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South Korea Food and Drink Report Q2 2008Published by: Business Monitor International Published: Apr. 30, 2008 - 69 Pages Table of Contents
AbstractSouth Korea continues to top BMI’s Asia Pacific Business Environment Ratings, the potential of this notquite developed, yet certainly past emerging food and beverage market, aided by the relative lack of risksassociated with investing to realise this potential. The past quarter has seen major industry multinationals,among them UK majors Tesco and Diageo and US giant The Coca-Cola Company (TCCC), reaffirmtheir commitment to the market, while local firms, such as Nong Shim and Hite also strive to make themost of this unique regional opportunity.However, as BMI’s newly-published Q208 South Korea Food & Drink Report discusses, the country hastipped past that point where it attracts major ground-breaking market entry investments from industrymajors - market maturity simply does not warrant them when so many other higher-growth regionalinvestment opportunities are available. Nonetheless, the country continues to encourage furtherinvestment from its existing industry players suggesting that strong growth opportunities do exist in themarket, provided the investor knows where to look. One such opportunity is South Korea’s alcoholic drinks market. BMI is forecasting value sales growth of12.7% to US$1.39bn in the industry to 2012. The mature beer market will of course contribute to this andimports of high-value Western lagers are expected to be a particularly strong premium growthopportunity in the medium-term. However, the spirits and wine industries appear more exciting and theopportunity on offer here will explain Diageo’s eagerness to return to South Korea this quarter, after itwas banned from directly operating in the country in 2007 due to the use of unlicensed distributors. Involume terms, sales of spirits and wine in South Korea are expected to increase by 42.6% and 17.1%respectively to 2012 and yet a value sales growth forecast of an incredible 174% for the wine industryshows just how strong the potential for investment is here. South Korea’s alcoholic drinks market has benefited from a relaxed attitude towards alcohol consumptionamong both male and female consumers and yet it has likewise benefited - arguably to an even greaterextent than other industry sub-sectors - from the country’s sustained economic development. GDPgrowth in South Korea is expected to average a healthy 4.8% annually to 2012, further fuelling thedevelopment of added-value and non-essential food and beverage industries. A moderate, but apparentlowering of consumer confidence throughout 2007 does appear to have held into 2008 and this does posea slight risk to food and beverage sales growth. Likewise, food price inflation will have a cautionaryimpact on consumer purchasing decisions. However, confidence is not expected to drop further and the opportunity to pursue sales growth at thepremium end of the food and beverage industries will remain an inviting prospect. Get Full Details About This Report >> |
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