"Why Is Japanese Bread Cheaper Than Korean Bread Despite Its Taste?... The Decisive Difference in Proportions [The Secret of Bread Prices]"

Bakery Specialty Stores Account for 23% in Japan and 66% in Korea
Japan's Share of Mass-Produced Bread Reaches 66% Due to Large-Scale Production

Editor's NoteAccording to consumer price trends released by Statistics Korea, while processed food prices rose by 4.1% year-on-year in May, bread prices surged by 6.4%. The bread consumer price index reached 138.48, representing a 38.48% increase over five years compared to the base year of 2020 (100). This rise outpaced even beloved Korean snacks like tteokbokki and fried chicken. Bread, once an affordable treat for everyone, has now become a luxury that is difficult to choose without hesitation. How did bread prices in Korea continue to climb so steeply?

Bread prices in Korea are among the highest in Asia, while prices in Japan remain relatively low, resulting in a clear disparity. Analysts attribute this difference to the contrasting market structures and consumption patterns in the two countries. In Japan, there is strong demand for mass-produced bread sold at convenience stores and supermarkets, whereas in Korea, consumers prefer bread baked fresh in stores, leading to a higher proportion of premium bread.

Citizens are choosing bread at a bakery in Seoul. Photo by Yonhap News

Clear Differences in Bread Market Structure... Japan Focuses on Mass-Produced Bread

According to the "Bakery Industry Market Analysis and Major Regulatory Competition Impact Assessment" report conducted by Kongju National University Industry-Academic Cooperation Foundation at the request of the Korea Fair Trade Commission, Korea's bread consumer price index (CPI) stood at 129 in 2023, higher than Japan's 120. When comparing the price of bread per 100 grams by country, Korea ranked the highest at 703 won, followed by France at 609 won, the United States at 588 won, Australia at 566 won, and the United Kingdom at 487 won. Japan had the lowest price among the surveyed countries at 481 won.

Korea and Japan also show significant differences in their bread market structures. In Japan, bakery specialty stores account for only about 23% of total bread market sales, while mass-produced bread makes up 65.8%. This is the opposite of Korea, where franchise and independent bakeries dominate. In Korea, bakery specialty stores account for 65.7% of total bread market sales.

Mass-produced bread refers to bread that is manufactured in factories, packaged as finished products, and sold directly. Unlike bread baked fresh in bakeries by skilled bakers, mass-produced bread is fully automated from mixing and baking to packaging, resulting in lower labor costs and unit prices. Additionally, stable distribution networks through supermarkets and convenience stores enable large-scale sales, maintaining price competitiveness. Because mass-produced bread occupies a large share of the Japanese market, the benefits of economies of scale are reflected, keeping average bread prices low.

Preference for Basic Bread Like White Bread Over Desserts

Consumption patterns have also influenced bread prices. In Korea, the bakery cafe culture is well-developed, leading to high consumption of dessert bread made with premium ingredients and elaborate presentations. In contrast, in Japan, it is more common to eat bread at home as a meal replacement rather than in cafes, resulting in higher consumption of staple bread, particularly white bread. In 2023, white bread accounted for 45.4% (536,866 tons) of Japan's total bread production of 1,183,035 tons.

The reason why Japanese people do not typically enjoy desserts in cafes is related to their unique food culture. In the past, traditional coffee shops called "kissaten" developed in Japan, which were perceived mainly as beverage-focused spaces for smoking and enjoying coffee or tea. Although bakery cafes have become more common in recent years, they still focus primarily on beverage sales, making the culture of enjoying bread in cafes, as seen in Korea, less prevalent.

Furthermore, the convenience store infrastructure has played a decisive role in boosting mass-produced bread consumption. Japan, often called the "kingdom of convenience stores," operates more than 55,700 convenience stores. The convenience store market in Japan began to take shape in the 1970s, a decade earlier than in Korea, which introduced convenience stores in the 1980s. With this early establishment of convenience store infrastructure, an environment was created where ready-to-eat foods, including bread, could be easily purchased, naturally expanding the consumption of mass-produced bread. In fact, for Yamazaki Baking, Japan's largest bakery company, 43.2% of sales come from general retail stores, including supermarkets, and 26.1% from convenience stores.

Efforts to Diversify Bread Offerings at Korean Convenience Stores

Breads sold at Seven-Eleven Japan. Seven-Eleven Japan official website

Given the high proportion of mass-produced bread in Japan, the range of products is also diverse. Not only are there various categories such as white bread, sandwiches, and cream bread, but there are also seasonal limited editions and collaboration products released regularly. As the range of choices has expanded, consumption has increased further, and the market position of mass-produced bread has been strengthened. In contrast, mass-produced bread in Korea has mostly been limited to basic items like white bread and red bean buns.

However, recently there have been signs of change, with greater variety emerging in the Korean mass-produced bread market. In 2023, convenience store CU launched its own bakery brand, "Bakehouse 405," while GS25 introduced its premium bakery series "Seongsu" in March of last year. Emart24 also launched the "Bakery of the Day (BOTD)" brand in June of the same year, aiming to differentiate itself in the mass-produced bread market.