SOUTH KOREA 39
South Korea is the second largest RTD
coffee market in Asia, with volume sales of 137 million litres. In 2008 alone, the RTD coffee market grew 16.9 per cent com- pared to the previous year, and achieved a sales value of approximately US$590 mil- lion in 2009.
Second largest RTD
market in region Sales of RTD coffee are being driven by premium products and by global franchis- es such as Starbucks, Illy and Coffee Bean. As companies such as these have put more effort into positioning their products as ‘premium’ products average unit prices have also risen (they increased by 6 per cent in 2009). Leading the pack is Lotte Chilsung
Beverage Co Ltd, with a 44 per cent share in value terms. Its ‘Let’s Be’ brand led the category with a high level of penetration and wide distribution, but is said to be los- ing volume share to new brands. The company’s Cantata brand, introduced in 2007, targeted young, urban, high income consumers and working people who are familiar with the coffee culture. Dongsuh Food Co Ltd also has a
strong corporate brand and offers three RTD coffee brands: Maxwell House, with a share of almost 8 per cent in 2009, Starbucks Discoveries (3 per cent) and TOP. These products all target different groups and thus are marketed differently.
Packaging important
With products such as these advertising and packaging is particularly important, with existing players and newcomers alike competing in the premium segment. The appearance of RTD packaging is
said to be particularly important in influ- encing purchases among younger women. Packaging often adopts very styl- ish and trendy images and a slim size to attract female consumers. New products are developed in co-operation with well-
Market prices – instant coffee – 250g
Green beans imported in 2008
Roasted coffee imported in 2008
known chains of specialist coffee shops and manufacturers, and manufacturers introduce RTD coffee products in partner- ship with well-known coffee franchises.
Key role for
franchises As urban consumers have sought premi- um coffee provided by franchised special- ist coffee shops and have become loyal to a specific brand or outlet, so manufac- turers have sought to associate their products with the same franchises. Rather than building brands of their own, RTD coffee players are increasingly look- ing to strategic alliances with existing companies. At the top end of the market certain
stores and shops are already catering to demand for top quality coffee and are offering consumers exotic coffee from unfamiliar places, and are developing
flavours and brands that distinguish prod- ucts such as these from competitors. Korean consumers are also very
health-conscious and a recent trend in favour of drinking black coffee stems from the awareness of the health benefits of coffee, which have been highlighted in the media. Advertising highlighting the health benefits of coffee is likely to be successful. Decaffeinated coffee is not very well known in Korea, but given the recent focus on the health and wellness, demand could grow if products target the right part of the market. There is also evidence of demand for
private label coffee, and E-mart, a large retail store, has produced a private label for almost all of the categories it sells, including coffee mixes and instant coffee. This has been followed by the other retail stores, and almost all of the mega retail stores now have some kind of private label coffee products. C&CI
Coffee mixes – sales by company
May 2011 C&CI
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