[The K-Food Captivating the World]⑧ The Key to Sustainable Growth Is 'Diversification and Convergence'

'K-Food,' referring to Korean agricultural and food products, is captivating the taste buds of people worldwide. The popularity of K-Food has grown in Latin America, located across the globe, with people in Mexico City enjoying tteokbokki and ramen, and exports to ASEAN, especially Vietnam, a major K-Food market, are showing strong performance. However, the rapid growth in K-Food exports immediately after COVID-19 has recently slowed down. It is pointed out that a strategy to elevate competitiveness to the next level is necessary for K-Food to maintain steady growth.

According to the Ministry of Agriculture, Food and Rural Affairs on the 31st, the export value of K-Food Plus (+), encompassing agricultural and food products and related industries, from January to September this year reached $9.6428 billion, an increase of 5.1% compared to last year. Among these, agricultural and food exports recorded $7.375 billion, up 8.3% from last year. Top export items such as ramen, snacks, beverages, and processed rice products all achieved record-high export performances as of September, driving the export growth trend.

The concentration phenomenon on major items has also intensified. In particular, ramen, the item with the highest export value, exported $103 million in September alone, surpassing $900 million cumulatively this year. Accordingly, the share of ramen in processed food exports, which was 12.3% from January to September last year, increased to 14.5% during the same period this year. The export shares of snacks rose from 8.6% to 9.0%, beverages from 7.9% to 8.1%, and processed rice products from 2.7% to 3.5%. As exports of major K-Food items performed well, the export concentration phenomenon became more pronounced.

The same applies by country. The export share to the United States, the largest market for K-Food exports this year, increased by 1.7 percentage points from 14.2% to 15.9% during the same period. The combined export share to Korea’s three major markets?the United States, ASEAN, and China?also expanded from 49.4% to 50%.

To maintain the growth momentum of K-Food exports, diversification of export items and export countries is urgently needed. Jeong Dae-hee, Vice Chairman of the Korea Rural Economic Institute, stated, "As of 2022, agricultural and food products are exported to 196 countries, so it is not an exaggeration to say they are exported to most countries worldwide. However, upon closer examination, export dependence on three countries?China, Japan, and the United States?accounts for about half of total agricultural and food exports, indicating a concentrated export market." Vice Chairman Jeong added, "It is necessary to consider diversifying export countries to mitigate risks caused by export concentration and to sustain continuous export growth. The more export diversification expands, the more Korean agricultural and food exports will increase."

The government also recognizes the need for export diversification. In February this year, it announced the 'K-Food Plus Export Innovation Strategy' and is promoting the expansion of K-Food export territories. First, to pioneer three new markets?Middle East, Latin America, and India?it is strengthening marketing by hosting K-Food fairs and conducting market research in cooperation with overseas organizations such as NongHyup and KOTRA. To solidify existing markets, market development agents are dispatched to support stable growth in regions like the European Union (EU) and ASEAN, and programs such as localized product development and market testing are operated. Especially for the U.S., China, and Japan, efforts are made to enter 'secondary markets,' which are peripheral provincial cities outside major cities, by supporting local distribution company entries and promoting regional fairs and antenna shops. Additionally, the focus is on discovering influential local buyers by revamping buyer invitation export consultation meetings and expanding online buyer consultations. Kim Jong-gu, Director of Agricultural Innovation Policy at the Ministry of Agriculture, Food and Rural Affairs, emphasized, "To achieve the goal of $13.5 billion for K-Food Plus this year and $23 billion by 2027, we will expand support policies tailored to fresh agricultural products, processed foods, and related industries. To increase exports in related industries, we will develop export-specialized models such as seeds and smart farms suitable for departure environments, expand support for local permits, certifications, market tests, and marketing of export products, and establish export hubs in neighboring regions through cooperation with promising export countries and local partners, while expanding the use of smart farm demonstration greenhouses."

For the sustainable growth of K-Food, convergence with other Korean sectors such as content, home appliances, and distribution is necessary, not just agricultural and food products alone. Lee Gi-won, Co-Chairman of the Korea Food Tech Council and Professor of Food Science and Biotechnology at Seoul National University, argued, "To increase K-Food exports, it is essential not only to export K-Food itself but also to link it with K-content and pay attention to local production and consumption. Convergence in various fields such as home appliances that allow easy and convenient consumption of K-Food and distribution that can transport products in optimal condition is necessary."