared since the beginning of this year due to the war between Russia and Ukraine and a rise in the exchange rate, lowering profitability. On the other hand, major instant noodle producers have seen an increase in their operating profit. Nongshim’s operating profit in the first quarter of this year increased 21.2% to 34.3 billion won compared to the year before. Increased telecommuting due to a surge in the Omicron variant has led to an increase in sales of instant noodles and snacks. Operating profits at Ottogi (+18%) and Samyang food (+71.3%) also increased from the previous year. Samyang Food achieved record-high quarterly earnings in the first quarter this year. However the situation is likely to change in the second quarter of this year. A sharp rise in international grain prices after Russia’s invasion of Ukraine and India’s ban on wheat exports could further exacerbate costs for the domestic food industry.
The Ministry of Agriculture, Food and Rural Affairs Said “Consumers won’t have problems buying cooking oil”
Summary: Concerns have been raised amid the prolonged war between Russia and Ukraine and Indonesia’s palm oil export ban. During a meeting held by the Ministry of Agriculture, Food and Rural Affairs, five cooking oil suppliers (CJ Cheil Jedang, Lotte Food, Nongshim, Ottogi, Sajo Daerim) said that they are not experiencing any shortages as of now and have no plan to raise cooking oil prices. Domestic cooking oil suppliers have secured a two to four month stockpile of cooking oil including shipments in transit. Soybean oil, the most widely used cooking oil, is shipped from major exporters including the United States and Argentina. Also, as Korean food companies are using Malaysian palm oil, the domestic food industry will not be directly affected. Chances are low that consumers here will have problems purchasing cooking oil.
In-soo Cho, Former CEO of Outback, Serves as CEO of Subway Korea
Summary: In-soo Cho, the former president of Outback Steakhouse Korea, was appointed as the new CEO of Subway Korea. CEO Cho served as the CEO of Pizza Hit Korea, the chairman of KFC Japan, and the senior vice president of Yam Brand U.S. headquarters until 2008. In-soo Cho said he will continue efforts to closely collaborate with business developers and franchisees to maximize profitability and enhance store operation efficiency.
Indonesia’s Palm Oil Export Ban Sparks Concern Over Domestic Oil Prices
Summary: Indonesia announced a ban on the export of palm oil (the most widely used vegetable oil), a move that could make the global food crisis even worse. Concerns about consumer price increases are also rising. The retail price of cooking oil has been rising since earlier this year. According to Supermarket A, the prices of vegetable oils such as olive oil (up 13.7%), sunflower oil (up 16.4%), canola oil (up 15.9%), and grapeseed oil (up 23.9%) rose from January this year. Rising vegetable oil prices were exacerbated by the war between Russia and Ukraine, two major vegetable oil exporters (the two countries together account for 80% of the global sunflower oil market). Small business owners are trying to buy in bulk since oil prices may rise due to Indonesia’s ban on oil exports. Starting this month, warehouse-type discount stores such as E-mart and Costco are limiting the quantity of cooking oil that can be purchased.
Convenience Store Lunch Boxes are On the Rise
With the hike in consumer prices, more people are turning to convenience store
lunch boxes that are relatively inexpensive. Convenience store CU
announced on the 17th that sales of lunch boxes for the first two
weeks of this month increased 48.4 percent compared to the same period last
year. Meanwhile, CU stores in Yeoksam, Gwanghwamun, and Yeouido Seoul,
recorded a 61.3 percent increase in sales.
The Market for Non-Alcoholic Beer is On the Rise
Summary: On the back of the Covid outbreak, the market for non-alcoholic beer is growing rapidly. BGF Retail, the operator of the convenience store CU, reported that non-alcoholic beer sales during April 1 - May 12 this year doubled from the same period last year. A CU official explains that since the demand for alcoholic beverages is diversifying, non-alcoholic beverages are also on rise. Convenience store E-mart 24 also saw 243 percent sales growth during the same period. An E-mart 24 official noted that they are launching more types of non-alcoholic beer products and strengthening their marketing activities to meet the increasing consumer demand. Hite Jinro’s ‘Hite Zero 0.00’ sales increased by 78 percent last year compared to a year earlier. According to Euromonitor, the domestic non-alcoholic beer market increased 247 percent to 20 billion KRW in 2021 from 8.1 billion in 2014. Health concerns soared during the pandemic and people who want to enjoy the taste of beer without getting drunk, or who are looking for low-calorie products are increasingly looking for non-alcoholic beer.
Ottogi Launches Premium Frozen Pizzas
Summary: Ottogi has set out to solidify its No. 1 position in the frozen pizza maket. Ottogi introduced two new types of wood-fired style premium frozen pizzas. Ottogi first introduced frozen pizza in 2016 and has led the domestic frozen pizza market for the last five years. Ottogi is competing with CJ Cheil Jedang and Pulmuone to secure market share. Ottogi’s frozen pizza market share fell from 64.4% in 2018 to 40.1% last year.
Convenience Store Seven Eleven is Upping Menu Prices
Summary: Korean convenience store franchise Seven Eleven will reportedly raise its coffee menu prices by 100 ~ 300 won considering the sharp increase in coffee bean prices. Only iced coffee, which is high in demand during the summer season, was included. Hot coffee menus were excluded from the price rise to lower the price pressure on customers.
Coupang Achieved Record Quarterly Sales This Year
Summary: Coupang, a Korean retail giant, reported that it has recorded sales of 6.52 trillion won (5.1 billion dollars) in the first quarter this year. The net loss for the first quarter this year was 266.7 billion won (29.29 million dollars), down 29.1 percent from the same period last year, as the profitability of major businesses such as fresh grocery delivery improved significantly.
CJ Cheil Jedang and Jeju Beer Collaborate to Target Single-Person Households
Summary: CJ Cheil Jedang, a leading Korean food manufacturer, signed a business deal with Jeju beer to target single-person households. Single person households have emerged as a major consumer group recently. Their first project of combining Korean food and beer is scheduled to be released in the second half of this year. As of 2022, the proportion of single-person households has risen to an all-time high, exceeding 30 percent.
SPC Samlip Achieved Record Sales in Q1 This Year
Summary: South Korean confectionary company SPC Samlip achieved record sales of 724.8 billion won in the first quarter of this year on the back of the ‘Pokemon Bread’ craze. It was the first time that SPC sales surpassed 700 billion won in the first quarter. Pokemon bread is a supermarket pastry that comes with stickers of the characters from the global hit anime series Pokemon. SPC sold more than 15 million (in volume) Pokemon breads after its release this February. An SPC official said they will launch various products targeting people in their twenties to forties and strengthen its marketing activities for home convenience food products.
CJ Cheil Jedang Sales Increased 13.1% in Q1 This Year
Summary: CJ Cheil Jedang’s sales in the first quarter of this year are estimated to have reached 6.98 trillion won, up 13% from the same period last year. Meanwhile, operating profits totaled 435.7 billion won, up 13.1%. This year’s first quarter sales surpassed the record high of 4.22 trillion won in the third quarter of last year. Food sector sales increased 13% to 2.61 trillion won thanks to its strong dominance in the domestic food market. Sales in the bio sector also increased 39.3% to 1.83 trillion won. Operating profits jumped 128% to 175.8 billion won. This was due to an increase in demand for amino acids for feed and soybean products since international grain prices rose during the Ukraine crisis.
Single-person Households Spent More on Alcohol Last year
Summary: According to a report published by Korea Rural Economic Institute on May 8, single-person households spent a greater share of food spending on alcohol than households with two or more people in 2021. Single-person households spent 10.6% of total processed food expenditures on alcoholic beverages, whereas households with two or more spent 7.3%. In terms of expenditures, beer and soju ranked 4th and 14th for single-person households respectively, and 7th and 16th for households with two or more people.
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