Sector Trend Analysis – Bakery products in South Korea

Note: This report includes forecasting data that is based on baseline historical data.

Executive summary

Baked goods retail sales increased at a compound annual growth rate (CAGR) of 1.0% from 2017 to 2021, reaching US$3,528.6 million. It will grow at a CAGR of 3.5% from 2022 to 2026, reaching US$4,088.8 million in 2026.

Baked goods grew at a CAGR of 0.9% from 2017 to 2021, reaching 367.9 thousand tonnes in 2021. It is estimated that it will increase to 388.1 thousand tonnes in 2026. The growth will reach a CAGR of 1.5% from 2022 to 2026.

The top three companies that sold the baked goods most from 2017 to 2021 were SPC Samlip Co Ltd (US$262.2 million in 2021), followed by Orion Corp (US$135.8 million in 2021) and Lotte Confectionery Co Ltd (US$129.8 million in 2021).

In terms of brand, top one brand Samlip and No. 4 brand Oh Yes demonstrated a positive growth from 2017 to 2021 at a CAGR of 7.5% and 5.1% separately, reaching US$211 million and US$50.7 million respectively in 2021.

According to Mintel's Global New Products Database (GNPD), 2,724 bakery products were launched in South Korea from 2017 to 2021. Top sub-categories of new bakery products included cakes, pastries & sweet goods with 1,366 launches, sweet biscuits/cookies with 695 launches, baking ingredients and mixes with 263 launches, and bread and bread products with 259 launches.

 

Retail environment and trends

Baked goods in South Korea

Baked goods retail sales increased at a CAGR of 1.0% from 2017 to 2021, reaching US$3,528.6 million. It will grow at a CAGR of 3.5% from 2022 to 2026, reaching US$4,088.8 million in 2026.

Frozen baked goods is the best performing category in 2021, with retail value sales increasing by CAGR of 38.2%. reaching US$42.5 million.

Retail sales of baked goods by category in South Korea, in US$ millions, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Baked Goods 3,383.0 3,526.6 1.0 3,565.2 4,088.8 3.5
Bread 1,299.9 1,327.6 0.5 1,347.8 1,537.5 3.3
Cakes 1,434.9 1,412.7 −0.4 1,414.3 1,639.6 3.8
Dessert Mixes 9.0 11.1 5.4 11.6 11.7 0.2
Frozen Baked Goods 42.5 38.2 46.7 54.4 3.9
Pastries 639.2 732.8 3.5 744.8 845.5 3.2

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

2021 Developments

Total volume sales of baked goods are set to continue to contract in 2021, following a similar performance in 2020. As the guidelines of wearing face masks in public places downgraded sales at external outlets such as subway stations. On the other hand, more and more local cafés and bakeries started online orders through food delivery applications such as Baemin, Yogiyo and Coupang Eats, to increase their customer reach under the restricted situation. The continued transition from unpackaged baked goods to packaged products is expected to further boost the packaged baked goods industry, on the back of overnight delivery services. Collaborations between famous artisanal brands and e-commerce grocery platforms such as Market Kurly and Coupang will be more diverse over the forecast period regardless of the COVID-19 situation.

Baked goods volume grew at a CAGR of 0.9% from 2017 to 2021, reaching 367.9 thousand tonnes in 2021. It is estimated that it will increase in CAGR of 1.5%, to attain 388.1 thousand tonnes in 2026.

Retail sales of baked goods by category in South Korea, in '000 tonnes, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Baked Goods 354.5 367.9 0.9 365.7 388.1 1.5
Bread 184.1 187.4 0.4 187.0 197.8 1.4
Cakes 97.3 94.8 −0.6 93.0 100.2 1.9
Dessert Mixes 0.6 0.8 7.5 0.8 0.7 −3.3
Frozen Baked Goods 2.7 34.9 2.9 3.1 1.7
Pastries 72.5 82.3 3.2 82.0 86.3 1.3

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

The top three companies that achieved largest retail of baked goods from 2017 to 2021 were SPC Samlip Co Ltd (US$262.2 million in 2021), followed by Orion Corp (US$135.8 million in 2021) and Lotte Confectionery Co Ltd (US$129.8 million in 2021). Of these top three companies, only SPC Co Ltd grew positively at a CAGR of 7.6% while Orion Corp and Lottle Confectionery o Ltd other declined in CAGR's by 0.1% and 2.4% respectively in 2021.

Baked goods company share in South Korea in US$ million 2017 to 2021
Company Name 2017 2018 2019 2020 2021 CAGR* % 2017-2021
SPC Samlip Co Ltd 196.2 206.7 213.8 240.3 262.6 7.6
Orion Corp 136.5 139.2 139.2 140.3 135.8 −0.1
Lotte Confectionery Co Ltd 142.8 134.7 137.9 134.9 129.8 −2.4
Haitai Confectionery & Foods Co Ltd 42.4 37.3 41.5 47.4 50.7 4.6
Crown Confectionery Co Ltd 14.9 15.8 13.6 11.9 10.6 −8.2
CJ Cheiljedang Corp 2.9 2.3 2.7 5.1 6.7 23.3
Samyang Corp 2.2 2.2 1.9 2.3 2.5 3.2
E-Mart Inc 1.5 1.1 1.0 0.8 0.8 −14.5
Homeplus Co Ltd 1.0 0.8 0.7 0.5 0.5 −15.9
Other Private Label 3.7 4.4 5.3 9.8 14.1 39.7
Others 2,839.0 2,954.3 3,065.9 2,965.7 2,912.3 0.6
Total 3,383.0 3,498.6 3,623.5 3,559.0 3,526.6 1.0

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

In terms of brands, the largest brand Samlip and 4th largest brand Oh Yes demonstrated a positive growth from 2017 to 2021 with CAGR's of 7.5% and 5.1% separately, reaching US$211 million and US$50.7 million respectively in 2021.

Baked goods brand share in South Korea in US$ million 2017 to 2021
Brand Name (GBO) 2017 2018 2019 2020 2021 CAGR* % 2017-2021
Samlip (SPC Group) 158.0 171.1 164.7 182.1 211.0 7.5
Orion (Orion Group) 96.0 91.8 82.1 88.3 92.7 −0.9
Lotte (Lotte Group) 88.7 87.8 81.8 80.2 83.8 −1.4
Oh Yes (Crown Confectionery Co Ltd) 41.6 37.5 39.5 44.5 50.7 5.1
Monshell (Lotte Group) 48.6 47.3 49.3 43.5 41.7 −3.8
Vicpie (Crown Confectionery Co Ltd) 14.6 15.9 13.0 11.2 10.6 −7.7
Ottu (Orion Group) 11.1 12.1 10.5 9.7 9.5 −3.8
Gourmet (CJ Corp) 0.7 2.7 4.5 N/C[1]
Market O (Orion Group) 12.0 10.0 7.3 4.4 3.9 −24.5
Saeng Saeng (Lotte Group) 2.5 3.6 N/C[1]
Qwon (Samyang Holdings Corp) 2.1 2.2 1.8 2.1 2.5 4.5
Beksul (CJ Corp) 2.9 2.3 1.9 2.1 2.2 −6.7
E-Mart (Private Label) 1.5 1.1 0.9 0.7 0.8 −14.5
Lotte Gateau (Lotte Group) 2.7 0.6 0.1 0.5 0.7 −28.6
Homeplus (Private Label) 1.0 0.8 0.6 0.4 0.5 −15.9
Artisanal 2,729.8 2,909.6 2,847.4 2,709.0 2,821.7 0.8
Other Private Label (Private Label) 3.6 4.4 5.0 9.2 14.1 40.7
Others 101.8 130.9 140.6 150.2 172.0 14.0
Total 3,315.9 3,525.5 3,447.4 3,343.5 3,526.6 1.6

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

1: Not Calculable

Retail subsector analysis

Overall positive impact on packaged bread

Overall growth is expected to be observed in packaged baked goods in 2021, although growth rates vary by category based on consumption occasions. Amidst the increase in home consumption during the prolonged pandemic, packaged leavened bread and packaged pastries were consumed as an easy and quick option for every meal, not only as a breakfast alternative. As more and more people started to choose packaged bread as the main meal at home, South Koreans' awareness of packaged bread has changed from being a snack to forming part of proper meals, and consequently the popularity of packaged bread increased during the pandemic. The barrier between packaged and unpackaged bread is likely to become increasingly blurred. Further despite the health growth of packaged bread due to the increased home consumption, unpackaged bread from in-store bakeries in sizeable distribution channels such as hypermarkets and mixed retailers was hit hard, as visits to such grocery retailers shifted to smaller outlets in the vicinity of residential areas.

Retail sales of packaged leavened bread increased at a CAGR of 10.5% from 2017 to 2021, reaching US$100.1 million in 2021. At the same time unpackaged leavened bread decreased slightly by a CAGR of −0.1%, to US$1,227.5 million. However it is estimated that the growth for both packaged leavened bread and unpackaged leavened bread all increased at a CAGR of 3.1% and 3.4% separately from 2022 to 2026.

Retail sales of bread by category in South Korea, in US$ millions, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Bread 1,299.9 1,327.6 0.5 1,347.8 1,537.5 3.3
Leavened Bread 1,299.9 1,327.6 0.5 1,347.8 1,537.5 3.3
Packaged Leavened Bread 67.1 100.1 10.5 109.2 123.3 3.1
Unpackaged Leavened Bread 1,232.8 1,227.5 −0.1 1,238.6 1,414.3 3.4

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

The struggles of baked goods are likely to continue in the later stages of the pandemic, expected until 2022, due to the persistence of similar sales patterns in the category - with growing demand for packaged bread and declining demand for unpackaged bread. However, as lifestyles return to normality, baked goods is forecast to recover its growth trajectory in the post-pandemic world, with unpackaged bread returning to its pre-pandemic level of value sales, although the return to the pre-pandemic level of volume sales is expected to take longer. Packaged bread will also continue to grow over the forecast period, although the growth rates are set to slow in both retail volume and current value terms.

In terms of retail sales volume, the packaged leavened bread grew by a CAGR of 8.1% from 2017 to 2021, reaching 20.5 thousand tonnes in 2021. Conversely, unpackaged leavened bread decreased at a CAGR of −0.3% from 2017 to 2021, down to 166.9 thousand tonnes. It is projected that both packaged leavened bread and unpackaged leavened bread will all grow at a CAGR's of 1.2% and 1.5% respectivel from 2022 to 2026.

Retail sales of bread by category in South Korea, in '000 tonnes, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Bread 184.1 187.4 0.4 187.0 197.8 1.4
Leavened Bread 184.1 187.4 0.4 187.0 197.8 1.4
Packaged Leavened Bread 15.0 20.5 8.1 21.9 23.0 1.2
Unpackaged Leavened Bread 169.1 166.9 −0.3 165.0 174.8 1.5

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

SPC Samlip Co Ltd and Lotte Cofectionery Co Ltd were the largest bread companies in South Korea with retail sales attaining CAGR's of 11.4% and 11% from 2017 to 2021 respectively, with both companies to increase retail sales to US$65.4 million and US$18.2 million respectively in 2021.

Bread company share in US$ million 2017 to 2021
Company Name 2017 2018 2019 2020 2021 CAGR* % 2022-2026
SPC Samlip Co Ltd 42.5 45.4 42.1 52.0 65.4 11.4
Lotte Confectionery Co Ltd 12.0 13.9 15.4 16.4 18.2 11.0
E-Mart Inc 1.1 0.8 0.7 0.5 0.6 −14.1
Homeplus Co Ltd 0.8 0.6 0.5 0.3 0.5 −11.1
Artisanal 1,208.3 1,270.8 1,229.8 1,174.3 1,227.5 0.4
Other Private Label 0.6 0.4 1.5 2.9 5.0 69.9
Others 8.6 7.8 7.7 8.8 10.4 4.9
Total 1,274.1 1,339.7 1,297.9 1,255.3 1,327.6 1.0

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

The self-baking categories are expected to continue to increase with growth in both packaged and unpackaged baked goods.

Packaged cakes from manufacturers such as Lotte Confectionery, however struggled in 2021 as they were often displayed in the bread or desserts section and regarded as snacks. In addition the consumers' move to competing products, such as savoury snacks, for general home consumption and as a side snack for alcoholic beverages during the pandemic further affected sales of packaged cakes.

Both packaged cakes and unpacked cakes declined at a CAGR of −0.5% and −0.4% respectively. But both are predicted to grow at CAGR of 2.5% and 4.2% respectively.

Retail sales of cakes by category in South Korea, in US$ millions, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Cakes 1,434.9 1,412.7 −0.4 1,414.3 1,639.6 3.8
Packaged Cakes 384.5 377.4 −0.5 382.4 422.6 2.5
Unpackaged Cakes 1,050.4 1,035.3 −0.4 1,032.0 1,217.0 4.2

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

Same wise, in terms of volume, both packaged cakes and unpackaged cakes declined at a CAGR of −0.83% and −0.59% respectively.

Retail sales of cakes by category in South Korea, in '000 tonnes, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Cakes 97.3 94.8 −0.65 93.0 100.2 1.9
Packaged Cakes 24.3 23.5 −0.83 23.3 23.9 0.6
Unpackaged Cakes 73.0 71.3 −0.59 69.7 76.3 2.3

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

SPC Samlip Co Ltd experienced the largest growth in a CAGR of 9.7% from 2017 to 2021, followed by Haitai Confectionery & Foods Co Ltd which grew at a CAGR of 5.1% from 2017 to 2021.

Cake company share in South Korea in US$ million 2017 to 2021
Company Name 2017 2018 2019 2020 2021 CAGR* % 2017-2021
Orion Corp 133.8 140.2 132.4 131.8 135.8 0.4
Lotte Confectionery Co Ltd 122.9 116.5 110.3 102.1 101.5 −4.7
SPC Samlip Co Ltd 37.8 40.5 40.8 46.2 54.7 9.7
Haitai Confectionery & Foods Co Ltd 41.6 37.5 39.5 44.5 50.7 5.1
Crown Confectionery Co Ltd 14.6 15.9 13.0 11.2 10.6 −7.7
E-Mart Inc 0.3 0.3 0.3 0.2 0.2 −9.6
Homeplus Co Ltd 0.2 0.2 0.1 0.1 0.1 −15.9
Artisanal 1,029.5 1,090.2 1,063.3 1,002.7 1,035.3 0.1
Other Private Label 1.9 2.6 2.0 1.4 1.1 −12.8
Others 23.9 21.3 16.5 18.9 22.7 −1.3
Total 1,406.5 1,465.3 1,418.1 1,359.0 1,412.7 0.1

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

The brand Oh Yes demonstrated a positive growth at an increase in CAGR of 5.1% from 2017 to 2021. However, the remaining brands declined in growth from 2017 to 2021.

Cake brand share in South Korea in US$ million 2017 to 2021
Brand Name 2017 2018 2019 2020 2021 CAGR* % 2017-2021
Orion (Orion Group) 96.0 91.8 82.1 88.3 92.7 −0.9
Lotte (Lotte Group) 71.6 68.6 60.8 58.1 59.1 −4.7
Oh Yes (Crown Confectionery Co Ltd) 41.6 37.5 39.5 44.5 50.7 5.1
Monshell (Lotte Group) 48.6 47.3 49.3 43.5 41.7 −3.8
Vicpie (Crown Confectionery Co Ltd) 14.6 15.9 13.0 11.2 10.6 −7.7
Ottu (Orion Group) 11.1 12.1 10.5 9.7 9.5 −3.8
Market O (Orion Group) 12.0 10.0 7.3 4.4 3.9 −24.5
Samlip (SPC Group) 3.5 3.3 2.2 2.5 3.1 −3.0
Lotte Gateau (Lotte Group) 2.7 0.6 0.1 0.5 0.7 −28.6
E-Mart (Private Label) 0.3 0.3 0.3 0.2 0.2 −9.6
Homeplus (Private Label) 0.2 0.2 0.1 0.1 0.1 −15.9
Artisanal 1,029.5 1,090.2 1,063.3 1,002.7 1,035.3 0.1
Other Private Label (Private Label) 1.9 2.6 2.0 1.4 1.1 −12.8
Others 72.8 84.9 87.6 91.9 104.1 9.4
Total 1,406.5 1,465.3 1,418.1 1,359.0 1,412.7 0.1

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

Dessert mixes as a category, are expected to experience a decline in volume due to increasing competition.

While COVID-19 drove significant growth in dessert mixes under the trends towards home activity and home consumption, the popularity of such products is likely to drop in the market once lifestyles and consumption return to outside the home, which is expected around 2023. Although further dynamic decreases are not expected towards the end of the forecast period, sales are set to stagnate under the mounting competition with other categories, such as frozen desserts. Growth in the home baking (from scratch) culture amongst young females is also threatening the advantage of dessert mixes, which simplify the baking process. In addition, the better quality and a variety of product ranges provided by frozen goods will be more appealing to consumers. For this reason, dessert mixes is expected to witness a long period of stagnation over the forecast period.

The pandemic has continued to promote growth in frozen baked goods and dessert mixes in 2021, following already strong performances in 2020. The increased time spent at home, alongside restrictions on visiting cafés or bakeries, naturally spurred more and more consumers to enjoy making such products at home. While some chose to make them totally from scratch, consumers who were not familiar with home baking chose half-pre-made products such as frozen baked goods and dessert mixes, which ease the complicated baking process for South Korean consumers.

In terms of retail sales value, dessert mixes grew at a CAGR of 5.4% from 2017 to 2021, reaching US$11.1 million in 2021.

Retail sales of dessert mixes by category in South Korea, in US$ millions, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Dessert Mixes 9.0 11.1 5.4 11.6 11.6 0.2

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

In terms of retail sales volume, dessert mixes also increased and grew at a CAGR of 7.5% from 2017 to 2021, reaching 0.8 thousand tonnes in 2021.

Retail sales of dessert mixes by category in South Korea, in '000 tonnes, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Dessert Mixes 0.6 0.8 7.5 0.8 0.7 −3.3

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

The growing penetration of small home appliances in Korean households also continued to play a key role in boosting sales of frozen baked goods in 2021. Air fryers have been widely used to bake frozen scones, pastries, pies and croissants from frozen dough. Another recent craze of "croffle" - a compound word made up of croissant and waffle, which uses a waffle maker and frozen croissant dough, also contributed to expanding the home-baking culture during the pandemic. Meanwhile, dessert mixes benefited from parents using baking as an at-home activity with their children during the prolonged pandemic period. Players in dessert mixes have also attempted to jump on the craze of air fryers, with Samyang Corp releasing American soft biscuit mixes for air fryers. Ottogi further improved the convenience of dessert mixes by launching a rice cupcake that can be baked in a microwave by adding an egg. However, the growth of dessert mixes is expected to be much less significant in value terms in 2021, due to new convenient baking formats such as frozen baked goods.

Samyang Holdings Corp was the largest dessert mix company with retail sales valued at US$2.5 million in 2021, representing an increase in CAGR of 4.5% from US$2.1 million in 2017.

Dessert mixes company share In South Korea in US$ million 2017 to 2021
Company Name 2017 2018 2019 2020 2021 CAGR* % 2017-2021
Samyang Holdings Corp 2.1 2.2 1.8 2.1 2.5 4.5
CJ Corp 2.9 2.3 1.9 2.1 2.2 −6.7
Others 3.8 5.8 4.6 5.4 6.3 13.5
Total 8.8 10.3 8.3 9.7 11.1 6.0

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

Although further dynamic decreases are not expected towards the end of the forecast period, sales are set to stagnate under the mounting competition with other categories, such as frozen baked goods.

Retail sales of the frozen baked goods category increased a CAGR of 38.2% from 2018 to 2021, reaching US$42.5 million in 2021.

Retail sales of frozen baked goods by category in South Korea, in US$ millions, 2021 fixed exchange rate, historic and forecast
Category 2017 2018 2021 CAGR* % 2018-2021 2022 2026 CAGR* % 2022-2026
Frozen Baked Goods 16.1 42.5 38.2 46.7 54.4 3.9

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

In terms of retail sales volume, frozen baked goods grew at a CAGR of 34.9% from 2018 to 2021, reaching 2.7 thousand tonnes in 2021.

Retail sales of frozen baked goods by category in South Korea, in '000 tonnes, 2021 fixed exchange rate, historic and forecast
Category 2017 2018 2021 CAGR* % 2018-2021 2022 2026 CAGR* % 2022-2026
Frozen Baked Goods 1.1 2.7 34.9 2.9 3.1 1.7

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

The frozen baked goods company CJ Corp experienced the largest increase in CAGR of 153.5%, reaching US$4.5 million in 2021 from US$0.7 million in 2019.

Frozen baked company share in South Korea in US$ million 2017 to 2021
Company Name 2017 2018 2019 2020 2021 *CAGR % 2019-2021
CJ Corp 0.7 2.7 4.5 153.5
Lotte Group 2.5 3.6 N/C[1]
Private Label 2.4 3.9 N/C[1]
Others 24.7 26.6 30.5 11.1
Total 25.4 34.2 42.5 29.4

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

1: Not Calculable

The packaged pastries category experienced the largest increase in a CAGR of 6.1% while unpackaged pastries at a CAGR of 2.7% from 2017 to 2021, reaching US$173.8 million and US$558.9 million respectively in 2021.

Retail sales of pastries by category in South Korea, in US$ millions, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Pastries 639.2 732.8 3.5 744.8 845.5 3.2
Packaged Pastries 137.4 173.8 6.1 180.9 204.1 3.1
Unpackaged Pastries 501.8 558.9 2.7 564.0 641.4 3.3

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

In terms of retail sales volume, packaged pastries grew at a CAGR of 5.9%, while the unpackaged pastries increased in a CAGR of 2.4%, reaching 20.6 thousand tonnes and 61.6 thousand tonnes respectively in 2021.

Retail sales of pastries by category in South Korea, in '000 tonnes, 2021 fixed exchange rate, historic and forecast
Category 2017 2021 CAGR* % 2017-2021 2022 2026 CAGR* % 2022-2026
Pastries 72.5 82.3 3.2 82.0 86.3 −1.3
Packaged Pastries 16.4 20.6 5.9 21.0 22.0 −1.2
Unpackaged Pastries 56.1 61.6 2.4 61.0 64.3 −1.3

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

BGF Retail Co Ltd experienced the largest increase in a CAGR of 61.2% from 2017 to 2021 despite its lower retail sales of US$2.7 million, when compared with retail values attained by SPC Samlip Co Ltd, (US$142.5 million) in 2021..

Pastries company share in South Korea in US$ million 2017 to 2021
Company Name 2017 2018 2019 2020 2021 CAGR* % 2017-2021
SPC Samlip Co Ltd 111.9 122.4 120.4 127.5 142.5 6.2
Lotte Confectionery Co Ltd 5.0 5.3 5.5 5.8 6.5 6.8
BGF Retail Co Ltd 0.4 0.6 0.9 1.5 2.7 61.2
Artisanal 491.9 548.7 554.3 532.0 558.9 3.2
Other Private Label 1.1 1.4 1.5 2.5 4.1 38.9
Others 16.3 15.7 15.1 16.0 18.0 2.5
Total 626.5 694.0 697.7 685.4 732.8 4.0

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

Distribution Channel

Mounting competition in baked goods across distribution channels

Another war in baked goods seems to be getting underway in convenience stores. In general, private label baked goods in convenience stores have long been loved by consumers thanks to their reasonable price, rather than the quality and taste offered. However, convenience stores are seeking an opportunity to change the image of the bread sold in convenience stores to premium, by launching premium lines of baked goods on the back of the growth potential for packaged baked goods over the forecast period. CU, one of the biggest convenience stores franchises, introduced the premium bakery line Pain de Franc, which uses ingredients from France, literally from the name, including flour, butter and whipped cream. Furthermore, the company tried to enhance the quality of its ingredients by using baguette dough directly imported from France. CU further developed its premium image in a partnership with premium jam brand St Dalfour by attaching a mini size of fruit jams with a block of bread. Other convenience stores franchises, GS25 and 7-Eleven, also launched their premium bakery lines BREADIQUE and Breadaum, respectively. These premium lines will drive overall sales of baked goods, whilst on the other hand, such growth will threaten the original leading players in packaged baked goods in convenience stores, such as SPC Samlip and Lotte Confectionery. There is another opinion that the premiumisation trend in private label in convenience stores may threaten actual bakery franchise outlets, thanks to the advantages of convenience stores in terms of accessibility.

The majority of South Korea's bakery products are distributed through store-based retailing versus non-store retailing during the historic period. Grocery retailers distribute most of the products in South Korea representing a market share of 91.7% while the remainder of the bakery products are distributed through non-grocery specialists (mixed retailer) at 1% and non-store retailing (e-commerce), 7.3% in 2021.

Modern grocery retailer represents the largest distribution channel 56.9%. Traditional grocery retailers as a sub-outlet type of grocery retailers representing a 34.8% market share in 2021. Of those traditional grocery retailers, food/drink/tobacco specialists represent the largest (30% market share) in 2021. Conversely, non-store retailing (e-commerce) represents the remaining market share 7.3% in 2021, and of note, experienced the largest increase in CAGR (40.3%).

Baked Goods Distribution Channel in South Korea 2017 to 2021
Outlet type 2017 2018 2019 2020 2021 CAGR* % 2017-2021 Share % 2021
Store-Based Retailing 3,249.5 3,437.4 3,344.8 3,143.0 3,269.2 0.2 92.7
Grocery Retailers 3,237.2 3,422.2 3,326.5 3,116.2 3,233.9 0.0 91.7
Modern Grocery Retailers 1,945.9 2,035.7 1,977.2 1,874.1 2,005.9 0.8 56.9
Convenience Stores 57.5 64.2 66.2 123.7 144.6 25.9 4.1
Forecourt Retailers 4.4 5.0 5.2 5.1 4.9 2.7 0.1
Hypermarkets 1,435.9 1,507.5 1,465.5 1,277.2 1,345.0 −1.6 38.1
Supermarkets 448.1 459.0 440.3 468.1 511.4 3.4 14.5
Traditional Grocery Retailers 1,291.3 1,386.6 1,349.3 1,242.1 1,228.0 −1.2 34.8
Food/drink/tobacco specialists 1,128.5 1,233.9 1,217.2 1,093.3 1,058.0 −1.6 30.0
Independent Small Grocers 133.2 127.6 110.7 130.4 151.6 3.3 4.3
Other Grocery Retailers 29.6 25.0 21.4 18.4 18.3 11.3 0.5
Non-Grocery Specialists
Mixed Retailers 12.3 15.2 18.3 26.7 35.3 30.2 1.0
Non-Store Retailing 66.4 88.1 102.7 200.6 257.4 40.3 7.3
E-Commerce 66.4 88.1 102.7 200.6 257.4 40.3 7.3
Total 3,315.9 3,525.5 3,447.5 3,343.6 3,526.6 1.6 100.0

Source: Euromonitor International, 2022

*CAGR: Compound Annual Growth

New product launch analysis

According to Mintel's Global New Products Database (GNPD), 2,724 bakery products were launched in South Korea from 2017 to 2021. Top sub-categories of new bakery products included cakes, pastries & sweet goods with 1,366 launches, sweet biscuits/cookies with 695 launches, baking ingredients and mixes with 263 launches, and bread and bread products with 259 launches. Flexible was the most common package type, with 2,186 launches, while flexible stand-up pouch followed with 160. New variety/range extension was the largest new launch type, with 1,173 launches, while new packaging was second with 1,026 launches and new products was third with 413 launches.

New Product Launches of Bakery Products in South Korea, 2017 to 2021
Product attributes Yearly launch counts Total
2017 2018 2019 2020 2021
Yearly product launches 552 521 507 567 577 2,724
Top five sub-categories
Cakes, Pastries and Sweet Goods 278 265 259 301 263 1,366
Sweet Biscuits/Cookies 177 126 125 123 144 695
Baking Ingredients & Mixes 40 77 46 47 51 263
Bread and Bread Products 29 39 50 66 84 259
Savoury Biscuits/Crackers 21 20 17 14 20 92
Top five claims
Premium 66 61 28 51 45 251
Microwaveable 35 34 39 65 64 237
Seasonal 33 58 40 29 25 185
Social Media 18 39 51 39 35 182
Ease of Use 22 32 27 49 43 173
Imported status
Imported 52 50 52 46 43 243
Not imported 5 3 4 1 4 17
Top packaged types
Flexible 460 405 416 443 462 2,186
Flexible stand-up pouch 17 35 31 34 43 160
Clam-pack 22 14 13 28 19 96
Carton 22 14 13 28 19 96
Tub 18 11 16 19 7 71
Top launch types
New Variety/Range Extension 269 210 180 258 256 1,173
New Packaging 166 170 197 239 254 1,026
New Product 94 113 93 57 56 413
Relaunch 21 25 29 13 11 99
New Formulation 2 2 8 0 0 13
Top five flavours (including blend)
Sweet 107 90 121 110 87 515
Fruit & Vegetable 114 87 94 74 75 444
Dairy 44 49 50 70 65 278
Seeds & Nuts 41 45 36 37 30 189
Beverage 21 12 11 16 20 80
Top five ingredients
White Sugar (Food) 508 448 439 462 456 2,313
Wheat Flour (Food) 478 451 410 448 421 2,206
Salt (Food) 494 397 385 430 441 2,127
Eggs (Food) 253 248 248 263 265 1,277
Food Acids 184 214 235 222 234 1,089
Top Five Companies
SPC Samlip 77 78 63 97 59 374
Lotte Confectionery 67 58 69 58 33 285
Paris Croissant 54 81 34 22 13 204
Emart 56 15 31 32 9 143
Orion Confectionery 15 12 10 10 13 60
Source: Mintel Global New Products Database, 2022

Examples of new product launches

Black Sesame Scone

Source: Mintel Global New Products Database, 2022
Record ID 9234494
Manufacturer Zero Bakery
Brand Zero Bakery
Category Bakery
Sub-category Cakes, pastries and sweet goods
Store name www.hellonature.net
Store type Internet / mail order
Date published December 2021
Product source Shopper
Launch type New variety / range extension
Price in local currency KRW3,360.00
Price in US dollars 2.84
Price in Euros 2.51
 

Zero Bakery Black Sesame Scone is made with 11% black sesame powder. This product has 234 calories and retails in a 60 gram pack bearing the HACCP logo.

Soft Bagel

Source: Mintel Global New Products Database, 2022
Record ID 8999252
Company Shinsegae Food
Manufacturer Hana Food
Distributor Shinsegae Food
Brand Milk and Honey
Category Bakery
Sub-category Bread and bread products
Market South Korea
Store name www.kurly.com
Store type Internet / mail order
Date published September 2021
Product source Shopper
Launch type New product
Price in local currency KRW1,300.00
Price in US dollars 1.13
Price in Euros 0.95
Bar code 8809811820836
 

Milk and Honey Soft Bagel is now available. This product retails in a 100 gram pack.

Toast Bread

Source: Mintel Global New Products Database, 2022
Record ID 8708681
Company Shany
Manufacturer Shany
Distributor SPC Samlip
Brand Migak Bakery Stone Mill
Category Bakery
Sub-category Bread and bread products
Market South Korea
Store name www.ssg.com
Store type Internet / mail order
Date published May 2021
Product source Shopper
Launch type New product
Price in local currency KRW2,480.00
Price in US dollars 2.22
Price in Euros 1.85
Bar code 8801068393866
 

Migak Bakery Stone Mill Toast Bread is now available. It made with stone mill wholemeal, sea salt, baked using tangzhong recipe and contains dietary fibre and protein. This product features a soft texture and retails in a 420 gram pack bearing a QR code.

Mini Croissant

Source: Mintel Global New Products Database, 2022
Record ID 8497875
Company Paris Croissant
Manufacturer SPL
Brand First Class Kitchen
Category Bakery
Sub-category Cakes, pastries and sweet goods
Market South Korea
Store name Paris Baguette
Store type Specialist retailer
Store address Seoul 05222
Date published February 2021
Product source Shopper
Launch type New variety / range extension
Price in local currency KRW6,900.00
Price in US dollars 6.18
Price in Euros 5.13 
 

First Class Kitchen Mini Croissant has been added to the range. It is described as an authentic French style mini croissant with layers. This premium product is said to be made using Paris Baguette's know-how to offer a formal dining that can be conveniently enjoyed anytime, and retails in a 160 gram pack containing eight units.

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Resources

  • Global Trade Tracker, 2022
  • Mintel Global New Products Database, 2022

Sector Trend Analysis – Bakery products in South Korea
Global Analysis Report

Prepared by: Hongli Wang, Senior Market Analyst

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