Required Report - public distribution

**Date:** 2/27/2004

**GAIN Report Number:** KS4011

KS4011

**Korea, Republic of**

**Food Processing Ingredients Sector**

**Food Processing Ingredients Sector**

**2004**

**Approved by:**

![](media/image1.wmf)Marcus E. Lower, ATO Director

Agriculture Trade Office, Seoul

**Prepared by:**

Seh Won KIM, Ag. Marketing Specialist

**Report Highlights:**

Korea is a major importer of raw materials and ingredients for food
processing. Over 70 percent of food products in Korea are imported. The
size of the Korean food processing industry is estimated at \$35.7
billion for 2002, up 8 percent from \$33 billion in 2001. U.S. raw
materials and ingredients for use in food processing have a strong
opportunity in Korea.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Seoul ATO \[KS2\]

\[KS\]

Table of Contents

[**SECTION I. Market Summary 3**](#section-i.-market-summary)

[SECTION II. ROAD MAP FOR MARKET ENTRY
4](#section-ii.-road-map-for-market-entry)

[A. ENTRY STRATEGY 4](#entry-strategy)

[B. MARKET STRUCTURE 5](#b.-market-structure)

[C. COMPANY PROFILES 6](#c.-company-profiles)

[D. SECTOR TRENDS 7](#d.-sector-trends)

[Food Processing Sector 8](#food-processing-sector)

[Food Ingredient Processing 9](#food-ingredient-processing)

[Confectionary and Bakery 9](#confectionary-and-bakery)

[Non-alcoholic Beverages Processing
10](#non-alcoholic-beverages-processing)

[Dairy Processing 10](#dairy-processing)

[Meat Processing 10](#meat-processing)

[Seafood Processing 10](#seafood-processing)

[SECTION III. COMPETITION 11](#section-iii.-competition)

[SECTION IV. BEST PROSPECTS 14](#section-iv.-best-prospects)

[SECTION V. KEY CONTACTS AND FURTHER INFORMATION
15](#section-v.-key-contacts-and-further-information)

# SECTION I. Market Summary

The gross output of the Korean food processing industry, including
beverages and seafood, is estimated at \$35.7 billion (42.9 trillion
Won, \$1 = 1,200 Won) for 2002, up 8 percent from \$33 billion in 2001.
The sector is composed of about 7,600 enterprises and about 183,000
employees. Sectoral growth of 3-5 percent annually is expected for the
foreseeable future.

The total imports of agricultural, food, fishery and forestry products
in 2003 are estimated at \$13.2 billion from the world. With \$3.5
billion in sales, the U.S. accounted for 26 percent of Korean imports.
Due to the lack of arable farmland, high production costs and growing
food requirements, Korea has been a major importer of basic foodstuffs
for further processing. Korea imports about 70 percent of total
agricultural product needs. The U.S., China, European Union (EU) and
Australia are the major agricultural exporters to Korea. With a
territory about the size of the state of Indiana and population
estimated at 48 million, Korea was the 5^th^ largest market for U.S.
agriculture in 2003.

**Output of Food Processing Industry by Sector in 2002**

![](media/image2.wmf)

Except for rice, which has a large surplus, Korea imports a broad range
of basic, intermediate and semi processed agricultural products. Corn,
soybeans, wheat, essential oils, frozen concentrated orange juice,
turkey meat, duck meat, almonds, walnuts, powdered milk, whey powder and
beef tallow, seafood, processed fruits and vegetables, coffee, potato
products, vegetable oils and cocoa products exemplify the raw materials
and ingredients imported into Korea for use in food processing. U.S.
suppliers have a strong opportunity to export inputs for use in food
processing in Korea.

The United States is the largest supplier of agricultural, food and
fishery products to Korea, with a 27.9 percent market share in 2002,
followed by China with 19.7 percent, the EU with 11.2 percent and
Australia with 8.9 percent. These four countries account for about 68
percent of the total Korean agricultural, food and fishery product
imports in 2002.

Table 1. Imports of Agricultural, Food and Seafood in Korea: 2002
(\$million)

  ------------------ ----------- ---------- ------- ----------- ------- -------- ------- --------------- ------- ------------ -------
  **Sector**         **Total**   **U.S.**           **China**           **EU**           **Australia**           **Others**   

  ** **              Value       Value      Share   Value       Share   Value    Share   Value           Share   Value        Share

  **Bulk**           2,749       772        28.1    844         30.7    43       1.5     464             16.9    626          22.8

  **Intermediate**   3,142       842        26.8    312         9.9     382      12.1    233             7.4     1,373        43.7

  **Consumer**       3,474       1,346      38.8    337         9.7     771      20.5    301             8.7     719          20.7

  **Seafood**        1,820       165        9.0     711         39.1    55       3.0     1.4             0.1     888          48.8

  **Total**          11,185      3,125      27.9    2,204       19.7    1,251    11.2    999.4           8.9     3,606        32.2
  ------------------ ----------- ---------- ------- ----------- ------- -------- ------- --------------- ------- ------------ -------

Note: Forest products excluded

Source: Korea Trade Information Service, compiled by ATO Seoul

Table 2. Advantages and Challenges for U.S. Agricultural, Food and
Fishery Products.

  ----------------------------------- -----------------------------------
  **Advantages**                      **Challenges**

  Diminishing resistance to imported  Tariffs of food ingredients are
  foods                               generally higher than those of high
                                      value products

  Confidence in U.S. foods            U.S. prices are generally higher
                                      than those of competitors\' food
                                      ingredients

  Almost all agricultural and food    Occasional sanitary/phytosanitary
  products are importable             issues cause suspension of imports

  Equal or superior quality to        Food safety concerns and biotech
  domestic and competitors\' products issues

  Increasing affluence of Koreans     Frequent changes in food
                                      regulations

  Young generation is becoming more   Onerous inspection/Customs
  Westernized                         clearance procedures

  Weakening dollar vis-à-vis the Won  High test fees for chemical
  makes U.S. products more price      residues in grains
  competitive                         
  ----------------------------------- -----------------------------------

# 

# SECTION II. ROAD MAP FOR MARKET ENTRY

## ENTRY STRATEGY

U.S. agricultural, food and fishery products are generally considered by
Koreans as high quality but the prices are generally higher than those
of U.S. competitors. When considering the Korean market, exporters
should conduct preliminary research to determine if the market is
appropriate for the product. Possible sources of market information
include Korean importers, U.S. state departments of agriculture, the
U.S. Agricultural Trade Office (ATO) website, and the U.S. Department of
Commerce. Lists of Korean importers, by product, can be obtained from
the U.S. Agricultural Trade Office, or through the U.S. Department of
Agriculture (USDA)/Foreign Agricultural Service in Washington, D.C. The
next step might include sending catalogues, brochures, product samples,
and price lists to prospective importers as a way of introducing the
company and products.

Once contact is established, it is advisable to visit the importer(s) in
person, which will increase the seller\'s credibility with the Korean
importer and give an opportunity to see the Korean market first hand. In
Korea the clichés about \"seeing is believing\" and \"one visit is worth
a 1,000 faxes\" are especially true. There is no substitute for
face-to-face meetings. The supplier or exporter should bring samples as
well as product and company brochures, price lists, shipping dates,
supply data, and any other information needed for negotiating a
contract. While information in English is acceptable, having it in
Korean is helpful and demonstrates serious interest in the market. A
general overview of the firm in Korean is a good starting point.

Another way of finding potential importers is to participate in local
food shows to showcase your products to a larger audience. Many Korean
importers attending shows are seeking to

establish reliable long-term trading relationships. Show participation
enhances initial contacts with importers, agents, wholesalers,
distributors, retailers and others in the food and beverage industry. A
list of Korean trade shows is available from the ATO. See Section V for
contact information.

American companies should be sensitive to the uniqueness of the Korean
market. An approach or a product that was successful in another market
does not mean it will be applicable to Korea. It will be necessary to
review the product design, packaging and market approach for the Korean
situation, requirements and tastes. A well-developed relationship with a
Korean importer is an asset when determining how to best market a
product.

For exporters of high-value niche market products, the Mid-America
International Agri-Trade Council (MIATCO) offers a Distributor
Development Service (DDS), which provides a series of cost-effective
services designed to assist U.S. suppliers with specific information on
whether and how to approach the Korean market. MIATCO will also assist
U.S. food companies in establishing and solidifying contacts in the
Korean import, distribution, retail, food service, or food processing
sectors through trade servicing and in-market assistance. See Section V
for MIATCO\'s contact information.

Finally, in the Korean market, never take anything for granted. Be ready
for the unexpected. Just because the first container cleared customs,
does not mean the second one will. Be open for new information,
attentive and patient.

## B. MARKET STRUCTURE

The chart below gives an overview of the usual distribution channel for
imported food ingredients from U.S. exporters to Korean food processors.

+-----------+---+----------+---+----------+---+----------+---+---------+
| US        |   | I        |   | Dis      |   | Food     | \ | Retail  |
| exporter  |   | mporter/ |   | tributor |   | p        | - |         |
|           |   |          |   |          |   | rocessor | - |         |
|           |   | agent    |   |          |   |          |   |         |
+-----------+---+----------+---+----------+---+----------+---+---------+
|           | \ |          | \ |          | \ |          |   |         |
|           | - |          | - |          | - |          |   |         |
|           | - |          | - |          | - |          |   |         |
+-----------+---+----------+---+----------+---+----------+---+---------+
|           |   |          |   |          |   |          | \ | HRI     |
|           |   |          |   |          |   |          | - |         |
|           |   |          |   |          |   |          | - |         |
+-----------+---+----------+---+----------+---+----------+---+---------+

Large food processing companies generally prefer to buy food ingredients
directly from overseas suppliers when the quantities are large. These
large companies often prefer to purchase from local importers, agents or
distributors when the quantities are small.

## 

## C. COMPANY PROFILES

Below is a table with profiles of the major Korean food manufacturing
companies. Information includes company sales, the main end-use
channels, production location, procurement channels and contacts.

Table 3. Company Profiles

+------------+-------+------+-----------+-----------+----------------+
| *          | **    | *    | **Plant   | **Proc    | **Contacts**   |
| *Company** | Sales | *End | L         | urement** |                |
|            | in    | -use | ocation** |           |                |
| **Product  | 2     | C    |           | **C       |                |
| types**    | 002** | hann | **(No. of | hannels** |                |
|            |       | el** | Plants)** |           |                |
|            | **(\$ |      |           |           |                |
|            | Milli |      |           |           |                |
|            | on)** |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Nong Shim  | 978   | Re   | Korea (5) | Direct    | \*P.           |
| (Instant   |       | tail |           | and       | 02-820-7114    |
| noodles,   |       | and  | China (2) |           |                |
| snacks)    |       | HRI  |           | other     | \*F.           |
|            |       |      |           | importers | 02-820-7024    |
|            |       |      |           |           |                |
|            |       |      |           |           | \*W.           |
|            |       |      |           |           | nongshim.co.kr |
+------------+-------+------+-----------+-----------+----------------+
| Lotte      | 969   | Re   | Korea (2) | Direct    | P.             |
| Chilsung   |       | tail |           | and       | 02-3479-9114   |
| (Soft      |       | and  |           |           |                |
| drinks,    |       | HRI  |           | other     | F. 02-535-8619 |
| juices,    |       |      |           | importers |                |
| milk)      |       |      |           |           | W.             |
|            |       |      |           |           | lotte          |
|            |       |      |           |           | chilsung.co.kr |
+------------+-------+------+-----------+-----------+----------------+
| CJ         | 693   | Re   | Korea(10) | Direct    | P. 726-8114    |
|            |       | tail |           | and       |                |
| (sugar,    |       | and  | Indonesia |           | F. 02-726-8049 |
| spices,    |       | HRI  | (3)       | other     |                |
| s          |       |      |           | importers | W.             |
| easonings, |       |      | Ph        |           | c              |
| wheat      |       |      | ilippines |           | heiljedang.com |
| flour,     |       |      | (1)       |           |                |
| edible     |       |      |           |           |                |
| oils, meat |       |      | Australia |           |                |
| p          |       |      | (1)       |           |                |
| rocessing) |       |      |           |           |                |
|            |       |      | Vietnam   |           |                |
|            |       |      | (1)       |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Lotte      | 581   | Re   | Korea (4) | Direct    | P. 02-670-6114 |
| Con        |       | tail |           | and       |                |
| fectionery |       | and  | U.S. (1)  |           | F.             |
| (Conf      |       | HRI  |           | other     | 02-6672-6600   |
| ectionery, |       |      | Vietnam   | importers |                |
| chewing    |       |      | (1)       |           | W.             |
| gum, ice   |       |      |           |           | l              |
| cream)     |       |      | Russia    |           | otteconf.co.kr |
|            |       |      | (1)       |           |                |
|            |       |      |           |           |                |
|            |       |      | China (1) |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Dong Suh   | 484   | Re   | Korea (6) | Direct    | P.             |
| Foods      |       | tail |           | and       | 02-3271-0114   |
| (Coffee,   |       | and  |           |           |                |
| tea,       |       | HRI  |           | other     | F. 02-714-9414 |
| honey,     |       |      |           | importers |                |
| snacks)    |       |      |           |           | W.             |
|            |       |      |           |           | dongsuh.co.kr  |
+------------+-------+------+-----------+-----------+----------------+
| Lotte Ham  | 474   | Re   | Korea (3) | Direct    | P.             |
|            |       | tail |           | and other | 02-3479-5314   |
| (Pork,     |       | and  |           | importers |                |
| ham)       |       | HRI  |           |           | F.             |
|            |       |      |           |           | 02-3479-5100   |
|            |       |      |           |           |                |
|            |       |      |           |           | W.             |
|            |       |      |           |           | Lott           |
|            |       |      |           |           | ehammilk.co.kr |
+------------+-------+------+-----------+-----------+----------------+
| Haitai     | 366   | Re   | Korea (3) | Direct    | P.             |
| Beverage   |       | tail |           | and       | 02-3219-7114   |
| (Soft      |       | and  |           |           |                |
| drinks,    |       | HRI  |           | other     | F. 02-651-9084 |
| juices)    |       |      |           | importers |                |
|            |       |      |           |           | W. htb.co.kr   |
+------------+-------+------+-----------+-----------+----------------+
| Haitai     | 364   | Re   | Korea (2) | Direct    | P. 02-709-7766 |
| Con        |       | tail |           | and       |                |
| fectionery |       | and  | U.S. (1)  |           | F. 02-790-8123 |
| (Conf      |       | HRI  |           | other     |                |
| ectionery, |       |      |           | importers | W. ht.co.kr    |
| chewing    |       |      |           |           |                |
| gum, ice   |       |      |           |           |                |
| cream)     |       |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Coca Cola  | 334   | Re   | Korea (3) | Direct    | P.             |
| Korea      |       | tail |           | and       | 02-2259-5888   |
| Bottling   |       | and  |           |           |                |
|            |       | HRI  |           | other     | F.             |
| (Soft      |       |      |           | importers | 02-2259-5593   |
| drinks,    |       |      |           |           |                |
| other      |       |      |           |           | W. cckbc.co.kr |
| beverages) |       |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Orion      | 316   | Re   | Korea (3) | Direct    | P. 02-710-6000 |
| (conf      |       | tail |           | and       |                |
| ectionery, |       | and  | Japan (1) |           | F. 02-719-2582 |
| chewing    |       | HRI  |           | other     |                |
| gum &      |       |      |           | importers | W. orion.co.kr |
| snacks)    |       |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Ottogi     | 311   | Re   | Korea (2) | Direct    | P. 02-528-1381 |
|            |       | tail |           | and       |                |
| (ketchup,  |       | and  | Japan (1) |           | F. 02-528-1949 |
| m          |       | HRI  |           | other     |                |
| ayonnaise, |       |      |           | importers | W.             |
| curry)     |       |      |           |           | ottogi.co.kr   |
+------------+-------+------+-----------+-----------+----------------+
| Daerim     | 209   | Re   | Korea (2) | Direct    | P.             |
| Corp.      |       | tail |           | and other | 02-3470-6000   |
|            |       | and  | Chile (1) | importers |                |
| (Fish      |       | HRI  |           |           | F. 02-523-8900 |
| cake,      |       |      | Japan (1) |           |                |
| imitation  |       |      |           |           | W. daerimi.com |
| crab meat, |       |      | U.S. (1)  |           |                |
| pickled    |       |      |           |           |                |
| seafood,   |       |      | China (1) |           |                |
| frozen     |       |      |           |           |                |
| fish       |       |      |           |           |                |
| products,  |       |      |           |           |                |
| dried fish |       |      |           |           |                |
| cake, fish |       |      |           |           |                |
| sausage)   |       |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Shany      | 196   | Re   | Korea (3) | Direct    | P.             |
|            |       | tail |           | and       | 031-739-2000   |
| (bread,    |       | and  |           |           |                |
| ice cream) |       | HRI  |           | other     | F.             |
|            |       |      |           | importers | 031-739-2011   |
+------------+-------+------+-----------+-----------+----------------+
| Paris      | 190   | Re   | Korea (2) | Direct    | P.             |
| Croissant  |       | tail |           | and       | 031-740-5500   |
|            |       | and  |           |           |                |
| (bread,    |       | HRI  |           | other     | F.             |
| conf       |       |      |           | importers | 031-740-5520   |
| ectionery) |       |      |           |           |                |
|            |       |      |           |           | W. paris.co.kr |
+------------+-------+------+-----------+-----------+----------------+
| Samyang    | 183   | Re   | Korea     | Direct    | P. 02-740-7114 |
|            |       | tail | (11)      | and       |                |
| (Sugar,    |       | and  |           |           | F. 02-743-7720 |
| edible     |       | HRI  | Japan (1) | other     |                |
| oils,      |       |      |           | importers | W.             |
| premixes,  |       |      | U.S. (1)  |           | samyang.co.kr  |
| wheat      |       |      |           |           |                |
| flour)     |       |      | Germany   |           |                |
|            |       |      | (1)       |           |                |
|            |       |      |           |           |                |
|            |       |      | Vietnam   |           |                |
|            |       |      | (1)       |           |                |
|            |       |      |           |           |                |
|            |       |      | Hong Kong |           |                |
|            |       |      | (1)       |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Korea      | 181   | Re   | Korea (1) | Direct    | P. 02-590-0011 |
| Nestle     |       | tail |           | and via   |                |
| (Coffee,   |       | and  |           | other     | F. 02-737-2295 |
| infant     |       | HRI  |           | importers |                |
| formula,   |       |      |           |           | W.             |
| n          |       |      |           |           | nestle.co.kr   |
| utritional |       |      |           |           |                |
| food)      |       |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Korea      | 176   | Re   | Korea (3) | Direct    | P.             |
| Yakult     |       | tail |           | and via   | 02-3449-6000   |
| (Instant   |       | and  |           | other     |                |
| noodle,    |       | HRI  |           | importers | F.             |
| fermented  |       |      |           |           | 02-3449-6655   |
| milk)      |       |      |           |           |                |
|            |       |      |           |           | W.             |
|            |       |      |           |           | yakult.co.kr   |
+------------+-------+------+-----------+-----------+----------------+
| Ottogi     | 167   | Re   | Korea (2) | Direct    | P.             |
| Ramyun     |       | tail |           | and via   | 031-683-1811   |
| (Instant   |       | and  | Japan (1) | other     |                |
| noodles)   |       | HRI  |           | importers | F.             |
|            |       |      |           |           | 031-683-1242   |
|            |       |      |           |           |                |
|            |       |      |           |           | W.             |
|            |       |      |           |           | ottogi.co.kr   |
+------------+-------+------+-----------+-----------+----------------+
| Namyang    | 159   | Re   | Korea (3) | Direct    | P. 02-734-1305 |
| Milk       |       | tail |           | and via   |                |
| (Processed |       | and  |           | other     | F. 02-739-9689 |
| milk       |       |      |           | importers |                |
| products,  |       | HRI  |           |           | W.             |
| beverages, |       |      |           |           | namyangi.com   |
| tea)       |       |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Samyang    | 157   | Re   | Korea (2) | Direct    | P. 02-940-3000 |
| Food       |       | tail |           | and via   |                |
| (Instant   |       | and  | U.S. (1)  | other     | F. 02-942-4350 |
| noodles,   |       | HRI  |           | importers |                |
| snacks,    |       |      | China (1) |           | W.             |
| soy sauce, |       |      |           |           | sam            |
| ice cream, |       |      |           |           | yangfood.co.kr |
| milk)      |       |      |           |           |                |
+------------+-------+------+-----------+-----------+----------------+
| Donga      | 150   | Re   | Korea (3) | Direct    | P.             |
| Otsuka     |       | tail |           | and via   | 031-470-2114   |
| (          |       | and  |           | other     |                |
| Beverages, |       | HRI  |           | importers | F.             |
| soy milk)  |       |      |           |           | 031-470-0436   |
|            |       |      |           |           |                |
|            |       |      |           |           | W.             |
|            |       |      |           |           | dong           |
|            |       |      |           |           | a-otsuka.co.kr |
+------------+-------+------+-----------+-----------+----------------+

Sales included only food products and packages, but meat products not
included.

\*P stands for phone number, \*F for fax number and \*W for Website.

Note: Country code for Korea is 82. The \"0\" of the city code is
dropped when calling from abroad.

## 

## D. SECTOR TRENDS

The Korean food and beverage manufacturing and processing industry is a
major consumer of imported raw materials, intermediate products,
ingredients and additives. Imports are necessary to support the
processing industry due to limited local supply in terms of quantity and
variety. Over 70 percent of Korea's food products are imported. The area
of cultivated land declined to 1,863,000 hectares in 2002, down more
than 6 percent from 1,985,000 hectares in 1995, due mainly to the loss
of farmland to ever expanding urbanization.

Korea has a diverse food-processing sector. Concurrently, Korean
consumers exhibit a tendency for nationally produced goods, while still
seeking an expanding variety of products. Increased buying power,
international travel and cosmopolitan living all lend to growing demand
for a diversity of locally produced food items.

Table 4. Output of Food Processing by Sector: 2002

+----------------------------+------------------------+----------------+
| # Food Processing Sector   | **Gross output         | **Share (%)**  |
|                            | (\$million)**          |                |
+----------------------------+------------------------+----------------+
| Meat processing            | 3,895                  | 10.9%          |
+----------------------------+------------------------+----------------+
| Grain processing           | 3,691                  | 10.3%          |
+----------------------------+------------------------+----------------+
| Dairy & Ice cream          | 3,535                  | 9.9%           |
+----------------------------+------------------------+----------------+
| Feed processing            | 3,430                  | 9.6%           |
+----------------------------+------------------------+----------------+
| Alcoholic beverages        | 3,030                  | 8.5%           |
+----------------------------+------------------------+----------------+
| Non-alcoholic beverages    | 2,637                  | 7.4%           |
+----------------------------+------------------------+----------------+
| Fish and marine products   | 2,449                  | 6.9%           |
+----------------------------+------------------------+----------------+
| Coffee, tea, soup & other  | 2,124                  | 5.9%           |
| foods                      |                        |                |
+----------------------------+------------------------+----------------+
| Bread & Grain preparations | 2,028                  | 5.7%           |
+----------------------------+------------------------+----------------+
| Seasonings, spices & Food  | 2,001                  | 5.6%           |
| additives                  |                        |                |
+----------------------------+------------------------+----------------+
| Noodles and similar        | 1,426                  | 4.0%           |
| products                   |                        |                |
+----------------------------+------------------------+----------------+
| Cocoa & sugar              | 1,086                  | 3.0%           |
| confectionery              |                        |                |
+----------------------------+------------------------+----------------+
| Fats & Oils manufacturing  | 1,066                  | 3.0%           |
+----------------------------+------------------------+----------------+
| Fruit & Vegetable          | 1,014                  | 2.8%           |
| Processing                 |                        |                |
+----------------------------+------------------------+----------------+
| Sugar manufacturing        | 676                    | 1.9%           |
+----------------------------+------------------------+----------------+
| Starch & Sweeteners        | 637                    | 1.8%           |
| manufacturing              |                        |                |
+----------------------------+------------------------+----------------+
| Total                      | 35,731                 | 100.0%         |
+----------------------------+------------------------+----------------+

Most Korean food and beverage manufacturers are small-scaled companies.
As of the end of 2002, there were 7,550 food, livestock, dairy and
beverage manufacturing companies with a labor force of five or more
across Korea. Of these there are only 16 manufacturers with 500
employees or over as shown on the following table. Only 4 percent (304
manufacturers) have 100 or more employees.

Table 5. Employment Size of Food and Beverage Manufacturers: 2002

  ------------------------ ------------------------- ---------------------
  **No. of Employees**     **No. of Manufacturers**  **Percent**

  5-9                      3,718                     49.2%

  10-19                    1,810                     24.0%

  20-49                    1,291                     17.1%

  50-99                    427                       5.7%

  100-199                  198                       2.6%

  200-399                  54                        0.7%

  300-499                  36                        0.5%

  500 and Over             16                        0.2%

  Total                    7,550                     100.0%
  ------------------------ ------------------------- ---------------------

Korea imports a wide variety of agricultural products for processing
such as corn, soybeans, wheat, essential oils, frozen concentrated
orange juice, turkey meat, duck meat, almonds, walnuts, powdered milk,
whey powder, coffee, animal and vegetable fats and oils, beef tallow,
seafood, processed fruits and vegetables, coffee, potato products,
vegetable oils and cocoa products. In 2002, Korean self-sufficiency of
rice is estimated at 107 percent, wheat at 0.2 percent, barley at 60.4
percent, soybeans at 7.3 percent and corn at 0.7 percent. In 2002 Korea
imported 3.9 million metric tons (MT) of wheat valued at \$543 million,
9.1 million MT of corn valued at \$988 million and 1.5 million MT of
soybeans valued at \$329 million. U.S. suppliers have a strong
opportunity to export raw materials or ingredients for use in food
processing in Korea.

Local eating habits have changed dramatically in recent years. A diet
that had long been based on rice became progressively more centered on
wheat and protein. At the same time, consumers sought more diversity and
became more quality oriented. Consumption of fish, fruits, vegetables,
marine plants and edible oil increased. Consumer preferences also
shifted toward foods that were convenient to cook rather than those that
require lengthy preparation. At the same time, demand for greater
quality in terms of flavor and nutrition increased, a sharp departure
from a diet that previously emphasized calorific content. Consumers
became more health and safety conscious in their food buying habit as
ingredients, packaging, shelf life and toxicity became important
determinants of purchasing behavior.

Spending habits also became diversified as individual preferences and a
wider variety of foods became available to meet consumer demand. These
shifts toward quality, variety, convenience, safety and health resulted
not only increased consumption of processed food, but also stimulated
the growth of the domestic food processing industry.

### 

###  Food Ingredient Processing

There are a total of 8 wheat flour millers with 11 plants in Korea. One
hundred percent of wheat for flour milling is imported mostly from the
U.S., Australia, Canada, China, and India. The flour market continued to
expand with increasing per capita income and change of diet from rice to
wheat based food over the past decades. However, the wheat flour market
grew by about 2-3 percent annually until 1990\'s, but is now stagnant.
Per capita consumption of wheat in Korea was 37 Kg. in 2002.

No sugar is produced in Korea, so all raw sugar is imported. There are
currently three sugar-refining companies in Korea with a total annual
production of about 1.3 million metric tons. Sugar is widely used in
food sectors, including confectionery, jam and jelly, powered milk,
bakery, cake, beverages and fruit based alcohol. Korea also exports
about 35 percent of its refined sugar production. The industry is
expected to grow at about 2-3 percent annually for the foreseeable
future.

There are 4 companies in Korea which produce starch and starch syrup
with corn as a raw material. All the corn used in this sector is
imported. The total amount of corn used in starch and starch syrup
production amounted to about 2 million metric tons in 2002. Although
this sector has not grown much compared to that of other sectors, there
is much room for U.S. sales to grow in the future. China has become the
major corn supplier to Korea but this trend may be changing as Chinese
corn export policies are revised.

### 

### Confectionary and Bakery

The Korean confectionery market increased by 8.8 percent to \$1.7
billion in 2002 from \$1.59 billion the previous year. This is big
growth relative to other food processing sectors. By category, the
largest increasing was chewing gum, which jumped 33.4 percent, followed
by chocolate (13.7 percent), pie (11.4 percent), biscuits (9.7 percent),
and candy (7.6 percent). Among the individual products, snacks were the
biggest category with \$483 million, followed by cookies with \$411
million, and chewing gum with \$287 million. There were about 13,000
bakery shops across Korea in 202. However, the 5 top franchised and mass
production bakery companies, with about 2,400 shops, took a 31 percent
share of the \$2.5 billion market in 2002.

### 

### Non-alcoholic Beverages Processing

The non-alcoholic beverage segment grew by about 2 percent in 2002. By
segment, the carbonated beverage market increased to about \$983
million, up from \$967 million in 2001, the juice market increased to
\$783 million, up from \$767 million, and other beverage market,
including soy milk, water and sports water, increased to \$967 million,
up from \$933 million. The non-alcoholic beverage market is diversified,
the product life cycle is shorter, the sector requires diversified and
complex marketing activities, and many new to market products are
developed every year.

### 

### 

### Dairy Processing

Korean society is rapidly adopting many aspects of Western societies,
such as dual-income families, fewer children, fewer family members, less
time to spend on cooking, and dining out with greater frequency.
Increasing disposable incomes mean that Koreans can also indulge their
growing health consciousness and concerns about nutrition. The major
dairy companies are naturally adapting to meet the changing demands of
their customers. Dairy products are not just a foodstuff, but also offer
health benefits.

Probiotic drinking yogurts, for example, appeal to a broad range of
customers thanks to their high nutritional values and convenience.
Aggressive marketing efforts help to impress upon the public the
benefits offered by the product. Similar health benefits to those
offered by probiotic yogurts are expected to be extended to related
dairy products like milk and cheese. Consumers are willing to pay
premium prices for health foods, so the dairy companies will make great
efforts to launch premium brands in the future with a focus on health
benefits.

###  Meat Processing

### 

Total processed meat production in Korea was 157,230 metric tons, broken
down to 60,200 tons of ham, about 40,400 tons of sausage, about 2,000
tons of bacon, 26,700 tons of canned meat, and 28,000 tons of mixed
sausages in 2002. Pork accounts for nearly the entire sector. Meat
processing has continued to grow since 1999, that is, up about 7 percent
in 1999, up 14 percent in 2000, up 10 percent in 2001 and up another 10
percent in 2002.

## 

###  Seafood Processing 

Korea processed about 1.4 million tons of fish and seafood in 2002.
Imported seafood products are utilized for both domestic consumption and
re‑export. Seafood is imported into Korea from many countries. Major
suppliers include China, Russia, the United States, Japan and Vietnam.
In 2002, these five countries accounted for over 70 percent of total
Korean seafood imports on a value basis. In 2002, China became the
largest seafood supplier to Korea by exporting \$711 million, followed
by Russia at \$214 million, the U.S. at \$165 million, Japan at \$142
million, and Vietnam at \$122 million. The major species imported to
Korea in 2002 were yellow Corvina(\$138 million), Alaska pollack(\$90
million), hair tail(\$81 million), Alaska pollack roe(\$80 million),
shrimp(\$51 million), Alaska pollack surimi(\$49 million), and poulp
squid(\$40 million). All of the noted product was frozen.

Table 6: Imports of Major Fishery Products: U.S. and the World: 2002
(US\$1,000)

  ----------------------- ----------------------- -----------------------
  **Fish Species**        **From U.S.**           **From World**

  Pollack surimi, frozen  48,439                  48,772

  Angler, frozen          37,486                  69,990

  Roes of Pollack, frozen 20,108                  80,174

  Other surimi, frozen    8,730                   64,818

  Hagfish, frozen         5,529                   7,098

  Other flat fish, frozen 4,832                   18,632

  Alaska Pollack, frozen  4,468                   89,492

  Cod, frozen             3,469                   14,602

  Angler, fresh           2,925                   3,865

  Atka mackerel, frozen   2,921                   13,117

  Other roes, frozen      2,556                   7,227

  Ray, frozen             1,871                   12,052

  Prepared sea cucumber   1,411                   4,892

  Rock fish, frozen       1,323                   9,646

  Sable fish, frozen      903                     919

  Plaice, frozen          881                     1,865

  Sardines, frozen        811                     5,928

  Cod, fresh              652                     3,425

  Rock lobster, frozen    589                     3,796

  Shrimps and prawns      589                     51,482
  other than peeled,                              
  frozen                                          

  Pacific salmon except   565                     2,876
  Sockeye                                         
  ----------------------- ----------------------- -----------------------

Source: Statistical Yearbook of Foreign Trade 2002

# 

# 

# 

# 

# SECTION III. COMPETITION

The United States is the largest supplier of agricultural products to
Korea with a 27.9 percent market share in 2002. However, the U.S.
competes with many other countries for many products, such as, corn with
China and Brazil, wheat with Australia, soybeans with Brazil, red meat
with Australia, dairy products with the EU, Australia and New Zealand,
and fish with China, Russia and Japan.

A brief review of imports by major product category follows. The market
shares stated in this section are based on 2002 Korean imports.

Table 7. Major Imports by Product Category by Origin: 2002

+-------------+----------+----------------+-------------+------------+
| **Product   | **Import | **Major Supply | **Strengths | **         |
| Category**  | Market   | Sources in     | of Key      | Advantages |
|             | Size in  | 2002**         | Supply      | and        |
|             | 2002     |                | Countries** | Dis        |
|             | (\$Mi    |                |             | advantages |
|             | llion)** |                |             | of Local   |
|             |          |                |             | S          |
|             |          |                |             | uppliers** |
+-------------+----------+----------------+-------------+------------+
| Beef        | 848      | U.S. (70%)     | U.S. strong | Consumers  |
|             |          |                | in          | state they |
| (HS 0201 &  |          | Australia      | supplying   | prefer     |
| 0202)       |          | (22%)          | all types   | domestic.  |
|             |          |                | of cuts due | Local      |
|             |          | New Zealand    | to price    | supplies   |
|             |          | (5%)           | and quality | are short. |
|             |          |                | compe       |            |
|             |          |                | titiveness. |            |
+-------------+----------+----------------+-------------+------------+
| Pork        | 206      | EU (55%)       | EU prices   | Koreans    |
|             |          |                | are         | are big    |
| (HS 0203)   |          | Canada (15%)   | reasonable. | consumers  |
|             |          |                |             | of pork    |
|             |          | U.S. (7%)      |             | and have a |
|             |          |                |             | large pork |
|             |          | Australia(2%)  |             | p          |
|             |          |                |             | roduction, |
|             |          |                |             | but most   |
|             |          |                |             | of the     |
|             |          |                |             | feed       |
|             |          |                |             | i          |
|             |          |                |             | ngredients |
|             |          |                |             | are        |
|             |          |                |             | imported.  |
+-------------+----------+----------------+-------------+------------+
| Poultry     | 102      | U.S. (55%)     | U.S. prices | Avian flu  |
| meat        |          |                | are         | broke in   |
|             |          | Thailand(41%)  | competitive | Korea.     |
| (HS 0207)   |          |                | in case of  | Almost all |
|             |          | China (2%)     | chicken     | feed       |
|             |          |                | legs. Thai  | i          |
|             |          |                | prices are  | ngredients |
|             |          |                | c           | are        |
|             |          |                | ompetitive. | imported.  |
+-------------+----------+----------------+-------------+------------+
| Fish and    | 1,676    | China (41%)    | Chinese and | Shortages  |
| seafood     |          |                | Russian     | of local   |
| products    |          | Russia (13%)   | prices are  | supply.    |
|             |          |                | competitive |            |
| (HS 03)     |          | U.S. (10%)     | and are     |            |
|             |          |                | closer to   |            |
|             |          | Japan (8%)     | Korea. U.S. |            |
|             |          |                | fish is     |            |
|             |          | Thailand (4%)  | high        |            |
|             |          |                | quality.    |            |
+-------------+----------+----------------+-------------+------------+
| Dairy       | 147      | EU (28%)       | The prices  | Local      |
| products    |          |                | of EU,      | production |
| (HS 04)     |          | Australia      | Australia   | cost is    |
|             |          | (26%)          | and New     | high and   |
|             |          |                | Zealand are | most feed  |
|             |          | New Zealand    | c           | i          |
|             |          | (23%)          | ompetitive. | ngredients |
|             |          |                |             | are        |
|             |          | U.S. (16%)     |             | imported.  |
+-------------+----------+----------------+-------------+------------+
| Prepared    | 215      | U.S. (42%)     | U.S.        | Local      |
| fruits and  |          |                | quality is  | production |
| vegetables  |          | China (28%)    | high and    | cost is    |
| (HS 2001-8) |          |                | prices are  | high.      |
|             |          | Thailand (7%)  | c           |            |
|             |          |                | ompetitive. |            |
|             |          | EU (5%)        |             |            |
|             |          |                | Chinese     |            |
|             |          |                | prices are  |            |
|             |          |                | low.        |            |
+-------------+----------+----------------+-------------+------------+
| Sugar       | 47       | China (25%)    | Chinese     | All raw    |
| Co          |          |                | prices are  | sugar is   |
| nfectionary |          | EU (21%)       | c           | imported   |
| products    |          |                | ompetitive. | in Korea.  |
|             |          | Japan (12%)    |             |            |
| (HS 1704)   |          |                | EU quality  |            |
|             |          | U.S. (11%)     | is high.    |            |
|             |          |                |             |            |
|             |          | Indonesia (8%) |             |            |
+-------------+----------+----------------+-------------+------------+
| Wines       | 29       | EU (75%)       | Korean      | Local      |
|             |          |                | consumers   | production |
| (HS 2204)   |          | U.S. (15%)     | accept      | is very    |
|             |          |                | French      | little, if |
|             |          | Australia (5%) | wines as    | any. More  |
|             |          |                | high        | Koreans    |
|             |          |                | quality.    | are        |
|             |          |                | U.S. wines  | drinking   |
|             |          |                | are         | wines.     |
|             |          |                | becoming    |            |
|             |          |                | popular.    |            |
+-------------+----------+----------------+-------------+------------+
| Tree nuts   | 28       | U.S. (85%)     | U.S. is a   | No almond  |
|             |          |                | dominant    | is         |
| (HS 0801 &  |          | Australia (2%) | supplier of | produced   |
| 0802)       |          |                | almonds.    | in Korea.  |
+-------------+----------+----------------+-------------+------------+
| Bakery      | 58       | EU (29%)       | U.S. and EU | Almost     |
| products    |          |                | biscuits,   | i          |
| (HS 1905)   |          | U.S. (28%)     | cookies and | ngredients |
|             |          |                | crackers    | are        |
|             |          | China (25%)    | are high    | imported   |
|             |          |                | quality.    | in Korea.  |
+-------------+----------+----------------+-------------+------------+
| Citrus      | 95       | U.S. (96%)     | Tariff for  | Local      |
| products    |          |                | oranges     | production |
| (HS 0805)   |          | Australia (2%) | declined in | of oranges |
|             |          |                | 2004 from   | is almost  |
|             |          |                | 54.9% to    | non        |
|             |          |                | 50%. U.S.   | -existent. |
|             |          |                | is the      |            |
|             |          |                | predominant |            |
|             |          |                | supplier.   |            |
+-------------+----------+----------------+-------------+------------+
| Fruit       | 102      | Brazil (42%)   | Brazil is a | No FCOJ is |
| juices (HS  |          |                | stable and  | produced.  |
| 2009)       |          | U.S. (37%)     | cheap       |            |
|             |          |                | supplier of |            |
|             |          | EU (7%)        | FCOJ and    |            |
|             |          |                | the U.S.    |            |
|             |          | China (4%)     | FCOJ is     |            |
|             |          |                | high        |            |
|             |          |                | quality.    |            |
+-------------+----------+----------------+-------------+------------+
| Grains      | 1,605    | China (45%)    | Chinese     | Except for |
|             |          |                | corn prices | rice,      |
| (HS 10)     |          | U.S. (21%)     | are cheaper | almost all |
|             |          |                | than those  | grains are |
|             |          | Australia      | of          | imported   |
|             |          | (12%)          | competitors | in Korea.  |
|             |          |                | and China   |            |
|             |          | Brazil (9%)    | is closer   |            |
|             |          |                | to Korea.   |            |
+-------------+----------+----------------+-------------+------------+
| Oilseeds    | 391      | U.S. (71%)     | The U.S. is | Shortage   |
|             |          |                | a stable    | of supply  |
| (HS 1201-7) |          | China (13%)    | and high    | in Korea.  |
|             |          |                | quality     |            |
|             |          | Brazil (10%)   | supplier.   |            |
+-------------+----------+----------------+-------------+------------+
| Animal      | 102      | U.S. (27%)     | U.S. and EU | Almost all |
| feeds (HS   |          |                | pet foods   | feed       |
| 2309)       |          | EU (26%)       | are of high | i          |
|             |          |                | quality.    | ngredients |
|             |          | Australia      |             | are        |
|             |          | (11%)          |             | imported.  |
|             |          |                |             |            |
|             |          | China (8%)     |             |            |
+-------------+----------+----------------+-------------+------------+
| Sauces &    | 74       | China (44%)    | Chinese     | Koreans    |
| condiments  |          |                | sauces are  | have their |
|             |          | U.S. (17%)     | competitive | own        |
| (HS 2103)   |          |                | in prices.  | t          |
|             |          | Japan (15)     |             | raditional |
|             |          |                |             | sauces and |
|             |          | Australia (2%) |             | c          |
|             |          |                |             | ondiments. |
|             |          | New Zealand    |             |            |
|             |          | (2%)           |             |            |
+-------------+----------+----------------+-------------+------------+
| Coffee, tea | 104      | China (17%)    | Chinese     | Korean     |
| and spices  |          |                | prices are  | prices of  |
|             |          | Vietnam ((15%) | competitive | red pepper |
| (HS 09)     |          |                | in red      | are high.  |
|             |          | Indonesia      | pepper and  | Korea does |
|             |          | (11%)          | Vietnam,    | not        |
|             |          |                | Indonesia,  | produce    |
|             |          | Columbia (9%)  | Columbia    | coffee     |
|             |          |                | and         | beans.     |
|             |          | Honduras (9%)  | Honduras    |            |
|             |          |                | are         |            |
|             |          | Brazil (7%)    | competitive |            |
|             |          |                | in coffee   |            |
|             |          | U.S. (6%)      | beans.      |            |
+-------------+----------+----------------+-------------+------------+
| Animal and  | 278      | Malaysia (30%) | Malaysia is | Korean     |
| vegetable   |          |                | strong in   | does not   |
| oils and    |          | U.S. (21%)     | palm oil,   | produce    |
| fats        |          |                | and U.S. is | palm oil,  |
|             |          | Argentina      | strong in   | and does   |
| (HS         |          | (17%)          | beef        | not have   |
| 1501-18)    |          |                | tallow,     | many       |
|             |          | EU (7%)        | fish oils,  | in         |
|             |          |                | soybean oil | gredients. |
|             |          | Indonesia (7%) | and edible  |            |
|             |          |                | mixed oils. |            |
|             |          | Canada (5%)    |             |            |
+-------------+----------+----------------+-------------+------------+
| Prepared    | 186      | Vietnam (18%)  | Vietnam is  | Korea does |
| meat and    |          |                | strong in   | not have   |
| seafood     |          | China (16%)    | prepared    | enough raw |
|             |          |                | jerk        | materials  |
| (HS 16)     |          | Thailand (14%) | filefish,   | and Korean |
|             |          |                | China is    | prices are |
|             |          | EU (14%)       | strong in   | high       |
|             |          |                | prepared    | compared   |
|             |          | U.S. (11%)     | fish and    | to its     |
|             |          |                | Thailand is | comp       |
|             |          | New Zealand    | strong in   | etitors\'. |
|             |          | (4%)           | prepared    |            |
|             |          |                | shrimps and |            |
|             |          |                | chickens.   |            |
+-------------+----------+----------------+-------------+------------+
| Chocolate   | 93       | U.S. (34%)     | U.S. is     | Korea does |
| products    |          |                | strong in   | not        |
|             |          | EU (28%)       | medium      | produce    |
| (HS 1806)   |          |                | quality     | cocoa and  |
|             |          | Australia      |             | its        |
|             |          | (11%)          | chocolate   | processed  |
|             |          |                | products    | chocolate  |
|             |          | Turkey (6%)    | and EU is   | products   |
|             |          |                | strong in   | are        |
|             |          | China (4%)     | high        | expensive  |
|             |          |                | quality     | and not    |
|             |          | New Zealand    | chocolate   | high       |
|             |          | (3%)           | product.    | quality.   |
+-------------+----------+----------------+-------------+------------+
| Ice cream   | 10       | U.S. (60%)     | U.S. is     | Korea does |
|             |          |                | strong in   | not        |
| (HS 2105)   |          | EU (36%)       | high        | produce    |
|             |          |                | quality ice | high       |
|             |          | New Zealand    | cream.      | quality    |
|             |          | (4%)           |             | ice cream. |
+-------------+----------+----------------+-------------+------------+

# SECTION IV. BEST PROSPECTS

# 

Korea imports a wide variety of agricultural, food, fishery products and
ingredients for domestic consumption, and also re-exports some final
product to other countries after importing raw and/or semi-finished
ingredients and manufacturing them in Korea. The following are products
which have presence in Korea and have good increased sales potential to
the processing sector

Table 8. Category A: Products Present in the Market Which Have Good
Increased Sales

Potential

+--------+-------+--------+--------+--------+------------+------------+
| **P    | *     | **2002 | **5    | **     | **Key      | **Market   |
| roduct | *2002 | Imp    | Yr.    | Import | C          | Attr       |
| Cate   | M     | orts** | Avg.   | Tariff | onstraints | activeness |
| gory** | arket |        | Annual | Rate** | over       | for U.S.** |
|        | S     | **Vol  | Import |        | Market     |            |
|        | ize** | ume:** | Gr     |        | Dev        |            |
|        |       |        | owth** |        | elopment** |            |
|        | **(   | **     |        |        |            |            |
|        | 1,000 | (1,000 | **To   |        |            |            |
|        | mt)** | mt)**  | tal:** |        |            |            |
|        |       |        |        |        |            |            |
|        |       | **Va   | **U    |        |            |            |
|        |       | lue:** | .S.:** |        |            |            |
|        |       |        |        |        |            |            |
|        |       | **(\$  |        |        |            |            |
|        |       | Mill   |        |        |            |            |
|        |       | ion)** |        |        |            |            |
+--------+-------+--------+--------+--------+------------+------------+
| Red    | 1,359 | 109    | 34.80% | Beef:  | Consumers  | U.S.       |
| meat   |       |        |        | 40%    | state they | strong in  |
|        |       | \      | 44.80% |        | prefer     | supplying  |
|        |       | $1,054 |        | C      | domestic.  | all types  |
|        |       |        |        | hilled |            | of cuts    |
|        |       |        |        | Pork:  |            | due to     |
|        |       |        |        | 22.5%  |            | price and  |
|        |       |        |        |        |            | quality    |
|        |       |        |        | Frozen |            | compet     |
|        |       |        |        | Pork:  |            | itiveness. |
|        |       |        |        | 25%    |            |            |
+--------+-------+--------+--------+--------+------------+------------+
| P      | 386   | 439    | 44.30% | \*     | Not        | Price-c    |
| oultry |       |        |        | 18-20% | manually   | ompetitive |
| Meat   |       | \$101  | 51.30% |        | trimmed.   | in case of |
|        |       |        |        |        |            | chicken    |
|        |       |        |        |        |            | legs       |
+--------+-------+--------+--------+--------+------------+------------+
| Citrus | 880   | 109    | 36.50% | O      | High       | Tariff for |
|        |       |        |        | range: | tariff     | oranges    |
|        |       | \$95   | 35.70% | 50%    | rates and  | will       |
|        |       |        |        |        | quality    | decline in |
|        |       |        |        |        | variable.  | 2004 from  |
|        |       |        |        |        |            | 54.9% to   |
|        |       |        |        | Grap   |            | 50%. U.S.  |
|        |       |        |        | efruit |            | is the     |
|        |       |        |        | &      |            | p          |
|        |       |        |        | lemon: |            | redominant |
|        |       |        |        | 30%    |            | supplier.  |
+--------+-------+--------+--------+--------+------------+------------+
| Offals | NA    | 69     | 44.30% | O      | Not easy   | Product    |
| & Guts |       |        |        | ffals: | to meet    | not        |
|        |       | \$137  | 47%    | 18%    | local      | consumed   |
|        |       |        |        |        | i          | do         |
|        |       |        |        |        | mporters\' | mestically |
|        |       |        |        |        | spec       | in the     |
|        |       |        |        | Guts:  | ifications | U.S., but  |
|        |       |        |        | 27%    |            | demand in  |
|        |       |        |        |        |            | Korea for  |
|        |       |        |        |        |            | food use   |
|        |       |        |        |        |            | is quite   |
|        |       |        |        |        |            | high and   |
|        |       |        |        |        |            | steady.    |
+--------+-------+--------+--------+--------+------------+------------+
| Cho    | \$293 | 31     | 19.50% | 8%     | Low image  | C          |
| colate | mil   |        |        |        | for design | ompetitive |
|        |       | \$93   | 22.40% |        | and        | in prices  |
|        |       |        |        |        | quality    | and design |
|        |       |        |        |        | for high   | for medium |
|        |       |        |        |        | quality    | quality    |
|        |       |        |        |        | product    | products   |
+--------+-------+--------+--------+--------+------------+------------+
| Frozen | NA    | 151    | 14.30% | \      | High       | U.S.       |
| and    |       |        |        | *8-30% | prices     | product is |
| Pro    |       | \$121  | 30.80% |        | compared   | considered |
| cessed |       |        |        |        | to         | high       |
| Vege   |       |        |        |        | c          | quality    |
| tables |       |        |        |        | ompetitors |            |
+--------+-------+--------+--------+--------+------------+------------+
| Wine   | NA    | 12     | 52%    | 15%    | Fewer      | C          |
|        |       |        |        |        | varieties  | onsumption |
|        |       | \$29   | 60.80% |        | than       | is growing |
|        |       |        |        |        | French;    | rapidly    |
|        |       |        |        |        | higher     |            |
|        |       |        |        |        | prices     |            |
|        |       |        |        |        | than       |            |
|        |       |        |        |        | Chilean    |            |
|        |       |        |        |        | and        |            |
|        |       |        |        |        | Australian |            |
|        |       |        |        |        | wines      |            |
+--------+-------+--------+--------+--------+------------+------------+
| Fish   | 3,212 | 1,110  | 40%    | \*     | US prices  | Good       |
| and    |       |        |        | 10-20% | are higher | quality    |
| S      |       | \      | 21.90% |        | than those |            |
| eafood |       | $1,820 |        |        | of         |            |
|        |       |        |        |        | c          |            |
|        |       |        |        |        | ompetitors |            |
+--------+-------+--------+--------+--------+------------+------------+
| A      | 5     | 5      | 8.30%  | 8%     | Demand is  | High       |
| lmonds |       |        |        |        | limited    | profile    |
|        |       | \$17   | 7.70%  |        |            | and high   |
|        |       |        |        |        |            | quality    |
+--------+-------+--------+--------+--------+------------+------------+
| Sauces | NA    | 54     | 21.90% | 8%     | US bottles | High       |
|        |       |        |        |        | are a      | quality    |
|        |       | \$74   | 13.40% |        | little too |            |
|        |       |        |        |        | big for    |            |
|        |       |        |        |        | consumers. |            |
+--------+-------+--------+--------+--------+------------+------------+

\*The tariff rates are different depending upon the product, and for
some fish there are adjustment tariffs, which are a lot higher than the
above. For accurate tariff rates, please contact ATO Seoul.

# SECTION V. KEY CONTACTS AND FURTHER INFORMATION 

**For further information about the Korean agricultural market, please
contact:**

U.S. Agricultural Trade Office

Korean Address: Room 303, Leema Building, 146-1, Susong-dong, Chongro-ku

Seoul 110-140, Korea

U.S. Mailing Address: US Embassy Seoul, Unit 15550-ATO, APO, AP
96205-5550

Telephone: 82-2 397-4188 Fax: 82-2 720-7921

E-mail: <atoseoul@usda.gov> Website: [www.atoseoul.com]{.underline}

Agricultural Affairs Office

Korean Address: U.S. Embassy, 82, Sejong-ro, Chongro-ku, Seoul 110-140,
Korea

U.S. Mailing Address: US Embassy Seoul, Unit 15550-AgAff, APO, AP
96205-5550

Telephone: 82-2 397-4297 Fax: 82-2 738-7147

E-mail: <agseoul@usda.gov>

**For more information on how you can register for USDA/FAS's Supplier
List:**

The United States Department of Agriculture's Foreign Agricultural
Service (USDA/FAS) offers information and services that can be
beneficial to both new and experienced exporters. For example, the U.S.
Suppliers Service is a searchable database of over 5,000 U.S. exporters
and their products, which is used by USDA/FAS to help facilitate
connecting potential buyers with U.S. suppliers. This database is used
by more than 85 USDA FAS Overseas offices, such as the ATO in Seoul,
Korea, to help export agents, trading companies, importers and foreign
market buyers locate U.S. suppliers. It is also used to recruit U.S.
exporters to participate in market development activities sponsored by
USDA and federal export programs.

You can register online for this service at
**[http://www.fas.usda.gov/agexport/exporter.html]{.underline}**

AgConnections Team

AgExport Services Division, Foreign Agricultural Service, Washington, DC

Phone: 202-690-4172 Fax: 202-205-2963

E-mail: <joyce.estep@fas.usda.gov> Website:
www.fas.usda.gov/agx/agx.html

**For further information about sanitary and phytosanitary requirements,
please contact:**

U.S. Animal Plant and Health Inspection Service

Room 303, Leema Building, 146-1, Susong-dong, Chongro-ku, Seoul 110-140,
Korea

U.S. Mailing Address: USDA-APHIS, US Embassy Seoul, Unit 15550, APO, AP
96205-5550

Telephone: 82-2 725-5495 Fax: 82-2 725-5496

E-mail: aphis@kornet.net Website: www.aphis.usda.gov

**For information about activities by Strategic Trade Regional Groups,
please contact:**

**Mid-America International Agri-Trade Council (MIATCO)**

400 West Erie Street, Suite 100, Chicago, IL 60610

Telephone: 312-944-3030 Fax: 312 944-1144

E-mail: eriggs@miatoco.org

Website: [www.miatco.org](http://www.miatco.org/)

Western United States Agricultural Trade Association

2500 Main Street, Suite 110, Vancouver, WA 98660-2697

Phone: 360-693-3373 Fax: 360-693-3464

E-mail: <bruce@wusata.org>

Website: [www.wusata.org](http://www.wusata.org/)

**Eastern United States Agricultural & Food Export Council**

150 S. Independence Mall West, 1036 Public Ledger Building,
Philadelphia, PA 19106

Phone: 215-829-9111 Fax: 215-829-9777

E-mail: <jcanono@foodexportusa.org>

Website: [www.foodexportusa.org](http://www.foodexportusa.org/)

**Southern United States Agricultural Trade Association**

2 Canal Street Suite 2515, New Orleans, LA 70130, USA

Phone: 504-568-5986 Fax: 504-568-6010

E-mail: <jim@susta.org>

Website: [www.susta.org](http://www.susta.org/)

**For information on the commercial and industrial products in Korea,
please contact:**

Foreign Commercial Service

Korean Address: U.S. Embassy, 82, Sejong-ro, Chongro-ku, Seoul, Korea

U.S. Mailing Address: US Embassy Seoul, Unit 15550-FCS, APO, AP
96205-5550

Telephone: 82-2 397-4535 Fax: 82-2 739-1628

E-mail: <Seoul.office.box@mail.doc.gov> Website:
[www.buyusa.gov/korea](http://www.buyusa.gov/korea)

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