[News Terms] What Is 'Loconomy' Tempting with Jindo Leek and Pyeongchang Potato?

McDonald's recently re-released the 'Jindo Green Onion Cream Croquette Burger,' which caused an early sell-out in July. This hit product, made with Jindo green onions from Jeonnam that have a richer taste and aroma than regular green onions, recorded sales of 1.5 million units in about a month after its launch. Five Guys, a global handmade burger brand that landed in Korea last June, introduced French fries made from Pyeongchang sun-ripened potatoes from Gangwon-do. It is the most popular menu item at Five Guys, where hundreds of customers wait daily at each store. Both brands are enjoying great success by highlighting menus that embody 'regional characteristics.'

Kim Dong-seon, Head of Strategy at Hanwha Galleria (right in the photo), is harvesting potatoes with farmers in the mountainous region of Pyeongchang-gun, Gangwon, where Korea Five Guys sourced potatoes last July.
[Photo by Hanwha Galleria]

'Loconomy,' a buzzword that has emerged in the distribution industry since the first half of this year, is a newly coined term combining Local and Economy. It refers to a cultural phenomenon of producing and consuming products and stores that incorporate regional characteristics. Typical loconomy products include foods made using local specialties and travel products utilizing tourist attractions.

Loconomy initially grew significantly during the COVID-19 pandemic when overseas travel was restricted and domestic travel surged. Among the MZ generation (Millennials + Generation Z), the perception spread that consuming products with regional value close to home was 'trendy.' It attracted consumers' interest not only because they could enjoy consumption without traveling far but also due to the rediscovery of local stores and renewed recognition of regional specialties.

Companies also moved quickly. They began to focus on loconomy as a valuable policy from the perspectives of symbolism of regions, utilization of local specialties, win-win cooperation with local farms, and ESG (Environmental, Social, and Governance) management.

Paris Baguette introduced the dessert 'Jeju Ma-eum Sand' in August 2019, made with Udo peanuts, a specialty of Jeju. It is a local menu available only at some stores in Jeju Island. Despite the limited sales locations, cumulative sales have exceeded 50 million units, making it so popular that it often sells out.

Starbucks has been consistently selling the 'Yuja Passion Fizzio' made with yuja from Goheung, Jeonnam. This summer, they also introduced seasonal ingredient menus such as the 'Starbucks Watermelon Blended,' made with domestic watermelon and Seongju oriental melon.

The hotel industry is also attracting customers with 'loconomy packages' that incorporate regional characteristics. These packages catch attention with various options such as tourist activities near the hotel and traditional cultural experiences.

A representative from the distribution industry said, "Loconomy also has great significance as a win-win collaboration between companies and local farms," adding, "With the rising concerns about regional extinction due to aging and population decline, if consumers encounter more local specialties and visit various regions, it will greatly help secure sales channels for farms and revitalize the local economy."