South Korea's packaged food market is ranked 15th largest in the world, with a value of US$20.0 billion in 2010. Rising incomes have driven market growth and pushed consumer agri-food imports to US$5.7 billion. At the same time, consumer demand has evolved with recent socioeconomic changes. An aging population, growing income disparity, and busier lifestyles have generated interest in health and wellness and convenience-oriented food products. These developments have fostered the trends of product premiumization and value consciousness.
The packaged food market is fairly concentrated, with major South Korean manufacturers controlling significant portions of their respective subsectors. The retail sector that imports and distributes packaged food is similarly concentrated. Hypermarkets and supermarkets distribute the vast majority of packaged food and compete against brand names with their own private labels. Canadian firms thus face entry barriers, but also have opportunities to supply distributors and capitalize on present market trends.
Despite the considerable growth in this market, Canadian exports have fallen in recent years. Competitors, especially the United States and Brazil, are increasingly gaining market share. However, Canada remains the eighth-largest processed food exporter to South Korea, and key exports include meat, cereals, and fish and seafood. Canada is currently in free trade negotiations with South Korea.
