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KOREAN MARKET MAINTAINS FAST PACE OF GROWTH

MARKET

South Korea’s per capita coffee consumption is five times greater than consumption in the rest of the Asia Pacific region, and despite the economic downturn it continues to grow, particularly as the younger generation embraces Western coffee culture.

According to the latest report on the market from the US Department of Agriculture’s Global Agricultural Information Network (GAIN), the latest estimates peg coffee consumption at 1kg per person, compared to an average per capital consumption of 0.2kg in the Asia-Pacific region.

“Widespread penetration of coffee in the country means that there is already a solid consumer base for coffee-related beverages,” said the authors of the report. “Moreover, increased income levels in tandem with rapid economic growth and adoption of a Western lifestyle make coffee an affordable and fashionable drink for many of Korea’s young consumers.”

Despite the economic downturn and various health-related problems – including the much-publicised melamine incident in China – and other substance issues in 2008, the coffee industry in the country continues to grow.

Soluble coffee holds the largest market share in Korea’s coffee market. With its convenience and established traditional popularity, instant coffee accounts for around 90 per cent of the market. However, coffee which uses Arabica has consistently gained in market share in the past decade.

“This trend has been very conspicuous,” said the authors of the report, noting that the Chief Executive of Holly’s Coffee estimates that Arabica-based coffee could account for up to 40 per cent of the market in the next five years. “As consumer tastes are becoming more sophisticated, they seem to demand more varieties and premium quality in coffee products,” the report said.

Demand for Coffee Mix, the dominant form of instant coffee consumed in the country, has been steady and grew by more than 20 per cent alone in 2005 and by 10 per cent in 2008. The growth in the sales of coffee mixes depends on their convenience but more recently growth is being driven by the availability of ‘premium’ instant coffee mixes.

For more information, see the forthcoming May 2011 issue of Coffee & Cocoa International.

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