South Korea Food and Drink Report Q4 2012
Business Monitor International, October 2012, Pages: 107
The 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.
South Korea's household debt is a perpetual concern for the economy. On the back of a sliding economy and a sputtering property market, private consumption is likely to be stymied as the debt servicing burden compels consumers to scale back their expenditure. Moreover, an expected rise in unemployment is expected to place further pressure on expenditure patterns. Businesses have thus far been able to stave off laying off workers by resorting to measures such as cutting salaries and asking workers to take unpaid leave in order to lower the cost burden. We expect consumption to grow 1.5% and 3.6% in 2012 and 2013 respectively. We highlight that the risks to consumption growth are weighted to the downside in view of the enormity of the economy's household debt.
Headline Industry Data (local currency):
- 2012 per capita food consumption = +3.7%; forecast to 2016 = +23.2%
- 2012 alcoholic drink value sales = +5.0%; forecast to 2016 = +27.0%
- 2012 soft drink value sales = +3.4%; forecast to 2016 = +28.3%
- 2012 mass grocery retail sales = +3.7%; forecast to 2016 = +44.9%
Key Industry Trends And Developments:
Alcohol Imports Soaring: Recently signed free trade agreements with Europe and the US have led to a surge in alcohol imports to South Korea, according to the latest data from the Korea Wines & Spirits Importers Association, as reported by the Korea Herald. Between January and July 2012, imports of US wine from Spain and Germany increased by 19.7% and 19.9% respectively, while imports of US wine increased by 19.4%. Chilean wine proved to be a loser, with imports down by 3.5%, while imports of French wine fell in volume terms but increased in value terms.
No Pickup In Food CPI Despite Grains Rally: After a year of food price disinflation in Asia, the significant rally in grain prices over the last quarter has stoked fears of a return of food consumer price
(CPI) pressure. Despite the recent grain prices hike, we do not see food CPI picking up again in Asia at least until 2013.
Risks To Outlook:
If there is a sharper than expected downturn in the global economy or even an implosion in South Korea’s household debt market, we would expect a substantial weakening in its exports sector, which in turn may push the economy into a pronounced recession.
BMI Industry View 7
SWOT Analysis 8
South Korea Food Industry SWOT 8
South Korea Drink Industry SWOT 9
South Korea Mass Grocery Retail Industry SWOT 9
Business Environment 11
BMI’s Core Global Industry Views 11
Table: Core Views 19
Asia Pacific Food & Drink Risk/Reward Ratings 20
Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q412 (score out of 10) 20
Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q412 24
South Korea’s Food & Drink Risk/Rewards Rating 24
Macroeconomic Outlook 26
Table: Economic Activity 29
Industry Forecast Scenario 30
Consumer Outlook 30
Food 32
Food Consumption 32
Table: Food Consumption Indicators – Historical Data & Forecasts, 2009-2016 32
Canned Food 33
Table: Canned Food Value/Volume Sales – Historical Data & Forecasts, 2009-2016 33
Confectionery 34
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, 2009-2016 34
Table: Sugar Confectionery 35
Processed Meat 36
Table: Processed Meat 36
Preserved Fish 37
Table: Preserved Fish 37
Oils & Fats 37
Table: Oils & Fats 37
Dairy 41
Table: Dairy 41
Trade 43
Table: Trade Indicators – Historical Data & Forecasts 44
Drink 44
Hot Drinks 44
Table: Hot Drinks Value Sales – Historical Data & Forecasts 45
Alcoholic Drinks 45
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts 46
Table: Beer 46
Soft Drinks 47
Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts, 2009-2016 48
Table: Carbonates 48
Table: Bottled Water 49
South Korea Food & Drink Report Q4 2012
© Business Monitor International Ltd
Page 4
Mass Grocery Retail 50
Table: Mass Grocery Retail Sales Value by Format – Historical Data & Forecasts, 2009-2016 51
Table: Retail Sales By Format 52
Food 53
Key Industry Trends And Developments 53
FTA Could Lead to Problems For Agricultural Sector 54
Noodle Manufacturers Fined For Price Fixing 55
Opening Up The Agriculture Market 55
Inflow And Outflow Of Investments 56
Market Overview 57
Agriculture 57
Organics 58
Food Processing 58
Drink 60
Key Industry Trends And Developments 60
Growing Diversity In South Korean Beer Market 61
FTA To Imbue Alcoholic Drinks Sector With Greater Dynamism 62
Product And Geographical Expansion To Gain Prominence 63
Market Overview 65
Alcoholic Drinks 65
Soft Drinks 65
Mass Grocery Retail 66
Key Industry Trends And Developments 66
FamilyMart Indicates Further Expansion In South Korea 68
Frustration Over Increasingly Regulated Retail Landscape 69
Tesco Has Ample Motivation To Acquire Hi-Mart 71
Local Retailers Set Sights On High-Growth Regional Assets 72
Retailers Face Hurdles In Pursuing Domestic Growth 73
Market Overview 74
Table: Estimated Number Of MGR Outlets 76
Table: MGR Sales Value (US$bn) 77
Table: MGR Sales Value (KRWbn) 77
Table: Average Sales Per Outlet By Format, 2010 77
Competitive Landscape 78
Key Players 78
Table: Key Players In South Korea’s Food Sector 78
Table: Key Players In South Korea’s Drink Sector 79
Table: Key Players In South Korea’s MGR Sector 80
Company Monitor 81
Food 81
Maeil Dairy Industry 81
Nong Shim Co Ltd 83
Drink 85
Hite Brewery 85
Oriental Brewery 87
Mass Grocery Retail 89
Lotte Shopping 89
South Korea Food & Drink Report Q4 2012
© Business Monitor International Ltd
Page 5
Samsung Tesco HomePlus 91
Table: South Korea's Population By Age Group, 1990-2020 ('000) 94
Table: South Korea's Population By Age Group, 1990-2020 (% of total) 95
Table: South Korea's Key Population Ratios, 1990-2020 96
Table: South Korea's Rural And Urban Population, 1990-2020 96
Risk/Reward Ratings Methodology 97
Table: Rewards 97
Table: Risks 98
Weighting 98
Table: Weighting 98
BMI Methodology 99
Demographic Outlook 99
Table: South Korea's Population By Age Group, 1990-2020 ('000) 00
Table: South Korea's Population By Age Group, 1990-2020 (% of total) 01
Table: South Korea's Key Population Ratios, 1990-2020 02
Table: South Korea's Rural And Urban Population, 1990-2020 02
BMI Food & Drink Industry Glossary 103
Food & Drink 03
Mass Grocery Retail 03
BMI Food & Drink Forecasting & Sourcing 105
How We Generate Our Industry Forecasts 05
Sourcing 06
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