Estimated to be worth E521M in 2011, Korea’s organic market is expected to see 18.73% annual growth by 2020,boosted by the 5-Year Development Plan’s aim to increase market share for eco-friendly products. The market is estimated to grow to $6 billion by this time, with 10% of the food industry likely to be represented by organic according (Global Organic Trade / EUGateway)
60 to 70% of Korea’s total food needs is imported. 75% of ingredients used for organic food processing is imported. Growth is down to the popularity of mass-produced, relatively inexpensive goods marketed as prestigious or luxurious. There Growing number of stores specialising in organic products. Reinvigorated growth in the organic sector predicted from 2017 as measures from the 5-Year Development Plan gain traction. Cooperation with major retailers has proven tobe an effective approach in penetrating the organic market.
Consumer Preferences & Channels
Consumers, as with many in the region, are primarily motivated by food safety and for healthier products. Production methods are also a concern. Current high interest and demand for organic food at consumer level is driven by increased buying power and high living standards.
Consumers are less likely to purchase farm gate products with more likelihood of purchase from chains, supermarkets and healthfood shops. Box schemes for example, have not caught on. Popular products are cereals, beers, vegetable oils, herbs, spices, sauces, premium confectionary & alcohol and increasingly baby and children's food. Consumers are willing to pay 1.4-1.5x more for organic options.
(National Agricultural Cooperative Federation). Domestic retailers usually source from established importers, though some larger ones may import directly.
Emart are ther first and largest discount retailer in Korea. 155 stores in country as of November 2015 and is the owner of a private brand (Jayunjuui) that sells
organic products. NACF Hanaro Mart are a major retailer operated by the National Agricultural Cooperative Federation and found mostly in outskirts and rural areas.25% purchases are through NACF. Choroc Maeul are ab exclusively organic food retailer with 430 offline stores and an online store. Hansalim exclusively ofer organic food and household goods consumer
cooperative and have over 410,000 members from rural and urban areas
across the country. Coupang are Korea’s leader in e-commerce. An important distribution channel for accessible organic products. A heavy reliance on offers/deals or extras in the discounting stores is common and is often at the expense of the supplier of packaged goods.
Equivalence exists between EU and Korea for processed organic products. Under the EU-Korea equivalence arrangement (2015), companies
carrying the EU organic certification label are recognised as “certified
organic” in Korea. Ref. to EC No. 834/2007 for organic 'processed'
food requirements and EC No. 889/2008 for labelling. The definition 'processed' means single ingredient products that have been processed beyond recognition, such as grinding herbs until powdered. Multi-ingredient products are also considered sufficiently processed.
For each shipment a NAQS Korean export certificate needs to be endorsed which Soil Association Certification can do at no cost. Positive release for pesticides is often required too, with a zero tolerance for residues. Single ingredient products need full certification which Soil Association can offer in partnership with Australia Certified Organic (ACO), though the requirement is for the full supply chain certification.
EU Gateway Organic Food & Beverage Business Mission 23 – 27 Oct 2017. A 5-day Business Mission week in Korea will take place in October 2017 with EU support. For more information contact email@example.com.
Sources & Links to Further Info