[Easy Meal] The Restaurant Has Come Home... Infinite Evolution of Convenience Foods

Establishing New Dining Culture with Premium and Healthy Foods... Market Size Approaching 5 Trillion Won
Expansion from First '3-Minute Curry' to Frozen/Refrigerated Foods and Popular Meal Kits
'Active Seniors' Over 55 Emerging as New Consumers; Care Food Also in Spotlight

The Home Meal Replacement (HMR) market is leading the food industry trend by meeting convenience and health needs amid societal factors such as the increase in single-person households and the prolonged COVID-19 pandemic. Asia Economy has promoted the excellence of domestic home meal replacements through exhibitions every year to revitalize the industry, but due to difficulties in holding external events again this year because of COVID-19, it is substituting with print planning. Additionally, interviews with key talents from major domestic food companies possessing world-class technology are being serialized over two weeks in May to review the current state and envision the future of the domestic HMR market.

[Asia Economy Reporter Lim Hye-seon] The Home Meal Replacement (HMR) market is evolving. In the 'post-COVID' era, demand for convenience foods is increasing due to the rise in single-person households and the growing demand for 'home dining.' HMRs, which can be easily prepared using a microwave or air fryer, have grown from initially being mainly stockpiled frozen foods to becoming meaningful meals with upgraded ingredients, health focus, and meal replacements, establishing a new dining culture. HMR refers to foods that are processed, cooked, and packaged so that they can be conveniently eaten after a simple cooking process.

Convenience Food Market Approaching 5 Trillion Won

According to the Ministry of Food and Drug Safety and the Korea Agro-Fisheries & Food Trade Corporation on the 7th, the HMR market, which exceeded 4 trillion won last year, is expected to form a mid-4 trillion won scale this year and reach a 5 trillion won market next year. Especially after COVID-19, not only major food companies but also dining-out businesses have rushed to enter the market, and currently, about 3,000 companies are producing convenience foods.

According to the Korea Foodservice Industry Research Institute, the number of convenience food manufacturers was only 1,039 in 2009 but exceeded 1,639 in 2018 and 2,252 in 2019. The number of convenience food items also surpassed 38,952 in 2019 and reached about 40,000 by the end of last year.

The explosive growth of the convenience food market is due to the increase in single-person households and the rise in non-face-to-face consumption caused by COVID-19. According to Statistics Korea, the number of single-person households exceeded 6 million for the first time in 2019, reaching 6,148,000. According to KB Management Research Institute, the average monthly consumption expenditure of single-person households is 1.41 million won, of which 16.8%, or 360,000 won, is spent on food. The purchase proportion of HMR within food expenses is 30%, meaning at least 100,000 won per month is spent on convenience food purchases.

Evolution from 3-Minute Curry to Meal Kits

HMRs are classified by the cooking process until consumption into ready-to-eat foods, ready-to-cook foods, and pre-prepared foods. The first HMR product introduced in Korea was Ottogi’s ‘3-Minute Curry’ in 1981. Subsequently, products such as jajang (black bean sauce), rice bowl sauces, and meatballs that can be eaten with rice began to popularize. HMR gained attention in the early 2000s as the number of singles and dual-income households increased. From then on, companies expanded products focusing on refrigerated and frozen fresh foods such as frozen dumplings, anticipating increased HMR consumption. The range diversified to include cup rice, soups, stews, side dishes, and recently expanded to various collaborative products with famous restaurants and meal kits that allow consumers to enjoy cooking. Companies are also actively releasing premium products focusing on quality and health.

Especially last year, the meal kit market grew rapidly. The meal kit market size surged from 10 billion won in 2017 to 200 billion won last year. The industry expects it to grow to 300 billion won this year. As products diversified, consumer choices expanded. According to the 2020 Food Industry Market and Consumer Trend Analysis published by the Korea Agro-Fisheries & Food Trade Corporation, the number of meal kit products increased sharply from 270 in September 2019 to 1,010 in October last year, just over a year later. Product prices also vary widely from 2,000 won to 75,000 won. An industry insider explained, "With the emergence of frozen meal kits with extended shelf life that compensate for the shortcomings of existing refrigerated products, they have also become staple foods."

Rapid Rise of the Senior Generation

Companies are focusing on developing targeted products. In particular, the ‘active senior’ generation aged 55 and over is seen as a new consumer group, and customized foods for them are being released one after another. The elderly population is expected to reach 8.54 million (16.5%) this year and account for 19.2% of the total population in three years, according to Statistics Korea.

Last year, the characteristic of ‘individual eating’ strongly appeared in senior households. According to Kantar Worldpanel, the purchase experience rate of convenience food porridge among senior households (with the youngest member aged 55 or older, 2.83 million households, accounting for 14.5% of the total 19.58 million households) increased by 15.7% from July 2019 to June 2020 compared to the same period two years earlier. This increase rate is higher than the 13.5% increase in purchase experience rate among all households. Especially, soup dishes are in high demand. While the purchase experience rate for soup dishes among all households increased by 9.9%, the increase rate among senior households reached 17.8%.

Attention is also being paid to care food. According to the Korea Health Industry Development Institute, the market size of elderly-friendly foods, which was 6.4 trillion won in 2017, more than doubled to 17.6343 trillion won last year. Food companies see great growth potential in the silver food market and are establishing dedicated silver food business divisions and investing in food development and production.