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A Recap of Food Industry Production Value in South Korea, 2018

  •   16 Sep 2019
  • 151

Takehome:

  • In 2018, South Korea’s food production scale reached 78.9 trillion (78.9 x 1012) South Korean Won (SKW), 5.1% higher than 2017.
  • Dietary habits in South Korea have undergone rapid change. Among all the food categories, the production of ready-to-eat prepackaged food increased the most.
  • Dairy production experienced a significant decline.
  • Imported beer, red ginseng products, and probiotic products are in demand.

According to market data released by MFDS on August 26th, 2019, South Korea’s food production scale reached 78.9 trillion (78.9 x 1012) South Korean Won (SKW), which is 6.67 billion US dollars, in 2018, 5.1% higher than that achieved in 2017, with an average annual growth rate of 3.7% recorded over the last three years. The food sector accounted for 16.3% of domestic manufacturing production value and 4.4% of South Korea’s GDP.


*Food industry here includes the manufacturing and processing of food (including processed food products, food additives), livestock products (meat, prepackaged meat, processed dairy products, and processed egg products), health functional food and containers/packages.

Food Industry Production Data

  • Production Value of Four Major Categories

Among all the major food categories, food and food additive sector remained the top category, followed by livestock products and the manufacturing of containers or packaging. As revealed by an MFDS report, the increasing production of packaging and containers is mainly due to increasing packing demand for ready-to-eat food and packaged meat products. Health functional foods ranked number 4. The functional food sector is characterized by high demand and boasted a YOY growth rate of 16.7% in 2018.

        Production Value   (unit: billion SKW)
  Manufacturers
201620172018Annual average growth rate, from 2016-2018 (%)YOY growth rate compared to 2017(%)
Food (including food and food additive)41,85342,76845,2974.05.9
Health functional food1,4711,4821,7298.416.7  
Livestock products24,00824,73225,0932.21.5  
Container/packaging5,9816,0766,7896.511.7  
Total73,31375,05878,9073.75

Key Features of 2018 South Korea’s Food Industry Production Performance

[Food]

  • Meat product production in the ascendency

  • Ready-to-eat food continues to grow

According to the MFDS data (shown below), packaged pork, beef and prepared meat remained the top 3 food categories. In addition, ready-to-eat food and convenience food recorded sustained growth, with a YOY growth rate of 13.7% in 2018.

The increasing production value of convenience food, prepackaged meat and prepared meat (with YOY growth rate of 10.3% in 2018), as well as a decline in ham production (YOY growth rate: -10%), were mainly due to a falling birthrate and the concomitant increase in the prevalence of single-person households. Convenience is a major driver of demand amongst South Korean consumers.

Top 20 Well-performed Food Categories (unit: billion SKW)

Food Production Performance 2017Production ValueThe proportion of the whole food production value (%)Food Production Performance 2018Production ValueThe proportion of the whole food production value (%)
1Prepackaged pork5,8937.91Prepackaged pork6,1887.8
2Prepackaged beef4,5016.02Prepackaged beef4,9966.3
3Prepared meat3,0164.03Prepared meat3,3294.2
4Ready-to-eat/convenience food2,6433.54Ready-to-eat/convenience food3,0043.8
5Milk2,5893.45Seasoning2,5853.3
6Seasoning2,4963.36Milk2,4233.1
7Snack2,2353.07Bread2,3443.0
8Bread2,2173.08Other processed aquatic products2,2772.9
9Other processed aquatic products2,1732.99Snack2,1742.8
10instant fried noodle1,9642.610Prepackaged chicken2,1652.7
11Prepackaged chicken1,9282.611instant fried noodle1,9662.5
12Coffee1,8292.412Coffee1,9502.5
13Soju1,3321.813Soju1,5141.9
14Other processed products1,2841.714Other processed products1,3871.8
15Fermented dairy1,2211.615Plant oil1,2391.6
16Ham1,1381.516Carbonated soft drink1,2331.6
17Plant oil1,1061.517Other agricultural products1,1681.5
18Ice cream1,0811.418Kimchi1,1201.4
19Other agricultural products1,0661.419Other beverage1,0831.4
20Kimchi1,0321.420Chocolate1,0621.3

[Beverage]

  • Processed dairy maintains the downward growth trajectory

  • Korean liquor “Soju” and imported beer see production rise

  • The production of carbonated soft drinks was greatly influenced by hot weather

Dairy—The production value of dairy beverages declined. The production value of milk declined by 6.4% while the production value of fermented dairy and processed dairy decreased by over 20% in 2018. It's also worth noting that infant formula production value reduced by 6.9% in 2018, influenced by Korea’s declining birth rate.

Liquor—The production performance of liquor reached 3.4 trillion SKW in 2018, 2.1% higher than that in 2017. According to the MFDS data, beer and Soju are still the two main alcoholic beverages. The production value of domestic beer decreased by 13.8% compared to 2017, but this decline was eclipsed by the impressive growth seen in imported beer which increased by 45% and reached 430 billion SKW in 2018.


Coffee—In 2018, the production value of liquid coffee (canned coffee, etc.) increased by 29.6%; roast coffee increased by 5.2%, while the performance of instant coffee declined slightly.

Carbonated soft drinks—The carbonated soft drink industry was greatly influenced by the hot summer weather. Although the production value increased by 21.5% in 2018, this is better understood as a rebound from a major decline of 21.3% recorded in 2017. The number of hot days when the temperature hit over 33 ℃ was 22.4 days in 2016, 14.4 days in 2017 and 31.5 days in 2018. These fluctuations in annual weather correlate exceedingly well with the fluctuations recorded in carbonated drink production value.

[Health functional food]

  • Red ginseng retains top spot amongst health functional food products

  • Probiotic products are experiencing rapid growth

The production value of the health functional food sector grew 16.7% in 2018 and achieved a production value of 1728.8 billion SKW.
-Among all health functional foods, red ginseng accounts for 39.1% of sector value, 28.6% higher than last year.
-The production value of probiotic products increased by 27% in 2018.

Top 5 Health Functional Food Performance (Unit: billion SKW)

Food Production Performance 2017Production ValueThe proportion of the whole food production value (%)Food Production Performance 2018Production ValueThe proportion of the whole food production value (%)
1Red ginseng526.135.51Red ginseng676.539.1
2Approved by MFDS minister separately221.615.02Approved by MFDS minister separately245.314.2
3Vitamin and dietary minerals190.112.83Vitamin and dietary minerals213.612.4
4Probiotics149.510.14Probiotics189.811.0
5Milk thistle (Cardus marianus) extract73.95.05Oil containing EPA and DHA 53.63.1
Total (top 5)1161.178.4Total (top 5)1378.879.8  

As for imported health functional food, the import value reached 672.7 billion SKW in 2018, 17.1% higher than that in 2017. Vitamin and dietary minerals occupied 34%, EPA and DHA products occupied 15.3% and probiotics occupied 11.2%.

Top countries exporting health functional food to South Korea
1. USA 403.8 billion SKW (60%)
2. Canada 64.3 billion SKW (9.6%)
3. India 26.8 billion SKW (4.0%)

Reference Link

MFDS Report 

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ABOUT THE AUTHOR

Lennie Tao

ChemLinked editor, having expertise in food regulations.