John Jenkins Korean Report

Sales of commodity products to Korea will continue to be strong in coming years. Poultry sales will likely continue to be solid, as will sales of pork and grain products. However, the current economic crisis, though not as severe as the 1997 crisis, has scared importers of value-added and processed food products. They are taking a “wait-and-see” approach to importing products. At the same time, according to the ATO office, many Korean importers are having a difficult time finding credit in such a tight credit market with which to purchase US products.

The Korean retail market seems to be less diverse than other countries. For example, in the US there are high-end, mid-range, and low-end stores across all categories of food products. However, in Korea there seem to be (as was confirmed by one importer) only two segments: high-end (i.e. department stores) and low-end (i.e. discount stores). The price different between the two, for the same product, is approximately 20%. NOTE: Sales of food and beverage products through direct marketing (TV and door-to door sales) is prominent in Korea, meaning that there is a third segment of the market, as
well.

Food Safety is just as big an issue in Korea as it is in Japan or other countries. Like other
countries, Korea has had problems with food imported from China. As a result, the Korean government is implementing new regulations for imported food products, and requiring Country of Origin Labeling (COOL) in specific sectors.

The food service sector, particularly US chain restaurants, in Korea has seen a significant loss of revenue in the past year. People are simply staying home rather than eating out now.