|
|
 |
|
Viewing report
|
|
|
|
South Korea Food and Drink Report Q2 2011
Business Monitor International, April 2011, Pages: 80
Business Monitor International's South Korea Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Korea's food and drink industry.
We maintain a broadly sanguine outlook for the South Korean consumer both in the near term and over the horizon. Increasing wages and buoyant retail sales provide ample cause for some optimism in the country’s domestic demand picture in the near term. However, given the growing maturity of food and drink sub-sectors and an ageing population, opportunities for strong growth are quickly depleting and consumer goods players will need to make early forays abroad to secure future growth. Recognising this, domestic consumer goods players such as Lotte Shopping, Lotte Chilsung and Shinsegae are expanding into regional markets such as China in search of higher-growth opportunities.
Headline Industry Data
- 2011 Per Capita Food Consumption = +2.0%; forecast to 2015 = +11.5%
- 2011 Alcoholic Drink Sales = +2.2%; forecast to 2015 = +21.0%
- 2011 Soft Drink Sales = +5.4%; forecast to 2015 = +31.6%
- 2011 Mass Grocery Retail Sales = +7.2%; forecast to 2015 = +31.5%
Key Industry Trends & Developments
Retailers Looking Outward For Stronger Growth – Lotte Mart, the discount division of South Korean retailer Lotte Shopping, has launched its 80th store in China in Chaohu City in December 2010. The retailer opened its first store in China in 2007 and aims to expand its presence locally as well as into global markets. Having secured a strong foothold in Korea's retail sector, Shinsegae is also set to continue expanding into international markets to capitalise on the massive potential of global retail over the coming years. With that in mind, Shinsegae is looking to establish a greater geographic footprint internationally, with plans to open 100 stores in China by 2015.
South Korean Beer Still A Strong Attraction For Foreign Companies – Asahi President Naoki Izumiya recently quelled speculation that the company would bid for Foster’s beer arm Carlton United
Breweries (CUB), suggesting that CUB may not have been a sweet enough deal for Asahi due to the high acquisition cost and subdued outlook for the Australian beer market. Moreover, he indicated that Asahi is more interested in strengthening its partnership with South Korean conglomerate Lotte as it looks to delve deeper into the higher-growth markets of China and South Korea. Meanwhile, foreign drinks companies Suntory, Sapporo and Reed’s have respectively entered into distribution agreements with local players to capitalise on the sector’s reasonably strong growth potential.
Risks To Outlook Food inflationary pressures continue to mount and this has inevitably placed pressure on consumer spending power. More worryingly, however, is the impact of consumer price inflation on discretionary spending levels. Although South Korea’s move to hike its interest rates in March 2011 could help tame inflationary pressures, a tighter credit environment arguably weighs more on domestic demand given that discretionary goods and services account for the bulk of the average South Korean shopping basket. Should food prices accelerate strongly through the second half of 2011, Bank of Korea could be forced to engage in even more aggressive monetary tightening than we envisioned – BMI is pencilling in two more 25-basis point rate hikes for 2011 – and this scenario certainly would not bode well for domestic demand growth.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
