Processed Fruit and Vegetables in South Korea

TRENDS

Processed fruit and vegetables declined by 1% in retail current value sales terms in 2017 due to the weak performances of frozen processed potatoes and shelf stable fruit. In South Korea, frozen processed potatoes recorded value sales of only KRW5 billion in 2017. The availability of frozen processed potatoes remained limited in the country. Except for Dongwon F&B, some players distribute imported frozen processed potatoes, but these tend not to be distributed by major retailers. Consumers still consume French fries or chips mainly in fast food outlets rather than at home. Meanwhile, shelf stable fruit is considered unhealthy due to its sugar content and preservatives.

COMPETITIVE LANDSCAPE

Dongwon F&B led processed fruit and vegetables with a 25% share of retail value sales in 2017. The company remained the leader in shelf stable fruit and frozen processed potatoes and jumped from second to first in shelf stable vegetables. It extended its selection of shelf stable fruit and vegetables by adding mango, which supported share growth of one percentage point in the subcategory in 2017. Dongwon overtook General Mills Korea to lead shelf stable vegetables by the end of the review period, mainly based on strong sales of canned side dishes. General Mills Korea, which distributes only canned corn, was hit by decreasing sales of this type of product, while Dongwon benefited by developing a diverse offer of Korean-style side dishes. While the player dominated frozen processed potatoes, it continued to lose value sales and share due to low investment.

PROSPECTS

In constant 2017 terms, processed fruit and vegetables is expected to see a 1% retail value CAGR over the forecast period. The highest-selling type in 2017, shelf stable fruit is predicted to see a negative 3% retail value CAGR. Thus, shelf stable vegetables is set to account for the highest retail value sales by 2018 and consolidate its position by the end of the review period. The convenience concept of canned side dishes supports shelf stable vegetables, which is projected to post the fastest retail value CAGR of 4%. Meanwhile, frozen processed potatoes is projected to see a negative 7% retail value CAGR to reach KRW4 billion in 2022.

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