Do not count your chickens before they hatch.
Global poultry producers hoping to cash in on South Korea’s craze for fried chicken and beer face a market crowded with local birds that have clipped prices and profits for South Korean growers.
The popularity of the combination, known as chimaek — a mash-up of chicken and maekju, the Korean word for beer — has boomed in recent years, fueled by its appearance in a hit South Korean TV drama and an explosion of restaurant chains.
Photo: Reuters
Chimaek stores now dot South Korea and their ubiquitous delivery services shuttle freshly fried chicken and beer to homes, offices and picnics.
At a Seoul outlet of a popular barbecue chain, Kim Chang-hoo said he and his colleagues had planned to go to a sushi restaurant for a company dinner, but decided instead on chimaek.
“I cannot help think of chicken, even when I’m eating sushi,” Kim, 24, said. “I don’t know if it’s just me, but chicken always comes to my mind and is always delicious.”
The craze has pitted domestic chicken producers in an increasingly tough battle for market share, prompting an oversupply and a drop in farm prices.
Now imports are set to rise as South Korea lifts bans on overseas suppliers who are attracted by still low per capita consumption rates.
South Koreans ate 14.2kg of poultry meat each last year, a near three-fold increase since 1990 according to Organisation for Economic Co-operation and Development data, but only half the global average of 28.6kg per person.
South Korea’s market for chicken is expected to grow 5 percent to 1.01 million tonnes this year and a further 3 percent next year, according to the US Department of Agriculture, boosted by the chimaek craze.
Supply is currently dominated by the country’s three biggest producers — Harim Co Ltd, Dongwoo Co Ltd and Maniker Co Ltd.
All have seen their earnings hit in the first half of this year as they ramp up production to secure market share.
Harim managing director Park Ju-no acknowledged producers were engaged in a “game of chicken,” each holding a potentially dangerous course in the hope their rivals flinch first.
“We think it’s more crucial to focus on quality differentiation to survive instead of adjusting production, even though it contributes to a glut,” Park said.
Park expects the imbalance to ease in the second half as the number of slaughtered chickens drops in summer, but sees the market oversupplied again next year as imports from the US and Thailand resume.
In July, Asia’s fourth-largest economy lifted a ban on chicken imports from the US, imposed due to a bird flu outbreak last year.
It is next month likely to resume imports from Thailand, banned since a 2004 bird flu outbreak, according to the South Korean Animal and Plant Quarantine Agency.
Overall, South Korean chicken imports are expected to rise 9 percent to 130,000 tonnes this year, and a further 8 percent next year, due to the resumption of US chicken imports, the department’s report showed.
Analysts said the increase in chicken imports could squeeze domestic producers with lower prices. US suppliers might also find conditions challenging.
“It’s going to be a tougher market, because the US only had to compete against Brazil before, but now there are more competitors, like Denmark and sooner or later Thailand,” said Jenis Bae, manager at KTSC, which has imported US chickens for almost 20 years.
Still, the competition is good for consumers and restaurants drawn to the chimaek boom.
Even global giant Kentucky Fried Chicken (KFC) recently opened its first “KFC Chimaek” outlets in South Korea, offering set menus, such as two pieces of fried chicken, cheese fries and a glass of draft beer for 7,500 won (US$6.60).
Major South Korean franchises are now expanding their overseas stores, particularly in China, where the TV show My Love From the Stars is wildly popular and its heroine’s chimaek cravings strike a chord with viewers.
“We learned the food culture of South Korea from [South] Korean soaps,” Gu Chenghu said at a chimaek restaurant in Shanghai. “Also, many young people are willing to try something fresh. So it’s very popular.”
Genesis BBQ, South Korea’s top fried chicken franchise, now has 350 stores abroad in 30 countries, including China and the US.
It wants to grow to 50,000 stores by 2020, company director Kwak Sung-kwon said.
“Our aim is to have more stores globally than McDonald’s,” he said.
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
TARIFF CONCERNS: The chipmaker cited global uncertainty from US tariffs and a weakening economic outlook, but said its Singapore expansion remains on track Vanguard International Semiconductor Corp (世界先進), a foundry service provider specializing in producing power management and display driver chips, yesterday withdrew its full-year revenue projection of moderate growth for this year, as escalating US tariff tensions raised uncertainty and concern about a potential economic recession. The Hsinchu-based chipmaker in February said revenues this year would grow mildly from last year based on improving supply chain inventory levels and market demand. At the time, it also anticipated gradual quarter revenue growth. However, the US’ sweeping tariff policy has upended the industry’s supply chains and weakened economic prospects for the world economy, it said. “Now
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS