South Korea Food Report Q4 2010

Date: September 22, 2010
Pages: 66
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download
ID: S22753A84CAEN

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Includes 3 FREE quarterly updates

BMI View: South Korea’s food, beverage and mass grocery retail sectors increasingly resemble those of developed Asian economies rather than emerging ones. The country’s leading producers continue to announce overseas investments as they seek to reduce their reliance on an increasingly mature domestic market. That said, the country continues to offer some opportunities for growth, particularly with regard to premiumisation and the growing demand for convenience.

Headline Industry Data
  • Mass Grocery Retail Sales to increase by 32.3% to KRW78.98trn in 2014. Convenience to be the outperformer amid rising consumer demand; format sales rising by 73.7% to 2014 • Soft Drink Sales (KRW) to increase by 35.8% to 2014; this increasingly mature sub-sector will continue to benefit from premiumisation and product innovation
  • Alcoholic Drink Sales (KRW) to increase by a very modest 15.1% to 2014 amid increased market maturity and increasingly intense price competition; wine – from a very low base – to be the outperformer with sales increasing by an explosive 146%
Key Industry Trends & Developments

Looking Outward - Lotte Confectionery announced in early July that it plans to acquire Polish confectionery firm E. Wedel. In 2009, Lotte Confectionery’s domestic business accounted for 94.5% of group revenues, down by a marginal 0.8 percentage points from 2008. The continued reduction of this ratio, preferably at a quicker pace, will be important for Lotte Confectionery if it is to maintain positive growth momentum; the acquisition of E. Wedel will provide it with the opportunity to achieve this. This is in line with a wider trend of leading Korean players looking internationally for stronger growth prospects.

Retail Competition Remains Fierce - UK giant Tesco has continued in its bid to consolidate its position as one of the country’s market leaders, bidding a reported KRW300bn for South Korean supermarket chain Kim’s Club Mart. This bid demonstrates the continued attractiveness of South Korea’s retail market and is indicative of the level of competition that persists in the increasingly crowded sector. Risks To Outlook

The Bank of Korea decided to hold interest rates at its September 2010 meeting. However, we do expect a further rate hike before year-end and this could impact consumer spending which has recovered markedly since the turn of the year. That said, interest rates would remain down relative to recent historical averages. A worse than anticipated slowdown in Chinese growth in late 2010 and 2011 could also result in downward revisions to our current forecasts given Korea’s important trade links with China.
BMI Industry View
SWOT Analysis
South Korea Food Industry SWOT
South Korea Drink Industry SWOT
South Korea Mass Grocery Retail Industry SWOT
Business Environment
BMI’s Core Global Industry Views
    Table: BMI Food & Drink Core Views
Asia Pacific Business Environment Ratings
    Table: Asia Pacific Food & Drink Risk/Reward Ratings - Q4 2010
South Korea Food & Drink Business Environment Rating
Macroeconomic Outlook
    Table: South Korea - Economic Activity
Industry Forecast Scenario
Consumer Outlook
Food Consumption
    Table: Food Consumption Indicators - Historical Data & Forecasts
Canned Food
    Table: Canned Food Value/Volume Sales - Historical Data & Forecasts
    Table: Confectionery Value/Volume Sales - Historical Data & Forecasts
    Table: South Korea Food & Drink Trade Indicators - Historical Data & Forecasts
Hot Drinks
    Table: Hot Drink Value Sales - Historical Data & Forecasts
Alcoholic Drinks
    Table: Alcoholic Drink Value/Volume Sales - Historical Data & Forecasts
Soft Drinks
    Table: South Korea Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
Mass Grocery Retail
    Table: South Korea MGR Indicators - Sales Value by Format - Historical Data & Forecasts
    Table: Grocery Retail Sales by Format - Historical Data & Forecasts
Industry Developments
Market Overview
Industry Developments
Market Overview
Alcoholic Drinks
Soft Drinks
Mass Grocery Retail
Industry Developments
Market Overview
    Table: Average Sales per Outlet by Format – 2008
Competitive Landscape
    Table: Key Players in South Korea's Food & Drink Sector
    Table: Key Players in South Korea's Mass Grocery Retail Sector
South Korea Food & Drink Report Q4 2010
© Business Monitor International Ltd Page
Company Analysis
Maeil Dairy Industry
Nong Shim Co Ltd
Hite Brewery
Oriental Brewery
Mass Grocery Retail
Lotte Shopping
Samsung Tesco HomePlus
BMI Food & Drink Methodology
Food & Drink Business Environment Ratings
    Table: Rewards
    Table: Risks
    Table: Weighting
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
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