"New Menu Leads to Losses... Franchise Cafes on Alert Over Possible Discontinuation of Seasonal Drinks"

Watermelon Retail Price Hits 30,960 Won per Fruit
Cost Burden Rises for Limited-Time Summer Beverages

As the price of watermelon exceeds 30,000 won due to climate factors such as heatwaves and drought, franchise cafe chains that have launched new menu items using watermelon are facing increased cost pressures.

Watermelon juice. Photo by Getty Images Bank

According to the Korea Agro-Fisheries & Food Trade Corporation (aT) on July 30, the retail price of a watermelon as of the previous day was 30,960 won. This is 66.7% higher than the previous month (18,573 won) and 25.9% higher than the previous year (24,588 won). In some retail stores, watermelons are even being sold for as much as 40,000 won each.

The price of watermelon continues to rise as the prolonged heatwave has affected watermelon growth, resulting in lower sugar content and a shortage of watermelons that meet quality standards. In particular, watermelon-producing regions such as Buyeo in South Chungcheong Province have suffered flood damage due to heavy rains this month, and prices are expected to remain higher than both last year and the average for the time being.

In the franchise cafe industry, seasonal items such as smoothies and juices made with watermelon have been released as limited-time summer offerings, but the increased cost burden has left businesses concerned. Some cafes have introduced menu items that use a high proportion of watermelon, such as beverages made with fresh watermelon or products topped with watermelon cubes.

For example, Twosome Place is selling a watermelon juice product made by blending fresh fruit and topping it with watermelon cubes. The company has also launched new products using watermelon, such as 'Woori Watermelon Punch,' which is eaten with a spoon. Recently, Twosome Place has been making every effort to balance quality and price by securing supply from various sources and diversifying procurement.

A Twosome Place representative explained, "Seasonal fruits like watermelon are greatly affected by various costs, including fluctuations in production due to climate change, logistics costs, and labor costs," adding, "At present, we have no plans to end sales early."

Hollys, which has introduced the limited summer menu item 'Real Watermelon Fresh Fruit Juice,' is also closely monitoring changes in the fruit market. Ediya, which is selling 'Fresh Fruit Watermelon Juice' made by blending fresh watermelon and ice, is securing raw watermelon from various regions nationwide to ensure a stable supply. Currently, the main watermelon supply regions for Ediya Coffee are Buyeo, Bonghwa, and Gochang. An Ediya representative said, "For now, there are no plans for early termination," and added, "Although there may be supply fluctuations depending on the harvest, we are working to ensure a stable supply of raw materials and smooth product sales through diversification of sourcing regions and supply chain management."

Paikdabang, which was rumored to be ending watermelon juice sales early, is also expected to continue selling the product. Paikdabang launched its 'Woori Watermelon Juice' in mid-May. A representative from Theborn Korea said, "We are ensuring price competitiveness and a stable supply chain for raw materials through S&OP (Sales & Operation Planning) operations and various purchasing strategies," and added, "For watermelon, we have already negotiated a certain volume with partner companies in advance, so we will ensure there are no major supply disruptions during the peak season in August."

Although the industry is facing cost pressures, companies say they are not considering price increases. This is because the products are sold only for a limited time and supply contracts are being made with various suppliers to ensure availability.

However, contrary to earlier forecasts that watermelon prices would stabilize from late July, prices have continued to rise, so the situation is being closely monitored. Previously, the Ministry of Agriculture, Food and Rural Affairs predicted that supply would become more stable from late July as shipments increase from regions with good harvests such as Yanggu in Gangwon Province, Bonghwa in North Gyeongsang Province, and Gochang in North Jeolla Province, and as watermelon shipments begin in Eumseong, North Chungcheong Province.

An industry official said, "With both heatwaves and heavy rains continuing, it appears that the rise in watermelon prices will persist for some time," adding, "Some companies may bring forward the end date for seasonal beverage sales."