SEOUL, Oct. 1 (Korea Bizwire) — Demand for meal kits has received a big boost from the new coronavirus outbreak as stay-at-home consumers in South Korea have chosen easy-to-cook meals rather than dining out to avoid the risk of infections, industry sources said Thursday.
To meet such high demand, local foodmakers are expanding the meal kit business or venturing into the market as part of efforts to shore up their profitability and nurture the sector as one of their key revenue sources.
Meal kits allow consumers to easily and quickly cook food by following instructions with prechopped ingredients and provided sauces.
Unlike frozen instant dishes, commonly known as home meal replacement (HMR) products, meal kits have to be cooked. But they offer various choices for menus and allow customers to cook food in their own way by adding new ingredients.
The Korea Rural Economic Institute said the value of the local meal kit market stood at about 100 billion won (US$85.2 million) last year and is expected to grow to 700 billion won in 2024.
Fresheasy, a startup established in 2016, has stood out in the local meal kit market in recent years with a 70 percent share of the market, according to industry watchers.
The company’s sales more than tripled to 71.1 billion won last year from 21.8 billion won in 2018. In the first half, its sales jumped 127 percent from a year earlier, according to the company.
An increase in the sales came as people stayed at home more amid the COVID-19 pandemic. The company currently sells some 300 types of meal kits.
“Meal kit products are briskly being sold via e-commerce channels here. That’s different from meal kits companies in foreign countries, which sell the products via subscription or their own delivery services,” Oh Li-na, an analyst at eBEST Investment & Securities Co., said in a report.
CJ Cheiljedang Corp., the country’s largest food company, launched the meal kit brand Cookit in April 2019 and has since reported brisk sales.
In the January-August period, the company saw Cookit’s sales rise at a monthly average of 20 percent, company officials said.
Emart Inc., the country’s largest hypermarket chain operated by Shinsegae, also posted solid growth in sales of its meal kit products.
The sales of easy-to-cook food products more than tripled during the first 20 days of September, compared with the same period of last year, Emart said.
Other foodmaking companies have made a foray into the potentially lucrative meal kit market.
SPC Samlip clinched a preliminary business deal with meal kit company Food Assemble last month in a bid to co-develop easy-to-cook dishes. The company is currently selling HMR products, but it is the first time that SPC Samlip has entered the meal kit market.
Food service provider Samsung Welstory Inc. established business ties with Fresheasy in June to provide foodstuff to the startup for the development of healthy meal kits.