FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date: Friday,  August  28, 2020

For Coverage: August 24 ~  28, 2020

Retailers Report Strong Sales Growth in Diet Foods during the Second Wave of COVID-19 Outbreaks

https://www.hankyung.com/economy/article/2020082746741

Summary: Leading Korean retailers reported strong sales growth in diet foods during the week of August 18.  The number of COVID-19 infections in Korea rebounded sharply since August 15 and many consumers were forced to spend more time at home.  Consumer demand for products associated with weight-loss and fitness programs increased as a result.  Key products that saw strong sales growth include avocados, frozen fruit, and tomatoes ( up 82 percent, 44 percent, and 29 percent respectively at EMART); asparagus, broccoli, and cabbage (up 52 percent, 25 percent, and 19 percent respectively in Lotte Mart); smoked eggs, cooked chicken breast meat, and almond beverages (up 109 percent, 60 percent, and 70 percent respectively in CU convenience stores); boxed fresh salads (up 122 percent in GS25 convenience stores); and protein powder and other high-protean processed foods (330 percent in SSG.COM).

 

COVID-19 and Government Deregulation Bring New Opportunity in the Liquor Market

http://www.thinkfood.co.kr/news/articleView.html?idxno=88372

Summary: The Korean government introduced a volume-based liquor tax for beer this year.  The government further revised its liquor regulations to allow retailers to produce private label products in partnerships with breweries and wineries.  The government also now allows liquor retailers to offer alcoholic beverages via on-line shopping for store pick up.  These government reforms were timely as Korean consumers opted for home drinking during the COVID-19 outbreak.  Many Korean retailers launched private label beer and wine programs to capitalize on the opportunity.  For example, BGF Retail, the leading convenience store chain in the market, launched its private label beer, 'Gompyo', in a partnership with Seven Brau brewery.  Hypermarket grocery store chains started offering alcoholic beverages on their on-line shopping platforms.  Hypermarket chains, including Lotte Mart and Emart, also introduced low-price wine programs to attract entry level wine consumers.

 

Lotte Generates Early Success in 'Air Baked' Snacks Targeting 'Low Fat Diet'

https://www.donga.com/news/Economy/article/all/20200826/102667220/1

Summary: Lotte Confectionery, a leading snack processor in South Korea, reported that its 'Air Baked' snack line generated early success after lunching in July.  The sales of 'Air Baked' products amounted to $2 million USD during the launching month.  According to Lotte, the 'Air Baked' snack contains 60 percent less fat as it does not use frying oil.

 

Milk Producers Report Reduced Sales as Schools are Closed due to COVID-19

https://m.mk.co.kr/news/society/view/2020/08/879996/

Summary: Schools are closed due to a second wave of COVID-19, with online classes only until September 11.  Korean milk processors rely heavily on sales to school lunch programs which consume 2 million packs a day.  The closing of schools has reduced daily demand to 0.4 million packs.  As a result, milk producers are forced to turn unused milk into milk powder and UHT milk with longer shelf life.

 

On-line Orders for Restaurant Meal Home Delivery Up 74% through July due to COVID-19

https://www.donga.com/news/article/all/20200825/102642878/1

Summary: On-line shopping research firm WiseApp reported on August 25 its analysis of consumer credit card spending on on-line shopping this year through July.  On-line restaurant meal purchases for home delivery increased 74 percent during the period compared to the same period last year, the largest increase of any category.  This was followed by internet shopping for consumer products, which were up 23 percent.  On the other hand, spending on duty free shops (-74 percent), theaters (-73 percent), air tickets (-68 percent), and tourism (-62 percent) declined significantly as a result of COVID-19.

 

Korean Ice-cream Processors Seek Export Opportunity

http://www.thinkfood.co.kr/news/articleView.html?idxno=88377

Summary: Korean ice-cream processors are making extra efforts to develop export opportunities as the local market faces stagnant growth.  According to Korea Agro-Fisheries & Food Trade Corporation (aT), cash-register sales of ice cream in South Korea declined 15 percent over the last five years to 1.7 trillion won ($1.4 billion USD) in 2019.  Korean ice-cream processors' exports totaled $35 million USD during the first half of 2020, up 7 percent from the same period last year.  Leading processors have expanded marketing in key target markets, including the United States, China and Vietnam.  For example, a leading processor Binggrae established a processing facility in the United States in 2017 and increased its sales of Melona ice bar to 13 million units in 2019.

 

GS25 Convenience Stores Offer Late Night Home Deliveries

https://www.donga.com/news/Economy/article/all/20200824/102629153/1

Summary: GS25, the leading convenience store chain in South Korea with over 14,000 stores throughout the country, reported on August 24 that the number of its stores offering late-night (1 am till morning) on-line home-delivery service reached 2,000.  GS25 said that stores offering late-night home delivery services generated three times more sales than other stores over the last two months.  GS25 has partnered with on-line shopping delivery platform Yogiyo to offer the home delivery service.  Prepared meals and beverages were the leading products consumers ordered from GS25 for late-night home delivery.

 

Korean Consumer Index Up 4 Points in August, BOK

https://www.hankyung.com/economy/article/2020082403187

Summary: The Bank of Korea (BOK) reported on August 25 that the Korean Consumer Composite Sentiment Index (CSI) was 88.2 in August, up 4.0 points from the previous month.  BOK said the CSI continued to recover for four months in a row since May as consumers maintained an improved economic outlook.  OECD (Organization for Economic Cooperation and Development) recently revised its 2020 growth forecast for the Korean economy from -1.2 percent to -0.8 percent, which was the highest growth forecast among the 37 leading economies in the organization.

 

Second Wave of COVID-19 Infections Hit Offline Retail Industry Hard

https://m.mk.co.kr/news/business/view/2020/08/868573/

Summary: Offline retail stores are suffering from reduced sales due to the second wave of COVID-19 that started in the week of August 15. As an example, department stores suffered a 10 to 25 percent reduction in sales during August 23 and 24. Outdoor shopping complexes and suburban outlets have seen their sales fall 17 to 43 percent during the period. While hypermarkets experienced a 3-5 percent sales decline, their food related sales have increased by four to 15 percent. In contrast, online shopping malls such as Market Kurly’s have seen sales increase by 34 percent.

  

Prolonged COVID-19 Leads to Consumers Seeking Plain Breads

https://m.mk.co.kr/news/business/view/2020/08/867778/

Summary: With COVID-19, people are spending more time in their homes. This is causing them to purchase more plain breads compatible with diverse ingredients and used to make simple meals. According to Seven Eleven, plain bread in neighborhood districts have experienced a 182.5 to 281.5 percent increase in sales, whereas sales in business districts have only increased by 10 to 16 percent.

 

Bottled Water Market to Reach 1 Trillion Won in Sales This Year, Nielsen Korea

https://www.donga.com/news/article/all/20200823/102611533/1

Summary: Nielsen Korea reported that the bottled water market in South Korea will likely generate over 1 trillion won ($833 million USD) in cash-register sales in 2020, up 13 percent from 2019.  Nielsen Korea said that sales of bottled water more than doubled over the last 10 years due to increased consumer health concerns.  Nielsen Korea explained that the sales have seen even higher growth this year due to COVID-19 and recent incidents of tab water contaminated by insect larva.

 

Sales of Premium Korean Milk Ice Sorbets Soar Despite COVID-19 and Monsoons

https://m.mk.co.kr/news/business/view/2020/08/865542/

Summary: With the continuation of COVID-19 and record long monsoon season, there was a disparity in sales between middle priced and premium Korean Milk Ice Sorbets. July to August sales of franchise ice sorbets (priced below $8.5) have dropped by 10-30 percent below 2019 levels. In contrast, hotels’ sales of premium ice sorbets (priced above $40) have increased by 10-20 percent. Industry insiders believe the drop in franchise products’ sales is due to COVID-19 reducing the purchasing power of younger generations. They believe the increase in sales of premium products is due to people spending their vacations in a hotel and willing to pay more for products that brings guaranteed  satisfaction.