Home Meal Replacement Creates New Opportunities in Korea

For the first time, this year’s U.S. Meat Market Seminar in South Korea included home meal replacement (HMR) as a main focus. The USMEF seminar, funded by the USDA Market Access Program, the Pork Checkoff and the Beef Checkoff Program, attracted more than 220 traders, distributors, foodservice managers and retailers from across Korea.

At the U.S. Meat Market Seminar in Seoul, Jihye Shin, senior manager of the Nielson Company, presents a report based on Home Meal Replacement (HMR) market research that shows great potential for beef and pork products

In American terms, HMR is similar to ready-to-eat meals purchased at grocery stores and delis. Beef and pork – especially processed products – play major roles in the building of these meals.

“The Korean HMR market is in the early stages of development, so there are various definitions of HMR in the market and the scope of the HMR business is still very large at this point,” said Jihae Yang, USMEF director in Korea. “The U.S. Meat Market Seminar presented a very good opportunity to provide basic information, as well as specific market analysis showing the great potential for red meat in Korea’s HMR sector.”

Jihye Shin, senior manager of the Nielson Company, presented a report based on HMR market research conducted in October 2015. The report compared Korea’s HMR market to other developed countries such as Japan, Great Britain and the United States. Korea’s HMR industry got its start about 25 years ago but has recently been expanding due to an increasing number of single households, working women and older citizens, Shin noted. The share of single households in Korea jumped from 6.9 percent in 1985 to 27.1 percent in 2015. The market for HRM reached $1.6 billion in 2015 and is expected to hit $1.9 billion this year, she said.

The HMR market in Korea is broken into four segments: Ready to Prepare (RTP), Ready to Eat (RTE), Ready to Heat (RTH) and Ready to Cook (RTC).

More than 220 traders, distributors, foodservice managers and retailers attended the seminar, which included an update on global beef and pork trade

“The HMR market trend is shifting rapidly from traditional items such as instant noodles and cereal to items that replace full meals, such as frozen meat patties, dumplings, and items like rib soup or stew,” said Shin.

Meanwhile, the traditional portion of the U.S. Meat Market Seminar featured updates on market conditions in Korea’s neighboring countries, as well as a look at countries that compete with the U.S. in the export of red meat.

Jessica Strutzel, USMEF trade analyst, gave a market update on global beef and pork production, pricing, and trade. Strutzel said that global pork supplies this year are expected to grow, although at more moderate growth levels than 2015, and relatively lower prices should continue.

On the export side, she touched on the increased EU exports in the region, driven largely by demand from China, the weak Euro, and abundant EU supplies. For U.S. exports, Korea was one of the largest pork growth markets in 2015 along with Mexico, Taiwan, and Central America.

Strutzel told the audience that U.S. beef production will rebound in 2016, but global beef supplies remain limited. She also said Australia’s beef supplies are tightening. They are expected to bottom in 2017 and will not recover to more historically average levels until 2020. With decreased production, Australian exports are expected to be down 18 percent in 2016.

Export volumes were down in 2015 for the top four beef exporters: Australia, India, Brazil, and the U.S., while import volumes for most major importers were also down except for the U.S., Korea, Malaysia, and Chile. Korea and Taiwan were bright spots for U.S. beef exports in 2015 with both posting year-over-year growth.