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Quick Stats

Organics Dashboard From Passport

  • Maeil Diries Co Ltd leads the organic segment in South Korea with a value share of 53.5% in 2019, followed by the National Agricultural Cooperative Federation with a value share of 6.5% and Seoul Dairy Cooperative with a value share of 3.1%.
  • The outlook for organic products in South Korea is unfavorable, with Year on Year growth expected to continue to remain significantly low (ranging between -2.4% and -0.4% for the period 2020-2024), compared to the Asia Pacific, which is expected to have a minimum Year on Year growth of 8.3% for the same period, indicating that organic products in South Korea are likely to witness bleak sales for the forecast period 2019-2024, reaching a market size of US$233.3 mn by 2024.

  • Organic products in South Korea represent roughly 0.5% of global demand and approximately 5.1% of the market in the Asia Pacific region, recording a per capita expenditure of US$4.7 in 2019.
Qualitative Analysis

Qualitative Analysis

Quick Facts
  • Organic packaged food and beverages in South Korea witnessed a value decline of 1.1% in 2019, recording a market size of US$242.0 mn in 2019.
  • Growth in organic beverages in 2019 was led by Organic fruit/vegetable juices with a value growth rate of 5.0% in 2019.
  • Organic prepared baby food was among the few categories which recorded growth for organic packaged food in South Korea, registering an increase of 10.0% in 2019.
Market Trends
  • Organic products in South Korea suffer weak demand in most categories other than confectionery, milk, rice and baby food. This is primarily due to a low level of consumer confidence on the credibility of organic certifications. As a result, some channels have discontinued the sale of organic products and switched towards products with other marketing labels such as environmentally friendly or non-antibiotic products.
  • For the few organic products that gained consumer interest and trust, the high unit price is another barrier deterring volume growth, leading to organic products remaining niche among South Korean consumers.
Competitive Landscape
  • Maeil Dairies occupied the leading position within packaged food in South Korea, recording a share of 54.7% in 2019. The company accounted for nearly half of all value sales in dairy and baby food, which are the two biggest organic categories, contributing for 43.5% and 31.0% respectively in 2019. With the increase in value sales for organic milk, Maeil managed to increase sales of shelf-stable flavored organic milk aimed at children (100-120ml pack sizes), which offer convenience to carry for one-time consumption.
  • The National Agricultural Cooperative Federation of South Korea has reported a marginal increase in value sales of organic rice in 2019 due to the premiumization trend within the rice category, despite total sales witnessing a gradual decline. Moreover, Korean rice farmers have increased productivity, with high yields using fewer chemical inputs, in an attempt to improve their offerings to capitalise on the premiumisation trend and boost rice consumption as a whole.
  • Some domestic players, including Nokchawon and Seoul Dairy Cooperative, continue to lead organic beverages in South Korea, with a share of 19.6% and 6.6% respectively. Nokchawon led organic hot drinks with organic green tea bags while Seoul Dairy Cooperative promoted the organic variant of its flagship juice brand, Achimae Juice. However, the organic beverages category is still highly fragmented in 2019, primarily due to its relatively small market size and low investment. Even for organic coffee, which is considered a high potential area, manufacturers argue it is still a niche category, which is not yet ready for a significant investment.
Prospects And Growth Opportunity
  • Consumers in South Korea still struggle to trust organic labels. As a result, organic products struggle to retain shelf space among retailers. That being said, in categories such as organic milk and baby food, there is potential as sales have been stable, with value CAGRs of 6.9% and 1.6% respectively. For companies that are aiming to enter into organic dairy or baby food, promoting organic labels in conjunction with other labels such as antibiotics free or sustainable practices could help lead to sales while also adding value to the organic product market.
  • Overall, in packaged food, the outlook is concerning, with the category expected to record a negative CAGR of 1.0% for the period 2019-2024. However, products targeted towards children have shown positive sales, supported by parents' desire to provide healthier options for their children.
  • Within organic beverages, products aimed at children have witnessed some positive performance, supported by two main factors, food safety and the popularity of cartoon characters. Manufacturers of products targeted at children use TV cartoon characters on organic beverage labels, a strategy that has had a dramatic impact on children's beverage sales, making it the top sellers among organic RTD beverages.
General Health And Wellness Trends
  • Currently, organic products in South Korea struggle to gain interest from consumers. However, demand for other labels such as antibiotics free and sustainable practices have seen rising popularity with several retailers replacing organic products shelves with related label products.
  • Organic coffee, as well as organic ready to drink beverages and organic fruit/vegetable juices, are the categories witnessing some demand, primarily as ready to drink beverages and fruit juices are mainly targeted towards serving children. Overall, except organic coffee, the majority of demand within organic beverages is driven by products aimed at kids.
General Economics And Demographic Landscape

Economy:

  • The economy of South Korea is expected to see marginal gains in 2020, due to sluggish growth in exports, particularly in electronics, which has been affected by the slowdown in China.
  • An expansionary fiscal policy is expected to boost public investment. Real GDP growth recorded 1.8% in 2019, post gains of 2.7% in 2018. Over the coming years, annual rates of growth in real GDP are expected to be around 2.2% for the period 2020-2027.
  • Private final consumption witnessed an increase of 1.9% in 2019, with a growth of 1.5% expected for 2020. The high household debt is a key driver for lower consumption, as Koreas household debt exceeds 160.0% of household income, weakening consumer confidence and dampening growth.
     

 Population demographics:

  • The population of South Korea is witnessing a slow rise, amounting to 51.9 million in 2019. The country is expected to add about half a million more people between 2019 to 2030.
  • The median age in 2019 was recorded at 43.2 years, above the regional average and 11.4 years greater than the figure for 2000.
  • There is a rapid increase in those over the age of 65 years. The proportion of those over 65 years, which made up 14.9% of the population in 2019, is expected to increase to about 25.0% by 2030.
     

Income & expenditure:

  • The savings ratio in South Korea amounted to 11.9% of disposable income, with the rate expected to dip to 11.8% in 2020.
  • Consumer expenditure per capita was recorded at US$14,315 in 2019, with a growth of 1.1% expected in 2020. Communications is expected to be the largest category in terms of consumer expenditure for the period 2020-2030.
  • Disposable income per capita, which amounted to US$16,604 in 2019, is expected to increase by 1.0% in 2020. For the period 2020-2030, disposable income is expected to witness a cumulative increase of 19.8% in real terms, growing at an annual average rate of 1.8%.
Data

Data

Organic Packaged Food And Beverage Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

CAGR
(16-19)

CAGR
(20-22)

Health & wellness products consumption

USD million

7,321.1

7,538.8

7,697.0

7,891.4

8,071.9

8,279.6

8,502.2

2.5%

2.6%

Organic packaged food and beverages consumption

USD million

224.7

243.8

244.7

242.0

236.1

234.5

233.3

2.5%

-0.6%

Organic packaged food consumption

USD million

219.9

238.7

239.4

236.8

230.8

229.2

227.9

2.5%

-0.6%

Organic beverages consumption

USD million

4.8

5.1

5.3

5.3

5.3

5.3

5.4

3.4%

0.9%

Organic packaged food and beverages consumption as a % of total health & wellness products consumption

%

3.1%

3.2%

3.2%

3.1%

2.9%

2.8%

2.7%

-

-

Economic And Demographic Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

Total population

million

51.2

51.4

51.6

51.9

52.0

52.1

52.1

% Middle and upper class of total population

%

36.3

36.0

35.9

35.8

35.8

35.7

35.7

% Population aged 65+

%

13.2%

13.8%

14.3%

14.9%

15.7%

16.5%

17.3%

% Population aged 0-14

%

13.4%

13.1%

12.8%

12.5%

12.2%

12.0%

11.7%

% Population with higher education degrees

%

31.0

31.0

30.9

30.9

30.9

30.9

30.8

Average number of children per household

children

0.4

0.4

0.4

0.4

0.4

0.4

0.3

GDP per capita

USD per capita

29,149.4

30,619.1

31,473.7

31,661.8

31,984.1

32,729.5

33,436.6

Consumer expenditure per capita (US$)

USD per capita

13,079.6

13,516.2

14,073.3

14,314.8

14,474.8

14,697.0

15,000.2

Consumer expenditure per capita on food and non-alcoholic beverages (US$)

USD per capita

1,781.6

1,865.0

1,931.8

1,967.7

1,974.4

2,012.2

2,054.1

Retailer And City Data

Top 5 Cities By Population

Data category

Rank

City/retailer

Population
(millions)

Top cities by population (2019)

1

Seoul

24.3

Top cities by population (2019)

2

Busan

3.5

Top cities by population (2019)

3

Daegu

2.7

Top cities by population (2019)

4

Daejeon

1.6

Top cities by population (2019)

5

Gwangju

1.6

Top 5 Grocery Retailers By Sales

Data category

Rank

City/retailer

Top grocery retailers by sales (2019)

1

Shinsegae Co Ltd

Top grocery retailers by sales (2019)

2

GS Holdings Corp

Top grocery retailers by sales (2019)

3

BGF Retail Co Ltd

Top grocery retailers by sales (2019)

4

Homeplus Co Ltd

Top grocery retailers by sales (2019)

5

Lotte Group

United States Department Of Agriculture Global Agricultural Trade System Data

Top 5 Export Commodities To South Korea

Year

Country

Rank of
Product/Commodity

Product/Commodity

Export Value (US$)

2019

South Korea

1

Organic Grapes Fresh

11,466,518

2019

South Korea

2

Organic Cherries Fresh

2,477,830

2019

South Korea

3

Organic Coffee Roast Not Decaf

1,958,950

2019

South Korea

4

Organic Cult Blueberries Fresh

1,779,986

2019

South Korea

5

Organic Grapefruit Fresh

1,337,302

2019

South Korea

Total

Total Organics*

23,114,185

2018

South Korea

1

Organic Grapes Fresh

18,851,985

2018

South Korea

2

Organic Cherries Fresh

6,381,790

2018

South Korea

3

Organic Coffee Roast Not Decaf

5,389,778

2018

South Korea

4

Organic Grapefruit Fresh

2,093,601

2018

South Korea

5

Organic Cult Blueberries Fresh

1,271,000

2018

South Korea

Total

Total Organics*

38,121,057

2017

South Korea

1

Organic Grapes Fresh

4,900,620

2017

South Korea

2

Organic Grapefruit Fresh

4,541,946

2017

South Korea

3

Organic Cherries Fresh

2,954,358

2017

South Korea

4

Organic Cult Blueberries Fresh

2,798,470

2017

South Korea

5

Organic Lemons Fr/Dr

2,520,451

2017

South Korea

Total

Total Organics*

23,993,090

2016

South Korea

1

Organic Grapes Fresh

7,845,993

2016

South Korea

2

Organic Grapefruit Fresh

2,768,230

2016

South Korea

3

Organic Lemons Fr/Dr

2,313,726

2016

South Korea

4

Organic Head Lettuce Fr/Ch

1,491,825

2016

South Korea

5

Organic Lettuce Not Head Fr/Ch

1,475,569

2016

South Korea

Total

Total Organics*

19,737,095


Note : Total organics is the sum of all exports in a particular year   
Definitions

Definitions

Term

Definition

Health and Wellness

Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Organic packaged foods and beverages

This category includes packaged food & beverages that are certified organic by an approved certification body. Organic production is based on:

• A system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers.
• Organic food & beverages are minimally processed without artificial ingredients, preservatives or irradiation.
• The use of GMOs (Genetically Modified Organism) is prohibited. “Certified Organic” means the item has been grown according to strict uniform standards that are verified by independent state or private organizations.
• Depending on the country, such products are called ‘organic’, ‘biological’ or ‘ecological’: For organic products to be included under Euromonitor definitions, the organic aspect needs to form part of positioning/marketing of the product. This is an aggregation of organic baby food, bakery, confectionery, dairy, ice cream, oils and fats, ready meals, rice, sauces, dressings and condiments, snack bars, soups, spreads, sweet and savory snacks and other organic food.

Note that fresh food products or individual ingredients are not included in this definition.

Compound annual growth rate (CAGR)

The compound annual growth rate (CAGR) is the average annual growth rate over a specified period of time. For instance, the CAGR consumption of from 2016 – 2019 will be the average growth rates across these three years.

USDA GATS data clarification

The data presented in table 2.4 represents the dollar values of the top 5 organic commodities as well as of the total organic exports of the trade partner for the period 2016-2019 as per the United States Department of Agriculture’s Global Agricultural Trade System, a database consisting of international agricultural, fish, forest and textile products trade statistics dating from the inception of the Harmonized coding system in 1989 to present.

Policy Information

Policy Information

Government Agency(s) / Competent Authority

Authorized Government Agency(s):

Ministry of Agriculture, Food and Rural Affairs (MAFRA)
MAFRA's National Agricultural Product Quality Management Service (NAQS) is responsible for setting quality standards and grades for agricultural products, enforcing country of origin marks, GMO labeling requirements, and organic labeling for fresh fruits, vegetables, and grains in the marketplace, accrediting certifiers of non-processed organic produce, and post monitoring of labeling of organic processed food products in the market place. NAQS collects samples from retail markets and tests products for GMO content with RDA-developed testing methods.

Agency(s) Contact Information:

Ministry of Agriculture, Food and Rural Affairs (MAFRA)
94 Dasom2-ro
Government Complex-Sejong
Sejong-si 339-012,
Republic of Korea
Phone: 82-2-1577-1020
Website

Environment-Friendly Agriculture Division of the MAFRA
Phone:  82-44-201-2432
Fax:  82-44-868-0483
Email:  chds@korea.kr or kbb0922@korea.kr

NAQS
172, Anyang-no, Manan-gu, Anyang-si, Gyeonggi-do
Phone: 82-31-446-0124
Fax: 82-31-446-0901

Organic Regulations and/or Standards

Name(s) of Regulation and/or Standard:

The US has had an organic equivalence arrangement with Korea for organic processed foods since July 1, 2014.  Organic processed products certified in Korea or in the US may be sold as organic in either country. 
 
Korean Organic Regulations (KOR)
 
The Act on the Management and Support for the Promotion of Eco-Friendly Agriculture/Fisheries and Organic Foods consolidates Korea's organic regulations, and is sometimes referred to as the New Organic Regulations. Certification by a MAFRA-approved certifier is required for organic fresh produce, livestock products, and processed foods, unless an equivalency agreement is in place. 
 
See the USDA's Food and Agricultural Import Regulations report for more details.
 
Environment-friendly Agriculture Promotion Act (.pdf; unofficial English translation)
- Enforcement Regulations and Annexes
- Guidelines on Designation as a Foreign Certification Body
 
Food Industry Promotion Act (.pdf; bilingual, scroll down for English) 
- Enforcement Decree
- Enforcement Regulations and Annexes
- Guidelines for Designating and Operating Certification Agencies
- Certification Inspection by Site and Related Training Sessions
- Operational Guidelines for the Organic Processed Food Certification Program

Date of Implementation: 2011

Regulation and/or Standard Scope:

The new Act on the Management and Support for the Promotion of Eco-Friendly Agriculture/Fisheries and Organic Foods consolidates Korea's organic regulations, and is sometimes referred to as the New Organic Regulations. Certification by a MAFRA-approved certifier is required for fresh produce, livestock, and processed products, unless it is a processed organic product that meets the requirements of the US - Korea equivelence agreement effective July 1, 2014. 

Imported Products

The U.S. has an organic equivalence arrangement with Korea for organic processed foods. US - Korea organic equivalency arrangement covers products which: 

Are certified to the USDA or Korean organic regulations  Are “processed products” as defined by the Korean Food Code  Contain at least 95% organic ingredients  Have their final processing (as defined in the Korean Food Code) occur in the US or Korea  U.S. products: do not contain apples or pears produced with the use of antibiotics  Korean products: do not contain livestock products produced with the use of antibiotics 

 

Critical Variances
The US - Korea equivalency arrangement applies ONLY to processed products as defined by the Korean Food Code (Korean Food Code 1.2.29): "Processed food" refers to a food manufactured, processed, and packaged by adding food or food additives to food raw materials (agricultural, forestry, livestock, or marine products), transforming food raw materials (such as grinding or cutting) till their original forms cannot be recognized, or mixing such transformed ones or adding food or food additives to such mixture. However, where, without the use of food additives or other materials, the agricultural, forestry, livestock, or marine products are simply cut, peeled, salted, ripened, or heated (except the cases where heating is performed for sterilization or heating causes significant changes to those products) till their original forms can be recognized or where sanitary risks from treatment processes are not expected and food raw materials are simply treated so as to allow organoleptic identification of food quality, such food products are excluded from the definition of the processed food.”

The US - Korea equivalency arrangement does NOT provide for equivalency for trade in raw and unprocessed products in accordance with the Korean Food Code. There are no provisions in the agreement covering organic aquaculture. All domestic and imported organic products other than those covered by the equivalency must be certified by a MAFRA-accredited certifying agent.

Seal Use
Use of the USDA Organic seal and/or the MAFRA Organic Logo is allowed and optional, provided that products meet the USDA/Korean labeling requirements.

Certifier Mark
Korea and the US require that the Accredited Certifier must be identified on the label.

Product must meet Korean general labeling requirements.

Organic agricultural produce complying with the U.S. organic standards or international standards still needs certification from MAFRA's official certification agency to carry a "Korean language organic label" in the Korean market.

Special Act on Imported Food Safety Management (2016)
Foreign facilities, including food facilities, packing houses, grain storage facilities, fishery plants, etc., that handle products inspected by Korea’s Ministry of Food and Drug Safety (MFDS) must register and agree to inspection by MFDS. Submit registrations online, or by mail. See details in the GAIN Report on Korea's Special Act on Food Safety Management.

Concerning pesticide residues and imports:

Korea is shifting to a positive list system for pesticide residues which may be detectable in foods. Residue database  Korea’s import tolerances system assesses safety and sets a maximum residue limit (MRL) of a pesticide that remains in food according to the regulations of foreign countries, if the product imposes no threat to human health, in the case an MRL has not been previously established in Korea.

US processed organic products exported to Korea must be accompanied by the NAQS Import Certificate of Organic Processed Foods that includes the statement “Certified in compliance with the terms of the US – Korea Organic Equivalency Arrangement.” Also, a copy of USDA/NOP organic certificate shall be submitted for import inspection in Korea.

The Act on the Management and Support for the Promotion of Eco-Friendly Agriculture/Fisheries and Organic Foods (New Organic Act) requires all domestic and imported organic processed products other than those covered by the equivalency to be certified by a MAFRA-accredited certifying agent. Each product is required to get an organic certification in order to be sold as organic in Korea.   

Certification and Accreditation

Certification:

In addition to certification for plant and animal products, certification is also required for products comprised of less than 70% organic ingredients. Certification information is available online.

Accreditation Method:

Government

Accreditation:

Accreditation is done by MAFRA's National Agricultural Product Quality Management Service (NAQS), and must be renewed every five years. 

Additional Information

Korea is on the EU's third country list.

USDA GAIN Report Organic Foods Market Report (2019)
USDA GAIN Report Retail Foods (2019)
USDA GAIN Report HRI Food Service Sector Report (2019)
USDA GAIN Report Food Processing Ingredients (2020)
USDA GAIN Report Retail Foods Biennial Report (2017)
USDA GAIN Report Korea's New Biotech Labeling Requirements (2017)
USDA GAIN Report Exporter Guide (2019)
USDA GAIN Report Korea's Special Act on Imported Food Safety Management (2016)
USDA GAIN Report Republic of Korea Food and Agricultural Import Regulations and Standards - Certification (2020)
USDA GAIN Report Republic of Korea Food and Agricultural Import Regulations and Standards - Narrative (2017)
USDA GAIN Report Food and Agricultural Import Regulations and Standards Country Report (2020)
USDA GAIN Report Pet Food Market Update (2016)