FAS/Seoul Monitoring of Media Reporting on Agricultural Issues 

Today's Date: Friday,   December 13,  2024

For Coverage:  December 7  ~ 13, 2024

Hypermarkets focusing on grocery segment
https://www.newsis.com/view/NISX20241212_0002994910
Summary:  To respond to the expansion of e-commerce, the hypermarket industry is focusing on the ‘grocery’ segment to strengthen its competitiveness.  E-mart will open ‘E-mart Food Market’ in Daegu on the 12^th, a specialized grocery store that aims to provide “year-round low prices for groceries”.  E-mart Food Market is a specialized grocery store that sells fresh food, processed food, and daily necessities at prices 25-50% lower than discount stores.  Lotte Mart, which opened its first ‘Grand Grocery’ store in Eunpyeong, Seoul last year, renovated its Lotte Super store in Dogok into a Grand Grocery last month, and sells about 5,000 food products.  Homeplus recently opened a ‘Mega Food Market Live’ store in Gangseo, which offers instant cooking catering to customers’ needs and tasting booth where they can watch the cooking process.  A hypermarket industry insider said, “grocery food products are the identity of hypermarkets, the core of their competitiveness, and the top reason why customers come to visit hypermarkets.”

Spike in coffee bean prices
https://www.newsis.com/view/NISX20241211_0002993301
Summary:  Coffee bean prices hit a 47-year high due to the climate crisis in major coffee bean producers such as Brazil and Vietnam.  According to the International Commodity Exchange in New York on December 12^th, the futures price of Arabica coffee beans increased to $3.44 (4,936 won) per 0.45 kilogram, as of December 10^th, which is the highest in 47 years since 1977.  An industry official said that domestic coffee prices next year will also increase due to the won-dollar exchange rate continuing to soar along with the steeply rising coffee bean prices.  In fact, Dongseo Food, one of the food manufacturing companies in Korea, has raised the prices of its main products, such as instant coffee, coffee mixes, and coffee drinks, by an average of 8.9% since the 15^th of last month due to the raw material price hike.  Starbucks Korea also raised the price of its Grande and Venti sized coffees in August.

House parties emerge as new trend for Christmas celebrations
https://www.koreatimes.co.kr/www/culture/2024/12/199_388149.html
Summary:  Amid rising inflation and the ongoing political issues in Korea this year, many people decided to take the gatherings indoors for more economical and comfortable celebrations instead of dining out at restaurants.  For these reasons, the food and retail industries are eager to cater to the changing trend.  Local bakeries and franchises, such as Paris Baguette, Tous les Jours, and Starbucks Korea, rolled out Christmas-themed cakes and desserts.  Retail chains, including GS25 and Shinsegae Food, also introduced mini cakes with more affordable prices.  Hotel chains like JW Marriott and Grand InterContinental Seoul are offering holiday special meal kits for takeout or delivery.  Convenience store chains, such as CU, GS25, and Emart24, are holding promotions, offering discounts on alcohol selections.  In addition, for those who are looking forward to hosting parties, cleaning service startups like Cleaning Lab and Miso offer assistance in dealing with preparing and cleaning up before and after the party.

South Korea’s fading nightlife signals shift in hard-drinking culture
https://www.reuters.com/world/asia-pacific/south-koreas-fading-nightlife-signals-shift-hard-drinking-culture-2024-12-11
Summary:  South Korea’s drinking culture, once characterized by people waiting in line at pubs and bars on the street to end their day, is disappearing rapidly.  That shift is driven by Korean companies cutting back on after-work drinking bouts, the emergence of a new generation of bold younger female workers who refuse to participate in these gatherings and the reluctance of consumers to open their wallets due to rising interest rates and lingering inflation.  Another factor is the rise of a younger health-conscious generation.  According to an Euromonitor’s survey, in neighboring Japan, increased health awareness and the flexible working style brought about by the pandemic have also led to a decline in their alcohol consumption.  It is the same situation in South Korea.  Alcohol consumption in Korea has dropped 12% from its 2015 peak, the second-fastest decline among OECD countries.  An index measuring sales at local eateries was at a record low of 88.4 last year, according to latest figures, while the number of Noraebangs, or singing rooms, decreased to 25,990 as of July this year from 28,758 in 2020, a trade association said.

Coffee franchises’ subscription service for customers’ loyalization
https://www.dailian.co.kr/news/view/1438905/?sc=Naver
Summary:  The franchise coffee industry is accelerating its adoption of subscription services.  In 2023, Koreans consumed 405 cups of coffee per person, more than double the global consumption of 152 cups.  According to Korea Agro-Fisheries & Food Trade Corporation, there were nearly 99,000 coffee franchises in Korea at the end of 2022 and even now, new coffee brands continue to grow.  As consumer preference for low-priced coffee franchises has increased significantly due to continued high prices, large coffee franchises are focusing on securing demand through subscription services.  Starbucks Korea launched its subscription service, ‘Buddy Pass’ in October.  It is available after 2 p.m. every day and offers various discount and free delivery coupons.  Since its launch, the total amount of customers’ average purchase has increased by more than 60% compared to before the subscription.  Coffee Bean has also been operating ‘Aurora Members’ since last year, and Gongcha Korea is currently preparing to officially launch its subscription service.  According to a coffee industry official, many consumers are looking for low-cost coffee franchises due to the recent economic downturn, and large coffee franchises are also launching subscription services in line with this consumer trend.

Korean consumers make purchases based on practicality and value
https://www.metroseoul.co.kr/article/20241209500328
Summary:  According to a survey done between June and July this year by Nilson IQ Korea (NIQ Korea), key factors Korean consumers consider when making purchase decisions include ‘Low price (45%)’ and ‘Convenience (49%)’.  Also, they tend to make planned purchase, as 54% of the respondents said they will reduce wastes by buying only necessary products, and 36% answered they make plans before shopping.  About the perceived economy situation, 29% answered they feel the economy became worse this year than the previous year, which is 10% lower than the result of a survey done in January.  Products with high price hikes saw sales declines (e.g. home care products, health & beauty products) while a category of products with relatively limited price increases (e.g. drink, shelf-stable foods, bakeries) saw sales growth.  Also, a higher number of respondents said they are willing to spend more for healthcare related consumption.

Food companies struggle to source ingredients as weak won pushes costs
https://koreajoongangdaily.joins.com/news/2024-12-09/business/industry/Food-companies-struggle-to-source-ingredients-as-weak-won-pushes-costs/2196293
Summary:  Global food prices have been on the rise in recent months and the weakened Korean won has caused additional costs for food and beverage (F&B) companies that heavily rely on overseas supply chains for ingredients such as flour and oil.  Korea is highly reliant on imports of flour, corn, and beans, of which only 0.7%, 0.8%, and 7.7% are domestically produced, respectively.  According to the Korea Rural Economic Institute, Korea’s grain self-sufficiency rate, which averaged 19.5% between 2021 and 2023, is significantly lower than the global average of 100.7%.  Moreover, the food commodity price index, tracked by the Food and Agriculture Organization of the United Nations, hit a 19-month high of 127.5 in November due to the price spike in vegetable fats such as palm oil and canola.  The local currency’s drop in value increases the cost of ingredients that are bought with dollars.  For this reason, many confectionary and fast-food companies raised their prices this year citing an increase in raw material costs.  At the same time, however, they are considering other cost-cutting measures rather than continuing consumer price hikes since inflation continue to dampen domestic consumption.