[Salbodogogi] "Comfort is Best" HMR Industry Booms with Changing Eating Habits

Instant Meal Retail Market Size 1.1522 Trillion Won... 10.7% Increase YoY
3 out of 10 Consumers Buy Convenience Foods "Because Cooking is Troublesome and Annoying"
Comprehensive Food Companies Expand Market Share Based on Existing Brand Power and Technology

[Asia Economy Reporter Eunmo Koo] What people eat leads to answers similar to where they spend their money. Changes in Korean tastes and the industrial landscape have acted as both cause and effect, significantly transforming the market. The field most influenced by or influencing the shift from rice to more wheat or meat consumption is the ready-to-eat food sector. As a lifestyle pattern that pursues convenience becomes common, the home meal replacement (HMR) market, centered on processed meat products, is growing.

According to Nielsen Korea on the 24th, the offline retail market size of domestic ready-to-eat foods in 2020 was recorded at 1.1522 trillion KRW. This represents a 10.7% increase from the previous year (1.0411 trillion KRW) and a 22.3% increase compared to 2018 (941.8 billion KRW), showing an annual growth trend of about 10%.

According to the "2021 Processed Food Consumer Attitude Survey" released by the Ministry of Agriculture, Food and Rural Affairs and the Korea Rural Economic Institute, the biggest reason consumers purchased convenience foods last year was "because cooking is cumbersome and bothersome (25.9%)." The recent consumer trend of seeking convenience is directly reflected in food purchases. As consumers look for easy-to-prepare foods to reduce cooking time, processed food consumption has increased, and meat consumption has naturally risen as well. In 2020, the total amount of livestock products such as beef, pork, and chicken used in domestic ready-to-eat food manufacturing was 77,433 tons, accounting for the highest proportion (43.7%) of the total raw material usage (177,207 tons), exceeding grain usage (34.7%) by more than 10 percentage points.

As the convenience food market expands, large comprehensive food companies are also increasing their market share based on existing brand power and technological capabilities. By company, as of 2020, CJ CheilJedang, which owns brands such as "Bibigo," "Hetbahn," and "Gourmet," ranked first with 49.2% of total sales, followed by Ottogi (26.7%), Dongwon F&B (7.8%), private brands (5.2%), and Daesang (2.2%).

With the growth of the convenience food market, consumption of imported meat with price competitiveness is increasing in the processed meat raw material market, and as dining out consumption rises, demand for famous imported brand meats such as Wagyu beef and Iberico pork is also growing. According to the Korea Customs Service, last year's meat import value was $6.05677 billion USD (approximately 7.9767 trillion KRW), a 21.9% increase from the previous year ($4.96683 billion USD). This year, until May, the import value was $3.16281 billion USD (approximately 4.1654 trillion KRW), a 32.8% increase compared to the same period last year ($2.38145 billion USD).

The path to revitalize declining rice consumption is also opening through rice processed foods. Last year, domestic rice production was 5.211 million tons based on milled rice, a 10.6% (498,000 tons) increase from 2020 (4.713 million tons). Although consumption is decreasing, production is increasing, and the government enacted the Rice Processing Industry Act in 2011 to revitalize rice consumption and strengthen the foundation for the rice processing industry. Since 2014, it has been implementing first and second five-year basic plans aimed at discovering future promising sectors, strengthening the foundation for industrial innovation, and expanding demand bases.

Visible results are gradually appearing. Last year, processed rice consumption was 681,057 tons, a 4.6% increase from 2020 (651,500 tons). Processed rice consumption has steadily increased since 2013 (526,140 tons). In particular, consumption in the rice cake and lunchbox manufacturing industries increased by 11.0% and 16.2% year-on-year to 176,690 tons and 46,723 tons, respectively. The industry reports that tteokbokki is gaining popularity as a representative snack, and the market size is expanding due to online sales by famous rice cake shops nationwide, leading to increased demand for tteokbokki rice cakes and traditional rice cakes. The increase in lunchbox consumption is also attributed to the growth of the HMR market, which has boosted demand for processed rice (instant rice, cup rice, frozen rice) and porridge products.