Behavior of Rice consumption in Korea

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Behavior of Rice consumption in Korea
Korea Rural Economic Institute Lee, Kye-Im
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- Contents -

• 1. Change in rice consumption
• 2. Comparison of rice consumption depending on
  age and consuming place
• 3. Determinant factors of consuming rice
• 4. Family behavior of consuming rice
• 5. Purchasing trends in food industries
• 6. Implication

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1. Change in rice consumption

• per capita consumption decreased
• 1970s -0.3 ?1980s -1.0 ?after 1990 -2.6

• home 1980s -1.4 after 1990 -3.7
  decreasing rapidly

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• Diminishing household rice consumption is due to
  increased
• eating-out and meat consumption by
  westernization and
• pursuing convenience and externalization of
  dietary life

Rice
Restaurant
Meat
Bread Noodle
Rice
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2. Comparison of rice consumption by age and
consuming place
1) Rice consumption structure by age
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• over 50s regular 3 meals per a day
• 1040s little breakfast or substituted by
  bread
• - Amount of breakfast is more than that of lunch
  by 30g

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2) Rice consumption structure by consuming
place

69 of rice consumption as a main dish is
consumed at home

• Source National Statistical Office, Survey on
  Household Economy(2002, 33,119 samples)

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3. Determinant factors of rice consumption

• Expenditure on rice f(income, social
  demographic
• characteristics, opportunity cost
  of housewife)
• Ratio of non consumption household 37
• (double-hurdle model)
• coefficient of opportunity cost of housewife
  (-),
• decreasing income elasticity of
  rice consumption
• 0.24(1982) ?0.16(2002)

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1) Trend of rice consumption

62 of urban households purchase at market
76 of rice consuming households go market in
person, 21 of them use the telephone, and 1 of
them use the Internet
Although 45,00048,000won per 20kg is in
general, there are obvious differences by the
level of income
4. Family behavior of rice consumption
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• rice purchasing place Near rice market(21),
• Big
  discount store(21),
• NACF
  market(18),
• General
  supermarket(18)

Near rice market, General supermarket
convenient delivery NACF market, Department store
creditable quality Big discount store low
price, one stop shopping
Reason

• 80 of purchaser choose 20kg, 12 of them select
  10Kg
• Rice purchased is consumed for 1 to 1.5 months
  generally, there are
• 24 of household for over 2 month
• When purchasing rice, 49 of purchasers choose
  other brands
• and 41 of purchaser buy same brand.

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2) Standard for Rice Choice

• Flavour(45.4),Price(27.2), Safety(20.5)
• Flavour and safety become the standard of
  selecting
• rice according to increasing income

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3) Consumers evaluation to quality and price of
rice

• There are some positive response that rice of
  high price has good taste (58.1) and there are
  taste difference by brand among rice that has
  similar price (45.3)
• As a determinant factors of taste of rice, the
  way of cooking, produced area, processing method,
  cultivating skill and reserving way are regarded
  as important, however, date of milling is not a
  key factor.
• Rice of good taste is estimated by means of
  luster, transparency and existence of
  half-crushed rice, however, size and color are
  not considered as prime factors.

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4) Evaluation of brand rice

• Ordered by brand recognition
• 1) King 2) Cheolwonotaemi 3) Rice of
  Kanghwa island
• Because information for taste of rice is based
  on personal information that acquires
  individually such as surroundings person 44,
  seller inducement 25, than objective information
  
• There is royalty to a certain brand not because
  of much preference, but because of constraints of
  distribution.
• Therefore, there is little firmly formed royalty
  to rice.
• Comparing to royalty to other food (Shin
  noodle-83 points, Haepyo oil of bean-80 points),
  there are low brand recognition point (Yicheon
  rice-30, Otaemi-23 points), according to a study
  of Rural Development Adminstration (2003)

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5) Purchasing Intention to imported rice and
high quality rice

• Willing to purchase the imported rice 54
• willing to purchase when price of imported rice
  is low and quality of that is good 44
• willing to purchase without considering price if
  imported rice has good quality 9
• - the more income, the less willing to buy
  imported rice

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• Recognition of certified and functional rice
  71
• Recognition of environment-friendly rice, washed
  rice, instant milling rice half of response
• Recognition of perfect rice 16
• - the more income, the higher recognition
  especially in environment-friendly rice and
  functional rice (doubled in recognition of higher
  income )
• - Few consumer understands what certified
  rice means, many consumer have high distrust in
  environment-friendly rice.
• high willing to purchase certification of
  environment-friendly(76), high quality(75) rice
• Low willing to purchase washed rice, perfect
  rice
• 66 of consumer think that taste ordering mark is
  needed and shows distrust of current notice
  system with difficulty in gathering correct
  information of rice.

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5. Purchasing trends in eating out industries
1) Price of purchasing price of eating out
industry
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2) Purchasing behavior of rice

• Restaurants and food companies usually purchase
  rice at the unit of 20Kg
• - food companies purchase rice weekly (35 of
  food companies)
• Restaurants purchase 23 times in a week (38 of
  restaurants)
• 54 of food companies purchase rice via
  suppliers (or vendors)
• 55 of restaurants purchase rice directly
  without help of intermediaries.
• 42 of restaurants purchase rice via suppliers
  (or vendors).
• - Among the restaurants that have direct
  purchase, 62 of them get rice near stores
  while 22 of them from big discount store.
• Recent 3 months period survey reveals that more
  than half of interviewers said that purchase
  only one type of rice, and rest of them said that
  they purchase 23 types of rice.

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• Quality and price consistency are important, but
  food safety is not a key factor.
• The portion of retailers as a supplier will be
  reduced
• For food companies other than restaurants,
  engagements with warehouse type discount stores
  and direct purchase will be increased.
• For restaurants, engagements with big discount
  stores and suppliers (or vendors) are to be
  increased.
• In the case of opening the rice market, 65 of
  interviewers said that they will purchase
  imported. However, if the quality of both
  imported rice and domestic rice is similar,
  acceptable price of imported rice will be 80 of
  that of domestic rice.

3) Factors to be considered when purchasing rice
4) Prospective of purchasing behavior and
purchasing intention of imported rice
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6. Policy directions for encouraging rice
consumption

• Need to differentiate the consumer group which
  give high weight to quality of food such as taste
  and safety and the other, low income group which
  give high weight to price and would purchase
  imported rice.
• To encourage the improvement of quality of
  domestic rice, it is essential to coordinate
  production capabilities for high-quality rice and
  supply chain managements as well as to encourage
  labeling and marketing improvement to obtain
  creditability from consumers.
• Need to promote education for quality management
  specially focused on the stage of consumption
  such as the length of good taste and storage
  methods, etc.

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• Development and popularization of Korean menu
  using domestic rice and promotion of domestic
  rice consuming companies
• Increasing quality of government supporting rice
  for school lunch and supporting for broadening
  traditional meals.
• The more young, the more reluctant to eat
  breakfast, promoting of eating breakfast is
  important to increase rice consumption.
• To keep successive campaign for breakfast using
  rice to develop the easy-to-preparing breakfast
  using rice to propagate convenient rice menu for
  breakfast .

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Thank you