38 SOUTH KOREA
South Korea’s per capita coffee consumption is five times greater than in the rest of the Asia Pacific region. Despite the economic downturn and health and safety concerns, the sector continues to grow, particularly as the younger generation embraces Western coffee culture
Information Network (GAIN), the Korean coffee market continues to expand, with the latest estimates pegging coffee con- sumption at 1kg per person, compared to an average per capital consumption of 0.2kg in the Asia-Pacific region. "Widespread penetration of coffee in
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the country means that there is already a solid consumer base for coffee-related beverages," said the authors of the report. "Moreover, increased income lev- els in tandem with rapid economic growth and adoption of a Western lifestyle make coffee an affordable and fashionable drink for many of Korea’s young con- sumers." Despite the economic downturn and
various health-related problems - includ- ing the much-publicised melamine inci- dent in China - and other substance issues in 2008, the coffee industry in the country continues to grow.
Soluble has
largest share Soluble coffee holds the largest market share in Korea’s coffee market. With its
Coffee imports into South Korea – volume and value
ccording to the latest report on the market from the US Department of Agriculture’s Global Agricultural
Product developers target fast-growing Korean coffee market
convenience and established traditional popularity, instant coffee accounts for around 90 per cent of the market. However, coffee which uses Arabica has consistently gained in market share in the past decade. "This trend has been very conspicu-
ous," said the authors of the report, not- ing that the Chief Executive of Holly’s Coffee estimates that Arabica-based coffee could account for up to 40 per cent of the market in the next five years. "As consumer tastes are becoming more sophisticated, they seem to demand more varieties and premium quality in coffee products," the report said. Demand for Coffee Mix, the dominant
form of instant coffee consumed in the country, has been steady and grew by more than 20 per cent alone in 2005 and by 10 per cent in 2008. The growth in the sales of coffee mixes depends on their convenience but more recently growth is being driven by the availability of ‘premium’ instant coffee mixes. "While there are few of the instant cof-
fee products that are still firm in their popularity, some of the traditional prod-
"Widespread penetration of coffee in the country means that there is already a solid consumer base for coffee-
related beverages," said the authors of the report
ucts, such as in vending machine chan- nelled instant coffee, are facing a tough time," the report said, noting that the melamine incident in 2008 exacerbated the problem of people shunning instant coffee over Arabica-based coffee.
Growing awareness
of health benefits The media has also contributed to con- sumers’ changing preferences. At times, coffee has been deemed to be an ‘unhealthy’ product, and a recent episode of a health-related TV pro- gramme discouraged the use of instant coffee but encouraged the use of Arabica. Until quite recently, coffee in Korea
was a very conservative industry, fixed on producing the same products each year. However, as consumers have begun to look for ‘healthier’ premium coffee, a large number of new instant coffee products have been introduced by companies such as Nestlé Korea. The health and wellness trend was well reflected in the production of products such as ‘Maxim Wellbeing Polyphenol coffee’ and ‘Taster’s choice Wellbeing coffee.’ Others include ‘Maxim Arabica 100’ and ‘Taster’s Choice Supremo,’ and companies have begun to focus more and more heavily on the premium coffee concept. Consumption of roast and ground coffee has increased steadily since 2006, the report said, with the number of take-out coffee shops also growing.
May 2011 C&CI
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