Korea has a strong food processing industry that manufactures a wide variety of food and beverage products. It also relies heavily on imports to fulfill its food and agricultural needs. As a result, the Korean food processing industry offers an outstanding opportunity for imported agricultural products for processing use, including basic commodities such as wheat and soybean, intermediate ingredients such as vegetable oils and fruit juice concentrates, and food additives such as flavors and coloring agents. The food processing industry generated 77.4 trillion Korean Won ($65.6 billion) in sales in 2020, up two percent from 2019.

Domestic milk production is forecast to stay steady at just over 2 million tons in 2022. 2021 milk production is projected to drop to 2.03 million tons after reaching 2.88 million tons in 2020. Milk production in 2020 benefited from favorable weather and higher price expectations. At the same time, COVID-19 related school closures resulted in weaker fluid milk demand. The resulting imbalance fueled higher dried milk production and larger dried milk stocks.

South Korea managed the COVID-19 pandemic relatively well, and consumer spending on food remained strong during the pandemic due to increased home eating. Korea's overall agricultural imports are forecast to increase 17 percent in 2021 due to increased demand for imported products in both the retail and processing sectors. The United States is the leading supplier of imported agricultural products to Korea with a 25 percent market share. Ongoing socio-economic shifts coupled with elevated consumer attention to quality and value will generate new opportunities for U.S. food and agricultural products in Korea for years to come.

The long-term outlook for South Korea’s Hotel, Restaurant and Institutional (HRI) sector is positive, with strong growth up until the COVID-19 pandemic. As in other countries, the pandemic hit Korea’s HRI sector especially hard. Spending on dining out and lodging in Q1 2021 was 4.5 percent lower than the year before. Employment in the HRI sector has also dropped sharply.