Hot Drinks in South Korea
Euromonitor International's Hot Drinks in South Korea market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 53 | Publication date: Jul 2006
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Executive summary
Moderate growth maintained in hot drinks in 2005
The hot drinks market in South Korea in 2005 maintained an upward trend and generated moderate growth in both volume sales and value sales of between 5% and 6% over the previous year. The main driving force for hot drinks has been the consumption of instant coffee and green tea. While fresh coffee has suffered a decline in off-trade sales, the growth of unemployment and the lack of recreational activities in urban areas in Korea have caused young consumers to spend more time at coffee shops and fast food retailers where fresh coffee drinks are in great demand.
The deteriorating economy has driven the popularity of instant coffee in off-trade channels due to its low price and convenience. Less price-sensitive consumers are heavily influenced by the well-being trend which is driving the popularity of green tea and encouraging the development of new products.
Instant coffee mixes offer convenience and value
Despite the influence of the well-being trend, the use of coffee as a stimulant is still widespread and the convenience and reasonable price of instant coffee mixes have made them one of the fastest growing instant coffee products. Instant coffee mixes, particularly 3-in-1 mixes (containing instant coffee, sugar and powdered cream), had sustained growth in 2005 surpassing that of regular instant coffee.
Top three companies retain leadership in hot drinks
In 2005, the top three players in hot drinks remain Dongsuh Foods Co Ltd, Nestlé Korea Ltd and Amore Pacific Corp. Dongsuh Foods led the market with a 54% share of retail value sales in 2005. The company has a strong presence in instant coffee and other hot drinks, particularly, chocolate-based flavoured powder drinks, as well as, a steadily growing influence in green tea. Nestlé Korea was ranked second in instant coffee and chocolate- based flavoured powder drinks. Surprisingly, Nestlé's Nesquik, a leading brand in chocolate-based flavoured powder drinks worldwide, saw a decline in market share over the review period. The third-ranked company in hot drinks, Amore Pacific, led in retail value sales of tea, although the aggressive marketing strategy of Dongsuh Foods in green tea is likely to alter Amore Pacific's standing in the future.
Coffee prices rise overall
Increases in world-wide prices for coffee beans have resulted in market leader Dongsuh Foods Co increasing its prices. Subsequently, this action led to an overall increase in the price of coffee in South Korea.
Well-being trend drives the market
Recently, the desire of South Koreans to adopt a healthy lifestyle, otherwise known as the well-being trend, has driven manufacturers to launch new products in hot drinks that cater to consumers' more sophisticated, health-conscious preferences. Sales of green tea benefited significantly from this trend, as witnessed by dynamic growth exceeding 75% in total value during the review period.
Local green tea compares favorably to Chinese imports
In 2005, there were many controversial issues in South Korea pertaining to products imported from China. According to governmental regulatory bodies, many agricultural products from China were found to violate food standards in South Korea. Contaminants that have adverse effects on humans were found in many products originating in China, including green tea.
The majority of green tea products imported from China that are sold in supermarkets or through the internet have been found to contain lead and cadmium residues, and insecticide residues at levels higher than standard norms in South Korea. Local manufacturers of green tea believe that their products have an advantage over Chinese imports because their tea is grown in local farms and processed at local factories. Locally produced green tea must meet the governmental food standards, and therefore, it is a healthier choice for consumers.
Table of contents
HOT DRINKS IN SOUTH KOREA : MARKET INSIGHT
EXECUTIVE SUMMARY
HOT DRINKS
Market Performance
Table 1 Retail Sales of Hot Drinks by Sector: Volume 2000-2005
Table 2 Retail Sales of Hot Drinks by Sector: Value 2000-2005
Table 3 Retail Sales of Hot Drinks by Sector: % Volume Growth 2000-2005
Table 4 Retail Sales of Hot Drinks by Sector: % Value Growth 2000-2005
Competitive Environment
Table 5 Hot Drinks Company Shares by Retail Value 2001-2005
Table 6 Hot Drinks Brand Shares by Retail Value 2002-2005
Retail Distribution
Table 7 Retail Sales of Hot Drinks by Distribution Format: % Analysis 2000/2005
Table 8 Retail Sales of Hot Drinks by Sector and Distribution Format: % Analysis 2005
Retailer Activity and Private Label Trends
Table 9 Penetration of Private Label by Sector 2001-2005
Forecast Market Performance
Table 10 Forecast Retail Sales of Hot Drinks by Sector: Volume 2005-2010
Table 11 Forecast Retail Sales of Hot Drinks by Sector: Value 2005-2010
Table 12 Forecast Retail Sales of Hot Drinks by Sector: % Volume Growth 2005-2010
Table 13 Forecast Retail Sales of Hot Drinks by Sector: % Value Growth 2005-2010
DEFINITIONS
LOCAL COMPANY PROFILES - SOUTH KOREA
AMORE PACIFIC CORP - HOT DRINKS - SOUTH KOREA
COMPANY BACKGROUND
RECENT NEWS
Summary 1 Summary - Amore Pacific Corp Operational Indicators 2004
PRODUCTION CAPACITY
DONGSUH FOODS CO LTD - HOT DRINKS - SOUTH KOREA
COMPANY BACKGROUND
RECENT NEWS
Summary 2 Summary - Dongsuh Foods Co Ltd Operational Indicators 2004
PRODUCTION CAPACITY
Summary 3 Summary - Dongsuh Foods Co Ltd: Production Statistics 2004
NOKCHAWON CO LTD - HOT DRINKS - SOUTH KOREA
COMPANY BACKGROUND
RECENT NEWS
Summary 4 Summary - Nokchawon Co Ltd Operational Indicators 2005
PRODUCTION CAPACITY
Summary 5 Summary - Nokchawon Co Ltd: Production Statistics 2005
UNILEVER KOREA CO LTD - HOT DRINKS - SOUTH KOREA
COMPANY BACKGROUND
RECENT NEWS
Summary 6 Summary - Unilever Korea Co Ltd Operational Indicators 2004
PRODUCTION CAPACITY
COFFEE IN SOUTH KOREA
SECTOR PERFORMANCE
2005 headlines
Growth in 2005 led by instant coffee
Starbucks dominates on-trade coffee sales
Sales of fresh coffee and instant coffee grow in on-trade channels
Forecast performance
Table 14 Retail Sales of Coffee by Type: Volume 2000-2005
Table 15 Retail Sales of Coffee by Type: Value 2000-2005
Table 16 Retail Sales of Coffee by Type: % Volume Growth 2000-2005
Table 17 Retail Sales of Coffee by Type: % Value Growth 2000-2005
Table 18 Coffee Company Shares 2001-2005
Table 19 Coffee Brand Shares 2002-2005
Summary 7 Summary - Coffee: New Product Launches 2004-2005
Table 20 Forecast Retail Sales of Coffee by Type: Volume 2005-2010
Table 21 Forecast Retail Sales of Coffee by Type: Value 2005-2010
Table 22 Forecast Retail Sales of Coffee by Type: % Volume Growth 2005-2010
Table 23 Forecast Retail Sales of Coffee by Type: % Value Growth 2005-2010
COFFEE PODS PERFORMANCE
Table 24 Standard vs Coffee Pods 2004/2005
TEA IN SOUTH KOREA
SECTOR PERFORMANCE
2005 headlines
Strong growth driven by green tea while black standard tea languishes
Convenience is key to increasing sales
Locally grown green tea has an edge over imported varieties
Fruit/herbal tea sales respond to well-being trend
Profit potential leads to stiff competition in green tea
Forecast performance
Table 25 Retail Sales of Tea by Subsector: Volume 2000-2005
Table 26 Retail Sales of Tea by Subsector: Value 2000-2005
Table 27 Retail Sales of Tea by Subsector: % Volume Growth 2000-2005
Table 28 Retail Sales of Tea by Subsector: % Value Growth 2000-2005
Table 29 Tea Company Shares 2001-2005
Table 30 Tea Brand Shares 2002-2005
Summary 8 Summary - Tea: New Product Launches 2004-2005
Table 31 Forecast Retail Sales of Tea by Subsector: Volume 2005-2010
Table 32 Forecast Retail Sales of Tea by Subsector: Value 2005-2010
Table 33 Forecast Retail Sales of Tea by Subsector: % Volume Growth 2005-2010
Table 34 Forecast Retail Sales of Tea by Subsector: % Value Growth 2005-2010
OTHER HOT DRINKS IN SOUTH KOREA
SECTOR PERFORMANCE
2005 headlines
Forecast performance
Table 35 Retail Sales of Other Hot Drinks by Subsector: Volume 2000-2005
Table 36 Retail Sales of Other Hot Drinks by Subsector: Value 2000-2005
Table 37 Retail Sales of Other Hot Drinks by Subsector: % Volume Growth 2000-2005
Table 38 Retail Sales of Other Hot Drinks by Subsector: % Value Growth 2000-2005
Table 39 Other Hot Drinks Company Shares 2001-2005
Table 40 Other Hot Drinks Brand Shares 2002-2005
Summary 9 Summary - Other Hot Drinks: New Product Launches 2004-2005
Table 41 Forecast Retail Sales of Other Hot Drinks by Subsector: Volume 2005-2010
Table 42 Forecast Retail Sales of Other Hot Drinks by Subsector: Value 2005-2010
Table 43 Forecast Retail Sales of Other Hot Drinks by Subsector: % Volume Growth 2005-2010
Table 44 Forecast Retail Sales of Other Hot Drinks by Subsector: % Value Growth 2005-2010