FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date: Friday, May 29, 2020

For Coverage: May 20 ~ 29, 2020

 Businesses Lost 590,000 Jobs in March-April during the COVID-19 Outbreak, Ministry of Labor and Employment

https://www.donga.com/news/article/all/20200529/101266158/1

Summary: According to monthly labor and employment statistics released by the Ministry of Labor and Employment, the number of people employed declined by 220,500 and 360,500 in March and April respectively due to the COVID-19 outbreak.  The hotel-restaurant industry saw the largest decline in employment (-166,000), followed by education (-93,000) and arts-sports-leisure (-45,000).

 

Public Parks, Libraries and Museums will Close for Two Weeks Again to Prevent Re-spreading of COVID-19 https://kr.investing.com/news/economy/article-410647

Summary: The Korean government decided on May 28 to close public facilities such as parks, libraries, and museums in the Seoul-Gyeonggi province metropolitan areas until June 14.  The measure is aimed at preventing further spread of COVID-19 after an outbreak at on-line shopping distribution centers earlier this week.  The government will disinfect some 1,400 on-line shopping distribution warehouses throughout the country.

 

Increased Home-Drinking during COVID-19 Generates 50 Percent Sales Growth for Wine in First Quarter

https://www.hankyung.com/economy/article/2020052874891

Summary: Retail stores reported strong growth in wine sales during the first quarter as consumers opted for wine amidst increased home drinking.  Wine sales increased 23 percent at EMART, 24 percent at Lotte Mart, 46 percent at CU convenience stores, 28 percent at GS25 convenience stores, and 26 percent at Seven Eleven convenience stores.

 

COVID-19 Infect ions Spread in On-line Shopping Distribution Centers … Consumers are Concerned about Potential Contaminations in Shipments

https://www.donga.com/news/article/all/20200528/101247112/1

Summary: Coupang, the leading on-line retailer in South Korea, reported that two of its distribution centers in Gyeonggi province are closed for two weeks under local government guidance to due to the spread of COVID-19 infections amongst workers at the faciliites.  The number of infections related to the facilities has increased to 70.  Local authorities are in the process of testing 4,000 people who worked or visited the facilities.  Consumers are concerned about potential contamination in on-line shopping shipments.  Health experts advise extra cautions such as wearing vinyl gloves when receiving the delivery packages.

 

Half of Korean Consumers Increased the number of Grocery Purchases Online

http://www.foodnews.co.kr/news/articleView.html?idxno=73916

Summary: Since the outbreak of COVID-19, more than 1 out of 2 consumers have increased the number of online grocery purchases. Consumers also increased consumption of health functional foods with vitamins, minerals, and ginseng.  The Korea Rural Economic Institute (KREI), funded by the Ministry of Agriculture, Food and Rural Affairs (MAFRA), conducted a survey of 1,000 consumers in their 20s and 50s to assess the impact of COVID-19 on food consumption.  90.8% of those surveyed said they have reduced how often they go out due to the spread of COVID-19.  76.4% said they reduced the number of visits to offline grocery stores.  The researchers extrapolated that, given the increase in overall grocery sales but decrease in the number of visits, the size of online grocery transactions has increased.  Post comment: this is supported by sales results reported by online retailers.  

 

Korean Economy to Decline -0.2% This Year, Bank of Korea

https://www.donga.com/news/Economy/article/all/20200528/101251090/1

Summary: Bank of Korea (BOK) released its updated annual economic growth forecast on May 28.  BOK revised its Korean GDP growth rate for 2020 to -0.2 percent.  BOK added that if the forecast is correct, the Korean economy will shrink for the first time in 22 years.  The Korean economy declined by -5.1 percent in 1998 under Asia Economic Crisis.

 

Korean Air Reports Strong Freight Business Outcomes in 2Q

https://www.donga.com/news/Economy/article/all/20200528/101249401/1

Summary: Korean Air reported that its sales revenue from its freight business was 1.5 trillion won ($1.2 billion USD) in the second quarter this year, up 132 percent from the same period last year.  Korean Air said that the strong results were due to increased air freight demand around the world for essential household products and sanitary products related to COVID-19.

 

Home Plus Stages 'World Beer Festival'

https://www.donga.com/news/Economy/article/all/20200527/101244901/5

Summary: Home Plus, a leading hypermarket grocery store chain in South Korea, reported that it launched 'World Beer Festival' on May 28.  The in-store promotion will last until July 1 and offer around 190 imported beers.  Some of the beers are offered for '6 cans for 9,000 won ($7.2 USD)' or '4 cans for 9,000 won' deals.

 

Retail Industry Sales Up 3.9% in April

https://www.hankyung.com/economy/article/202005285236Y

Summary: Korea Ministry of Trade, Industries, and Energy (MOTIE) released monthly retail industry statistics on May 28.  Overall retail industry sales in Korea increased 3.9 percent in April this year compared to the same month last year.  Sales by on-line retailer grew the most at 16.9 percent, while off-line retailers declined 5.5 percent.  Sales of electronics, home & garden, and food increased by 21.3 percent, 12.1 percent, and 10.2 percent respectively.  On the other hand, fashion declined by 19.2 percent.

 

Consumer Confidence Index Rebounds in May, Bank of Korea

https://www.donga.com/news/article/all/20200526/101228059/1

Summary: The Bank of Korea (BOK) reported that the consumer confidence index rose to 77.6 in May, up 6.8 points from the previous month.  The consumer index declined from January to April during the COVID-19 outbreak.  BOK explained that the decline in the number of COVID-19 infections along with the disbursement of government COVID-19 relief funds to families helped consumer confidence to recover.  

 

Protean Foods Targets Fitness Fever Among Young Consumers

https://www.hankyung.com/economy/article/2020052682811

Summary: Young millennial consumers in their 20's and 30's are paying extra attention and resources to getting in shape.  As a result, the food market has recently seen strong launchings of 'high protein' processed foods and beverages.  Examples include 'Yoplait Protein' by Binggre, 'Selex' high protein bars, powders, and beverages by Maeil, 'Haru Genruk' high protein dietary supplements by Ildong Hoodis, and 'Haru Yache Protein' high protein vegetable juices by Yakult Korea.  Leading food processors will likely launch additional products to reach a wider target audiences, including elderly consumers and people with health issues.

 

Lotte Mart Offers 'Within 2 Hour Delivery' from Smart Stores

https://www.donga.com/news/Economy/article/all/20200525/101209774/1

Summary: Lotte Mart began offering a 'within 2 hour delivery' service at its two 'Smart Stores' on April 28.  The service increased on-line orders at these two stores by 130 percent and 176 percent respectively.  Lotte Mart said the share of fresh food products increased from 35 percent to 45 percent after launching the quick delivery service.  A “Smart Store” is a hypermarket grocery store equipped with in-store picking and packing facility for quick delivery of on-line orders.  Lotte Mart plans to turn 10 more stores into Smart Stores by next year.

 

Hanwoo Beef Prices Hit All Time High … Reduced Supply from Local Farms Coupled with Unstable Imports from the U.S.

https://kr.investing.com/news/economy/article-406872

Summary: The wholesale Price of Hanwoo beef (local Korean breed) reached 20,906 won ($16.7 USD) per kilogram on May 22, a record high since the Korean government started officially monitoring prices in 1995.  The beef grading system the government introduced last year encourages local farms to breed the cattle longer to achieve top grade 1++, resulting fewer cattle slaughtered and higher prices.  At the same time, the potential for disruptions to beef imports during the COVID-19 outbreak, particularly from the United States, has also driven up the overall beef prices.

 

Korean Family Spending Shifts During the COVID-19 Outbreak, Korea National Statistics Office

https://www.donga.com/news/article/all/20200522/101166036/1

Summary: The Korea National Statistics Office (NSO) released on May 21 its Quarterly Household Trend Statistics for the first quarter of 2020.  The data confirms that Korean consumer spending and activities were affected significantly by the COVID-19 outbreak.  Monthly average household spending during the quarter amounted to 3,945,000 won ($3,156 USD), down 4.9 percent from the same quarter last year.  Lower income households had a larger decline in monthly spending.  Spending on clothing and fashion (-28.0 percent) had the largest decline, followed by education (-26.3 percent), entertainment & cultural activities (-25.6 percent), home & garden (-11.6 percent), and dining out & lodging (-11.2 percent).  On the other hand, spending on grocery food (10.5 percent) and health (9.9 percent) increased during the quarter.

 

 COVID-19 Brings Dramatic Changes in Consumer Spending, Hana Economic Institute Report

https://www.donga.com/news/article/all/20200521/101165385/1

Summary: Hana Economic Institute released a 'COVID-19 Consumer Market Impact Report' on May 21 based on consumer credit card spending data from Hana Credit Card during the first quarter this year.  The report confirms that consumers consumption spending changed significantly during the COVID-19 outbreak.  For example, consumer spending on internet shopping and butcher shops increased while spending on duty free shops and tourism declined in March compared to the same period last year.

 

 EMART Launches '1 Day Shelf Life Eggs'

https://www.donga.com/news/article/all/20200521/101165363/1

Summary: EMART, the leading hypermarket grocery retailer in South Korea, announced on May 21 that it launched 'Extreme Fresh Eggs'.  The eggs are given only one day of shelf life after production, which is a dramatic change from the regular 45 days of shelf life given to regular eggs in the store.  EMART offers 'Extreme Fresh Eggs' at 3,980 won per 15 egg pack, which is similar to regular eggs it offers.  EMART has been making efforts to offer fresher agricultural products recently, including 'strawberries picked this morning' and 'fish right out of boat'.

 

Consumer Exhibition in Busan Receives Good Traffic

https://www.donga.com/news/article/all/20200521/101165380/1

Summary: Home Living & Household Goods Show, a leading consumer exhibition in Busan BEXCO, started on May 21.  Despite COVID-19 concerns, the show received good local consumer traffic.

 

Convenience Stores Report Strong Growth in High-value Products after Deployment of Government COVID-19 Relief Funds

https://www.donga.com/news/Economy/article/all/20200520/101144813/5

Summary: The Korean government started providing COVID-19 relief funds to all families from May 11 (as high as $850 for a family of 4 people or larger).  Leading convenience store chains (mostly located in residential and office areas) reported strong growth in sales of high-value products during the first week after the funds were deployed.  Seven Eleven reported 48 percent growth in male cosmetics, 22 percent in premium ice cream, 17 percent in wine, and 13 percent in whiskey.  EMART 25 reported 72 percent growth in kids beverages, 54 percent in diapers, 25 percent in toys, and 20 percent in kids candies.

 

Ottoogi Launches 4 New Frozen Baked Products

https://www.donga.com/news/Economy/article/all/20200520/101147452/1

Summary: Ottoogi, a leading food processor in South Korea, reported that it launched four new frozen baked products recently.  The products are all microwavable, targeting people eating Home Meal Replacement (HRM) products at home.

 

Baemin Launches Food Ingredient Delivery Service Targeting Restaurant Clients

https://www.hankyung.com/economy/article/2020052097481

Summary: Baemin, the leading quick home delivery service for restaurant meals in South Korea, launched 'Baemin Sanghwae' on May 20.  Baemin Sanghwae offers '1 day delivery' for over 1,000 food ingredients and disposables needed by restaurants, including chilled meat, fresh vegetables, sauces, and napkins.  Baemin Sanghwae will likely bring significant competition in the foodservice distribution industry.  Baemin’s restaurant meal delivery business generated 6.8 trillion won ($5.9 billion USD) in transactions in 2019.  Baemin opened 15 distribution warehouses in the Seoul metropolitan area in 2019 in preparation for additional business.

 

CJ Cheiljedang Launches New Premium Prepared Rice Porridge

https://www.hankyung.com/economy/article/202005211073Y

Summary: CJ Cheiljedang, the leading food processor in South Korea, reported that it launched a new premium line of prepared rice porridge products on May 20.  CJ said the products were processed from top quality ingredients.