Behavior of Rice consumption Behavior of Rice consumption in Koreain Korea

Behavior of Rice consumption Behavior of Rice consumption in Koreain Korea

Korea Rural Economic InstituteKorea Rural Economic Institute

Lee, Kye-ImLee, Kye-Im

- Contents -- Contents -

1. Change in rice consumption1. Change in rice consumption2. Comparison of rice consumption depending 2. Comparison of rice consumption depending

on age and consuming placeon age and consuming place3. Determinant factors of consuming rice3. Determinant factors of consuming rice4. Family behavior of consuming rice4. Family behavior of consuming rice5. Purchasing trends in food industries5. Purchasing trends in food industries6. Implication6. Implication

• per capita consumption decreased per capita consumption decreased 1970’s -0.3% →1980’s -1.0% →after 1990 -2.6%1970’s -0.3% →1980’s -1.0% →after 1990 -2.6%

1. Change in rice consumption1. Change in rice consumption

• home: home: 1980’s -1.4% after 1990 -3.7% decreasing rapidly1980’s -1.4% after 1990 -3.7% decreasing rapidly→→

0

20

40

60

80

100

120

140

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

4

6

8

10

12

14

16

18

20

consumption per capita

family consumption

kg/년 1,000won/month

• Diminishing household rice consumption is due to increased Diminishing household rice consumption is due to increased

eating-out and meat consumption by westernization and eating-out and meat consumption by westernization and

pursuing convenience and externalization of dietary lifepursuing convenience and externalization of dietary life

30.8

12.6 7.40%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1982 1992 2002

기타외식육류

빵 및 국수쌀

RiceRiceRestaurantRestaurant

MeatMeatBreadBreadNoodleNoodle

RiceRice

1) Rice consumption structure by age1) Rice consumption structure by age

1∼2 3∼6 7∼12 13∼19 20∼29 30∼49 50∼64 65∼g 221.2 73.2 139.8 183.7 210.9 214.7 243.1 260.3 235.6

kcal 823 272 520 683 784 799 904 968 876kcal 1975.8 1080.5 1448.3 1848.5 2101.9 2102.2 2196.3 1950.6 1619.8% 41.6 25.2 35.9 37 37.3 38 41.2 49.6 54.1

Meanage(year)

2. 2. Comparison of rice consumption Comparison of rice consumption

by by age and consuming placeage and consuming place

1∼2 3∼6 7∼12 13∼19 20∼29 30∼49 50∼64 65<=breakfast 63.3 27.8 41.2 49.8 50.6 51.4 68.2 84.1 83.2

lunch 78.4 24.5 46.2 65 80.6 83.2 86.5 88.3 74.8dinner 77.9 27.4 51 66.6 72.6 75.5 87 89.2 79.9snack 1.5 1.1 1 0.7 1.3 3 1.6 1.5 0.7

nationwide

age (year)

• over 50’s : regular 3 meals per a dayover 50’s : regular 3 meals per a day

10~40’s : little breakfast or substituted by bread10~40’s : little breakfast or substituted by bread

- Amount of breakfast is more than that of lunch by 30g- Amount of breakfast is more than that of lunch by 30g

s chool, kindergarten5%

workplace7%

res taurant19%

etc0%

family69%

2) Rice consumption structure by consuming place2) Rice consumption structure by consuming place

• 69% of rice consumption as a main dish is consumed at home69% of rice consumption as a main dish is consumed at home

•Source : National Statistical Office, Survey on Household Economy(2002, Source : National Statistical Office, Survey on Household Economy(2002,

33,119 samples) 33,119 samples)

3. 3. Determinant factors of rice consumptionDeterminant factors of rice consumption

• Expenditure on rice = f(income, social demographic Expenditure on rice = f(income, social demographic

characteristics, opportunity cost of housewife)characteristics, opportunity cost of housewife)

• Ratio of non consumption household 37% Ratio of non consumption household 37%

(double-hurdle model)(double-hurdle model)

• coefficient of opportunity cost of housewife: (-), coefficient of opportunity cost of housewife: (-),

decreasing income elasticity of rice consumptiondecreasing income elasticity of rice consumption

: 0.24(1982) →0.16(2002): 0.24(1982) →0.16(2002)

4. Family behavior of rice consumption 4. Family behavior of rice consumption

1) Trend of rice consumption1) Trend of rice consumption

• 62% of urban households purchase at market 62% of urban households purchase at market • 76% of rice consuming households go market in person, 76% of rice consuming households go market in person, 21% of them use the telephone, and 1% of them use the 21% of them use the telephone, and 1% of them use the InternetInternet• Although 45,000~48,000won per 20kg is in general, there Although 45,000~48,000won per 20kg is in general, there are obvious differences by the level of income are obvious differences by the level of income

2 millionincome

2~3 3~4 4~5 Total

~420 hundreadwon

9.4 3.7 3.9 2.5 4.6

420~450 26 19.4 12.7 3.3 15450~480 30.2 30.6 29.4 16.4 26.4480~510 20.8 22.4 20.6 18 20.5510~550 7.3 14.9 23.5 28.7 18.9550~600 3.1 6 7.8 21.3 9.9600~660 1 2.2 2 6.6 3.1

660~ 2.1 0.7 0 3.3 1.5 100 100 100 100 100

• rice purchasing place : Near rice market(21%), rice purchasing place : Near rice market(21%), Big discount store(21%), Big discount store(21%), NACF market(18%), NACF market(18%), General supermarket(18%)General supermarket(18%)

• 80% of purchaser choose 20kg, 12% of them select 10Kg80% of purchaser choose 20kg, 12% of them select 10Kg

• Rice purchased is consumed for 1 to 1.5 months generally, there are Rice purchased is consumed for 1 to 1.5 months generally, there are

24% of household for over 2 month 24% of household for over 2 month

• When purchasing rice, 49% of purchasers choose other brandsWhen purchasing rice, 49% of purchasers choose other brands

and 41% of purchaser buy same brand.and 41% of purchaser buy same brand.

Reason

Near rice market, General supermarketNear rice market, General supermarket: : convenient deliveryconvenient deliveryNACF market, Department store NACF market, Department store :: creditable qualitycreditable quality Big discount store Big discount store :: low price, one stop shoppinglow price, one stop shopping

• Flavour(45.4%),Price(27.2%), Safety(20.5%)Flavour(45.4%),Price(27.2%), Safety(20.5%)

• Flavour and safety become the standard of selecting Flavour and safety become the standard of selecting

rice according to increasing income rice according to increasing income

Price Flavour Safety Convenientpurchsing

Nutrient etc

43.0 31.0 17.0 6.0 2.0 1.0 100.0

26.7 46.7 18.5 3.0 3.7 1.5 100.0

26.7 43.8 23.8 4.8 1 100

15.4 56.9 22.8 3.3 1.6 100

27.2 45.4 20.5 4.1 2.2 0.6 100

Considering FactorsTotal

under 2 millionwon

43 31 17 6 2 1 100

2~3 36 63 25 4 5 2 135

1053~4 28 46 25

123over 4 19 70 28

463Total 126 210 95

Income

19 10 3

4 2

5 1

2) Standard for Rice Choice2) Standard for Rice Choice

• There are some positive response that rice of high price has good taste 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 simi(58.1%) and there are taste difference by brand among rice that has simi

lar price (45.3%)lar price (45.3%)

• As a determinant factors of taste of rice, the way of cooking, produced As a determinant factors of taste of rice, the way of cooking, produced

area, processing method, cultivating skill and reserving way are regarded area, processing method, cultivating skill and reserving way are regarded

as important, however, date of milling is not a key factor.as important, however, date of milling is not a key factor.

• Rice of good taste is estimated by means of luster, transparency and eRice of good taste is estimated by means of luster, transparency and e

xistence of half-crushed rice, however, size and color are not considered xistence of half-crushed rice, however, size and color are not considered

as prime factors.as prime factors.

3) Consumers’ evaluation to quality and price of rice3) Consumers’ evaluation to quality and price of rice

• Ordered by brand recognition Ordered by brand recognition : 1) King – 2) Cheolwonotaemi – 3) Rice of Kanghwa island: 1) King – 2) Cheolwonotaemi – 3) Rice of Kanghwa island

• Because information for taste of rice is based on personal information that acBecause information for taste of rice is based on personal information that acquires individually such as surroundings person 44%, seller inducement 25%, thquires individually such as surroundings person 44%, seller inducement 25%, than objective information an objective information •There is royalty to a certain brand not because of much preference, but becausThere is royalty to a certain brand not because of much preference, but because of constraints of distribution.e of constraints of distribution.• Therefore, there is little firmly formed royalty to rice.Therefore, there is little firmly formed royalty to rice.

• Comparing to royalty to other food (Shin noodle-83 points, Haepyo oil of bean-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 po80 points), there are low brand recognition point (Yicheon rice-30, Otaemi-23 points), according to a study of Rural Development Adminstration (2003)ints), according to a study of Rural Development Adminstration (2003)

4) Evaluation of brand rice4) Evaluation of brand rice

• Willing to purchase the imported rice : 54%Willing to purchase the imported rice : 54%• willing to purchase when price of imported rice is low and quality of that iwilling to purchase when price of imported rice is low and quality of that i

s good : 44%s good : 44%• willing to purchase without considering price if imported rice has good quwilling to purchase without considering price if imported rice has good qu

ality: 9% ality: 9%

- the more income, the less willing to buy imported rice - the more income, the less willing to buy imported rice

Response samle ratio(%)I do not want to buy imported rice 269 44.5

only if imported price is lower than that ofdomestic rice, I would like to purchase it 6 1

Only if quality is good, I would like topurchse imported rice 56 9.3

When price and quality of imported rice issuperior to domestic rice, I would like to

purchase it263 43.5

I do want to purchsse imorted rice 1 0.2etc 9 1.5

(no response) 4 Total 610 100

5) Purchasing Intention to imported rice and high quality rice5) Purchasing Intention to imported rice and high quality rice

Recognition of certified and functional rice : 71%Recognition of certified and functional rice : 71%Recognition of environment-friendly rice, washed rice, instant milling ricRecognition of environment-friendly rice, washed rice, instant milling rice : half of response e : half of response Recognition of perfect rice : 16%Recognition of perfect rice : 16% - the more income, the higher recognition especially in environment-fr- the more income, the higher recognition especially in environment-friendly rice and functional rice (doubled in recognition of higher income )iendly rice and functional rice (doubled in recognition of higher income ) - Few consumer understands what certified rice means, many consu- Few consumer understands what certified rice means, many consumer have high distrust in environment-friendly rice.mer have high distrust in environment-friendly rice.

high willing to purchase : certification of environment-friendly(76%), high high willing to purchase : certification of environment-friendly(76%), high quality(75%) ricequality(75%) rice Low willing to purchase : washed rice, perfect riceLow willing to purchase : washed rice, perfect rice

66% of consumer think that taste ordering mark is needed and shows di66% of consumer think that taste ordering mark is needed and shows distrust of current notice system with difficulty in gathering correct informastrust of current notice system with difficulty in gathering correct information of rice. tion of rice.

5. Purchasing trends in eating out industries5. Purchasing trends in eating out industries

1) Price of purchasing price of eating out industry1) Price of purchasing price of eating out industry

MealServing

company

Restau-rant

under42,000won

4.7 4.3

42,000∼ 45,000 53.1 50.845,000∼ 48,000 29.7 29.748,000∼ 51,000 10.9 11.951,000∼ 55,000 1.6 1.655,000∼ 60,000 - 1.160,000∼ 66,000 - 0.5

over66,000won

- -

Total 100 100

• Restaurants and food companies usually purchase rice at the unit of 20Kg Restaurants and food companies usually purchase rice at the unit of 20Kg

- food companies purchase rice weekly (35% of food companies)- food companies purchase rice weekly (35% of food companies)

• Restaurants purchase 2~3 times in a week (38% of restaurants)Restaurants purchase 2~3 times in a week (38% of restaurants)

• 54% of food companies purchase rice via suppliers (or vendors)54% of food companies purchase rice via suppliers (or vendors)

• 55% of restaurants purchase rice directly without help of intermediaries.55% of restaurants purchase rice directly without help of intermediaries.

• 42% of restaurants purchase rice via suppliers (or vendors).42% of restaurants purchase rice via suppliers (or vendors).

- Among the restaurants that have direct purchase, 62% of them get rice - Among the restaurants that have direct purchase, 62% of them get rice

near stores while 22% of them from big discount store. near stores while 22% of them from big discount store.

• Recent 3 months period survey reveals that more than half of interviewers 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 said that purchase only one type of rice, and rest of them said that they

purchase 2~3 types of rice.purchase 2~3 types of rice.

2) Purchasing behavior of rice2) Purchasing behavior of rice

• Quality and price consistency are important, but food safety is not a key Quality and price consistency are important, but food safety is not a key

factor. factor.

• The portion of retailers as a supplier will be reducedThe portion of retailers as a supplier will be reduced

• For food companies other than restaurants, engagements with warehouse For food companies other than restaurants, engagements with warehouse

type discount stores and direct purchase will be increased.type discount stores and direct purchase will be increased.

• For restaurants, engagements with big discount stores and suppliers (or For restaurants, engagements with big discount stores and suppliers (or

vendors) are to be increased.vendors) are to be increased.

• In the case of opening the rice market, 65% of interviewers said that they 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 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 domestic rice is similar, acceptable price of imported rice will be 80% of that

of domestic rice.of domestic rice.

3) Factors to be considered when purchasing rice3) Factors to be considered when purchasing rice

4) Prospective of purchasing behavior and purchasing 4) Prospective of purchasing behavior and purchasing intention of imported riceintention of imported rice

6. Policy directions for encouraging rice consumption Need to differentiate the consumer group which give high Need to differentiate the consumer group which give high

weight to quality of food such as taste and safety and the other, weight to quality of food such as taste and safety and the other,

low income group which give high weight to price and would low income group which give high weight to price and would

purchase imported rice.purchase imported rice. To encourage the improvement of quality of domestic rice, it is To encourage the improvement of quality of domestic rice, it is

essential to coordinate production capabilities for high-quality essential to coordinate production capabilities for high-quality

rice and supply chain managements as well as to encourage rice and supply chain managements as well as to encourage

labeling and marketing improvement to obtain creditability from labeling and marketing improvement to obtain creditability from

consumers.consumers. Need to promote education for quality management specially Need to promote education for quality management specially

focused on the stage of consumption such as the length of good focused on the stage of consumption such as the length of good

taste and storage methods, etc.taste and storage methods, etc.

Development and popularization of Korean menu using Development and popularization of Korean menu using

domestic rice and promotion of domestic rice consuming domestic rice and promotion of domestic rice consuming

companies companies

Increasing quality of government supporting rice for school Increasing quality of government supporting rice for school

lunch and supporting for broadening traditional meals.lunch and supporting for broadening traditional meals.

The more young, the more reluctant to eat breakfast, The more young, the more reluctant to eat breakfast,

promoting of eating breakfast is important to increase rice promoting of eating breakfast is important to increase rice

consumption.consumption.

To keep successive campaign for breakfast using rice; to To keep successive campaign for breakfast using rice; to

develop the easy-to-preparing breakfast using rice; to propagate develop the easy-to-preparing breakfast using rice; to propagate

convenient rice menu for breakfast .convenient rice menu for breakfast .

Thank you