USMEF Strategic Market Profile

South Korea

Market Trends and Growth Potential

• Korean pork per capita consumption is the highest since 1999, though it is forecast to decrease slightly when the short beef supply eases and provides more competition.
• The U.S. share of the Korean pork import market (both chilled and frozen) from January to August, 2007 was 60,171 mt – out of total pork imports of 242,025 mt – a 12% increase over the same period in 2006.

• The domestic self sufficiency rate has shifted downward mainly due to tougher environmental regulations instituted by provincial governments and increasing average production costs.
• Consumer demand for chilled pork is increasing, and the U.S. is viewed as a consistent and ample supplier of competitively priced pork compared to domestic branded and other imported pork.

Market Penetration

• USMEF continues to forge firm relationships with U.S. pork importers and implement promotions in the retail and restaurant sectors to increase awareness of U.S. chilled and frozen pork.
• USMEF supports a variety of activities that disseminate information about U.S. pork through publications, education and food shows.

Product/Industry Image

• In terms of affordable price, consistent/ample supply and good-eating quality, U.S. chilled pork has prime positioning at meat counters at major retail outlets showcasing U.S. pork as a competitive move.
• Consumers still have a low awareness of U.S. chilled pork and a strong loyalty to domestic pork, given the high self-sufficiency ratio.

Operating/Marketing Environment and Trade/Distribution Issues

• More than 20 countries supply pork to Korea. In this environment, price bargaining is the marketing tool that is most often used by pork exporters.
• The Korea Swine Association is spending its check-off funds not only to promote domestic pork consumption but also to highlight a positive image of domestically produced pork. 
• Unlike in the retail sector, most frozen U.S. commodity pork items are vulnerable to competition from European, Chilean and Canadian pork, which are threatening U.S. pork market share with lower prices and the ability to better match importers’ specifications.    
• A proposed COOL bill would increase the number of restaurants required to identify pork origin (as well as beef, chicken, Kimchi and rice) from 4,300 to 19,000 establishments.

Access Conditions

• According to the pork tariff reduction schedule introduced in the Korea-US FTA, the import duty for chilled single ribbed belly, chilled rib and chilled collar butt are to be phased out to zero in 10 years from the date of implementation and the safeguard will be applied in 10 years. In the case of frozen belly, it will be phased out in five years without safeguard application.

Import and market share data is based on import data of Korea (from GTA), and U.S. export data is from the U.S. Department of Commerce, Trade Census Bureau.

Long Term Strategy:

• Support distributors to develop more food service accounts for chilled pork as well as increase sales in retail stores.
• Use extensive trade servicing, education and promotional activities that stress profitability to achieve continuous purchasing and handling of U.S. pork with existing and new target accounts and expand the range of products purchased.
• Utilize education, public relations and promotional activities to address consumer trends and enhance the overall image and receptivity of U.S. pork among targeted Korean consumers.

USMEF Export Forecasts: