Industry Trend Analysis - South Korea Dietary Shift: Healthification, Premiumisation And Convenience Trends Dominating - APR 2018

BMI View: South Korean consumer dietary shifts indicate trends of healthification, premiumisation and convenience, three trends that we associate with an aging population. Consumers' spend levels on meat and poultry is set to shift as the percentage from household budgets moves more toward a preference for spending on fruit and vegetables. Pork is set to remain the consumer's favourite meat, but poultry will witness the strongest growth, which we attribute to the demand for fried chicken, convenience foods and the falling price of poultry.

We forecast household spending in South Korea to strengthen in the medium-term (2018-2022), growing by an average of 3.6% annually over this period, up from 2.0% between 2013 and 2017. This will result in household spending rising to USD144.7bn (KRW144.7trn) in 2022 up from USD105.3bn (KRW112.6trn) in 2017. Essentials will continue to dominate overall household spending over our forecast period and we estimate food and non-alcoholic spending to be one of the leading categories in essential spending (after housing and utilities), forecast to account for 13.7% of consumers' household budgets in 2018 and rise up to 14.1% by 2022. The increased spending on food and non-alcoholic drinks in South Korea's mature and saturated food sector is indicative of a wealthier consumer base who are prepared to spend on more premium products.

Further analysis into South Korean consumers' dietary preference indicates a shift in spending within food segments. The most significant change comes from the proportion of spending on fruit and vegetables, as percent of total food spend. We project fresh fruit sales to move up from fourth position in consumers' total food spending in 2012 at 12.2% to first position in 2022 at 19.1%. Spending on fresh vegetables will also move up the list, from third position in 2012, making up 12.4% of total spend, to second position in 2022 at 18.4%. Meat and poultry spend is set to move down the food spending rankings from first position in 2012 at 18.7% of total food spend to third position at 17.1% of total sales in 2022. Staples including pasta products and breads, rice and cereals are also set to fall as a share of total sales, decreasing from 23.1% in 2012 to 17.3% in 2022. A healthification trend is therefore becoming more apparent amongst South Korean consumers with the fruits and vegetables being favoured over other food groups.

Healthy Foods Growing In Favour
South Korea - Food Segment Sales, % Of Total
f= BMI forecast. Source: BMI/National Statistics

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