Koreans’ spending on coffee and tea fell for the first time in more than five years.
According to statistics held by the financial investment industry, the average household’s consumption of coffee and tea products stood at 8,500 won in the first quarter of 2013, down 1.4 percent from 8,624 won over the same period last year.
This marked the first fall since the figure reported a 1.3 percent drop in the fourth quarter of 2007.
From 2008 to 2012, household spending on coffee and tea posted 10.5 percent growth on average.
Analysts say the drop in 2013 is attributable to consumers’ recent belt-tightening amid worries of a longer-than-expected economic slowdown.
Households’ overall monthly spending recorded 2.54 million won between January and March 2013, down 1 percent from the same period in 2012.
However, coffee makers said the “coffee mix” business was still attractive because it showed high operating profit to sales ratios of nearly 20 percent, when other items rarely saw operating profits of more than 5 percent of revenue.
Some instant coffee mix producers are aiming for the global stage amid heated competition in the local market.
Korea’s typical instant coffee product is a three-in-one coffee mix sachet containing powdered coffee, powdered cream and sugar for a single serving.
Namyang Dairy has initiated moves abroad, called “coffee reexports,” in countries such as China, the United States and Australia.
Dongsuh Food, which controls around 80 percent of Korea’s coffee mix market, and Nestle Korea, with a market share of 15 percent, are closely monitoring the recent steps of Namyang, which entered the coffee mix market in 2010.
By Kim Yon-se (
kys@heraldcorp.com)
