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aT Gives Wings to Exporting BusinessesIntroducing Export Support Projects of aT

aT is engaged in various projects aiming to promote exports of Korean food products. They include the export market diversification project, localization support project, Miraekeul K-Food project, and the provision of export information. Below, Korea Agrafood introduces our readers to these projects.

○ Efforts to Diversify Export Markets
Korean farm food exports focus heavily on Japan, China, and the US. As of 2016, the three countries take up over 50% of Korean exports of agricultural and fishery products (Japan 22.06%, China 17.15%, and the US 11.14%). This means that any disruption of exports to these three countries due to political, economic, disease-related, or other issues inadvertently puts Korean farmers and exporting companies in danger.

For this reason, aT is collaborating with MAFRA (the Korean Ministry of Agriculture, Food, and Rural Affairs) with the aim of diversifying Korea’s export markets. The agency has dispatched members of AFLO (Agri-food Frontier Leader Organization) to thirteen countries including India, Brazil, South Africa, Kazakhstan, and Italy and is conducting various promotional activities there. AFLO, which started its work in the first half of this year, is already bringing about positive outcomes. Presentation of the first team’s performance report took place on August 28 and described the following achievements.

The AFLO team working with Yonsei Milk (a dairy company) was dispatched to South Africa and contributed to placing Korean soy milk on the shelves of SPAR stores, the largest local distributor. A joint project with Daesang (a kimchi exporter) yielded the first export of kimchi to India. An AFLO team’s assistance to business negotiations between Gwangcheon Laver and Italian buyers helped the company win an order.

aT is assisting Korean businesses advance into promising markets by supporting the development of products with prospective consumers preferences in mind and arranging export consultations with invited buyers from those countries. Baek Jin-seok, the Director of Food Exports at aT, said, “Diversifying the export market is indispensable for the continuous expansion of Korean food exports. aT will use all its available resources to secure a solid basis for exports through market diversification.”

○ Raising Awareness of Korean Food among Foreign Consumers
aT actively participates in fairs and exhibitions for the purpose of exploring overseas sales routes for Korean exporters and bringing international publicity to Korean food products. Particularly important is the K-Food Fair organized by aT. This year, the agency hosted the K-Food Fair in Tokyo in July, in New York and Shanghai in September, in Dubai in October, and in Jakarta in November. At each of them, aT arranged business consultations between Korean exporters and local buyers, distributors, and vendors. A total of 188 Korean exporters participated in the fair and achieved considerable success. In Japan, consultations between 48 Korean exporters and about 280 Japanese distributors, buyers, and vendors yielded contracts worth US$3 million. The fair in New York raked in US$41.55 million in sales negotiations and US$11 million in export contracts signed at the venue. The K-Food Fair in Shanghai attracted 130 Chinese buyers and 47 Korean exporters and recorded US$ 42.5 million in business negotiations.

In cooperation with Korean exporters, aT organized Korean food exhibitions at major food fairs held in targeted markets, such as Foodex Japan and SIAL China. A vegetarian food show promoting Korean vegetarian products and organized by aT at Suntec City Mall in Singapore drew significant attention from local consumers. Similar events designed to introduce Korean food products were hosted in emerging markets of Brazil, India, Malaysia, and Myanmar.

○ Assisting in the Development of New Products for Export

aT is carrying out the Miraecle K-Food project in partnership with MAFRA. The project aims to discover new products that can have a competitive edge in the global market. Currently, it focuses on fifteen items: Dangjo pepper, Shine Muscat grape, fermented brown rice, ginseng chips, processed sweet potato, dried fruit, peeled ginkgo nuts, freeze-dried baby food, rice puffs, frozen thistle, black raspberry juice, ginseng sprouts, barley, dew shiitake mushrooms, and citron beverage concentrate.

Dangjo pepper has already made a successful landing in the Japanese market. Earlier this year, aT partnered with Kyushu University in Japan to test the functionality of the pepper with respect to diabetes. The results confirmed the efficacy of Dangjo pepper and it is now available in all 210 stores of UNY, Japan’s third largest distributor. Selected in response to overseas consumers’ preference for seedless grapes that can be eaten without peeling, Shine Muscat grape is gradually gaining attention in China and Southeast Asia.

○ Providing Information to Exporters
aT offers to Korean companies the information on export markets. In June, aT held a presentation of export information project results for the first half of 2017. It included data on food export trends, requirements to advance to emerging markets, and changes in regulations on customs clearance, quarantine, and hygiene in major export destinations and suggested the coping strategies.

In April, aT published the 2016 Report on Food Trade Barriers, which is a guidebook to understanding the trade barriers in different countries and devising strategies to increase exports. In October, aT introduced its Guide to Prevention of Breaching the Chinese Trademarks and the Guide to Preventing Damages by Chinese Food Paparazzi. aT has also held a briefing session on issues in the ASEAN food market in 2017.

In addition, aT operates a trade information site, www.kati.net, which offers information on overseas consumption trends to Korean exporters, promotes Korean products to foreign buyers, and assists in conducting internet or mobile transactions.

○ Building a Robust Export Network
Through its 14 overseas offices, aT is pursuing MOUs (memorandum of understanding) with major international distributors and carrying out publicity and sales promotion campaigns for Korean food products. Every year, the agency organizes consultations between Korean exporters and the foreign buyers it invites to Buy Korean Food and other events. Furthermore, aT participates on average in sixty international food fairs each year, setting up exhibitions there to promote Korean products.

To stabilize the supply of Korean agricultural produce of uniform quality to foreign markets, aT is fostering export organizations that manage every step of the business from production to export of food (similarly to Zespri in New Zealand). In 2017, aT has been working with fourteen organizations engaged in strawberry, grape, and other businesses. There are also export associations which are formed by exporters to cooperate with each other. As of 2017, there are seventeen export associations in Korea, and aT helps them in the management of food safety and quality as well as joint marketing activities.

○ Helping the Settlement of Korean Food Products in Local Markets
When advancing to foreign markets, every company without sufficient information on the targeted market experiences difficulties in registering the trademark, creating and registering labels, overcoming non-tariff barriers, and other issues. aT helps such companies through a variety of localization support projects. This year, aT focused on the elimination of non-tariff barriers, the registration of trademarks, and the localization of labels. Korean exporters have received consultations on legal procedures, customs, and tariffs in destination countries, and the costs of the consultations were covered by aT. In addition, the agency supports up to 90% (up to KRW 10 million a year per company) of the costs of designing product labels, translating them into foreign languages, and registering the labels. The costs involved in registering trademarks overseas are also covered up to 90% (up to KRW 10 million a year per company).

This support is often crucial for the success of Korean food companies. For instance, Baksan, an alcoholic beverage supplier, was able to export its products to Thailand thanks to an aT localization support project. The company’s CEO, Huh Geuk-il, said, “It costs a minimum of KRW 2 million to have an alcoholic beverage enter a Thai supermarket, so it can be a burden to a small business.” Baksan received financial support through the Specialized Buyer Project and succeeded in advancing into a famous hypermarket in Thailand.

Another example is Korean rice snacks in the US. aT’s office in New York has helped rice snacks producers to improve packaging, create promotional materials, and find business partners in the local market. Also, considering that the US has the world’s largest gluten-free food market, aT also paid the costs of the chemical composition analysis necessary to obtain the gluten-free certification and helped in the promotion of gluten-free snacks. As a result, a Korean rice snack not only succeeded in acquiring the gluten-free certification, but also entered stores of America’s largest retailer, Walmart. CEO of Mammoth Bakery that makes the gluten-free rice snack, Shin Seong-beom said, “Thanks to a localization support project, we were able to obtain a large sales channel and the image of our product was enhanced.”

Korean exporters obtain detailed information on aT’s localization support project through aT’s website (www.at.or.kr) and aT’s Exporter Total Support System (global.at.or.kr). They can also seek advice through aT’s Trade Support Department (+82 61-931-0865). Importers’ inquiries are addressed by the respective aT offices abroad.

○ Support on the Ground: Korean Raspberry Reaches Indonesia

Koreans believe that bokbunja (Korean black raspberry) strengthens the bodily energy. In fact, it abounds with vitamins A and C and various minerals and thereby effective in fighting off fatigue, slowing aging, and reducing weight. However, the berry is little known outside of Korea, so it is not easy for it to enter foreign markets. Thanks to aT’s support to black raspberry exporters to Indonesia through a localization support project, the market is beginning to open.

When farm produce is exported to Indonesia, it must first be registered with Indonesia’s import food registration service ML. The process is highly complicated and considered a non-tariff barrier. That is why Food Star Global, an importer of Korean food into Indonesia, sought aT’s help through the Overseas Certification System Registration Support Project. Thanks to aT, the registration of Korean raspberry with ML was completed in December 2016 and US$ 30 thousand worth of black raspberry juice was shipped to Indonesia in January this year.

Nam Taek-hong, a manager of aT’s office in Jakarta, said, “Last year, a local importer showed interest in Korean raspberry juice, so we began to work on supporting its import and helped the product’s registration with ML.” He added, “ML registration is granted only after a product’s label, safety, and other aspects have been verified.”

Following the shipment, aT organized a large-scale promotion of black raspberry to Indonesian consumers who are not familiar with the fruit. With help of a professor in the Department of Family Medicine at the University of Indonesia, a national school, aT contributed articles explaining the effects of raspberry juice in major local newspapers. The agency also recruited power bloggers to promote the juice on social media such as Facebook, YouTube, and Instagram. Several tasting events were organized at upscale fitness centers.

The product appeared on a TV show featuring Indonesian celebrities. Sales promotions were held at large distributors, and guests of an event at the Korean embassy in Indonesia received the raspberries as a gift. The target of black raspberry export to Indonesia this year is US$ 100 thousand. aT expects that the export will increase further after promotions at popular local bars.

Nam said, “Raspberry juice is a stranger to Indonesians, but we will do our best to increase its exports through various promotional events.”

Lee Hyun Woo  leehw@agrinet.co.kr

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