Food and Drink sector

An Expert's View about Food , Beverages and Tobacco in South Korea

Posted on: 29 Sep 2012

The size of the food and drinks market in South Korea was estimated to be ₤74 billion and is expected to increase year on year by approximately 9 percent.

Food and Drink sector in South Korea South Korea, is the 12th largest economy in the world and a G20 member state. The population of South Korea is 50 million and a predicted GDP growth of 3.8 percent in 2013, according to the Bank of Korea. The size of the food and drinks market in South Korea was estimated to be ₤74 billion and is expected to increase year on year by approximately 9 percent. Market overview The size of the food and drinks market in South Korea was estimated to be ₤74 billion and is expected to increase year on year by approximately 9 percent. South Korea is currently dependent on imports for 60-70 percent of its food. This figure has been increasing in recent years as local agriculture and food production fails to keep pace with the increasing demand. Consumers are demanding healthy and convenient products, a trend that is consistent with consumer practices in affluent countries around the world. Rapid economic growth and increasing income per capita has led to substantial changes in eating habits. Consumption of the main staple food, rice, has declined, while consumption of meat, fruit, vegetables and dairy products has increased. The younger generation’s exposure to western-style foods, brands and tastes, through overseas travel and study, is increasing their familiarity and acceptance of Western food products. The organic food market has been continuously growing over the last five years and is expected to maintain this upward trend by 25-30 per cent. The organic food market has exceeded 4 trillion Korean Won in 2011. Key opportunities The European Union and Korea signed the Free Trade Agreement (FTA) on 6 October resulting in the removal of 97 percent of all tariffs cutting €1.6bn of duties annually for EU exporters from July 2011. Some of the ways the FTA will influence the Food & Drink sector are: Item Change in Tariff Timing Now Later Cheddar Cheese 36% 0% 10 years 3 Scotch Whisky 20 % 0% years Beer 30% 0% 7 years Meat products 22.5% 0% 10 years (Source: European Commission) Alcoholic drinks South Korea already is a huge importer of UK whisky. Where previously old blended whisky has been most popular, premium products and single malts are now gaining popularity in South Korea. South Korean consumers also consume light beers and lagers. Recently, imported premium lager, has been experiencing strong sales growth. The demand for beer amongst younger people as well as female drinkers is very high. Coffee and Tea The market for coffee is growing as South Koreans embrace the Western coffee culture. Although the American style is leading the coffee market, trendy consumers are increasingly looking to embrace the European style as well. In addition, tea still remains popular for its health benefits. Ready Meals Increasing numbers of dual-income families and single-parent households dominate the growth in pre-packaged ready meals. Plus, exposure of South Korea's younger generation to western- style foods, brands, and tastes through overseas travel and study is increasing their desire for ready meals. The FTA will affect the high duties currently in place on these products. Cheese Local prices for dairy products are high by global standards, and local producers only create a small amount of processed cheese. South Korean food processors are seeking reliable sources of high-quality and cost-competitive dairy ingredients. There are strong opportunities for UK companies to supply dairy products and cheese – particularly cheddar, as Stilton is considered too strong for South Korean tastes. Meat and Fisheries ξ The farm products sector will benefit considerably from the FTA, especially those dealing in frozen pork, which is in high demand. Frozen pork belly accounts for up to 70 percent of pork imports and no quantity limitations are in place offering a good opportunity for UK suppliers. In addition, there are opportunities for the whelk meat and pollack Latest export opportunities in the Food and Drink sector Latest export opportunities in South Koreal Getting into the market To compete in South Korea, UK companies are recommended to have a capable, established and knowledgeable local distributor, licensee or franchise partner. A long-term perspective and a reliable partnership between supplier and their local partner is one of the key factors in achieving success. More about doing business in South Korea Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. Yoonah Lee, British Embassy Seoul. Tel: +82 (0)2 3210 5625 or email: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events in the Food and Drink sector Major Events Busan International Seafood & Fisheries EXPO 2012 Date: 15-17 November 2012 Website: Seoul Café Show 2012 Date: 22-25 November 2012 Website: Seoul Food 2013 Date: 14-17 May 2013 Website: Seoul Food Week 2013 Date: 5-8 November 2013 Website: Useful links More about OMIS and other UKTI services for exporters
Posted: 29 September 2012

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