As more consumers become price sensitive due to high inflation, fixed-price household goods retailer Asung Daiso Co. is emerging as a new sales channel for the food industry. In the food category, which had focused on snacks such as cookies, drinks, and cup ramen, items now include broth bases and sauces, instant rice, and side dishes. Food companies are rolling out products with adjusted sizes and packaging to fit Daiso's 1,000–5,000 won price system, expanding contact points with consumers.
According to the food and retail industries on the 26th, major food companies such as CJ CheilJedang(097950) and 대상, Dongwon F&B, and OTOKI(007310) are currently supplying products to Asung Daiso Co.. Rather than bringing in the exact products sold at big-box stores or online malls, they have reduced volumes or changed packaging formats to match Daiso's fixed-price sales model.
Food sales at Asung Daiso Co. are also growing quickly. According to Asung Daiso Co., sales in the food category in the first half of this year rose 30% from a year earlier. As more consumers buy food along with household items—long seen as inexpensive at Daiso—food is taking hold as a new growth category.
This year, the range of foods on sale has diversified. OTOKI is selling cup ramen such as 3-minute curry, Jin Ramen, Jin Bibim-myeon, Jin Jjambbong, and Yeul Ramen, along with instant rice and sauces at Asung Daiso Co.. CJ CheilJedang is focusing on coin broth bases, while Daesang is offering Cheongjeongwon pouch-type sauces and Miwon seasoning, as well as anchovy pho noodles. Dongwon F&B is also selling Yangban stir-fried kimchi cans, instant rice, and laver bugak (seaweed crisps).
Recently, the category has expanded even to desserts. Low-sugar dessert maker Lalasweet, in collaboration with Asung Daiso Co., is selling zero-calorie ice cream and low-sugar choco bars and yogurt bars at select stores. In effect, Daiso's food shelves—once mostly limited to cookies and ramen—are rapidly expanding to include home-cooking ingredients, ready-to-eat meals, and desserts.
This shift also appears in purchasing deep data from market research firm Embrain Trend Monitor. From June last year to on May this year, the estimated one-year purchase amount in Daiso's food and beverage category was 182.38 billion won, up 14% from a year earlier. This figure is an estimate based on receipts from a 20,000-person panel and may differ from Asung Daiso Co.'s actual sales. Cookies still account for the largest share of total purchases. Estimated purchases for boxed cookies were 45.88 billion won, and for bagged cookies 42.51 billion won, with the two items together making up 48.5% of the total.
However, in terms of sales growth rates alone, items usable for home meals or meal prep are showing a more pronounced rise. Purchases of dried goods and nuts increased 73.1% from a year earlier, seasonings 68.4%, instant ready-to-cook foods 47.7%, and canned foods and side dishes 40.7%. Embrain analyzed that Asung Daiso Co. is expanding beyond snacks into a channel where consumers buy simple foods and everyday food items together.
◇ Daiso serves as a test bed for foods
One reason food companies are focusing on Asung Daiso Co. is the low purchase barrier. Many of the foods sold at Daiso are small-portion products priced in the 1,000–3,000 won range. For consumers, even first-time products can be purchased with little burden.
For manufacturers, this price structure can be used to promote brands and new products. An industry official said, "By leveraging nationwide offline stores, we can increase product exposure, while reducing the volume and configuration of existing products so consumers can try them at a relatively low price," adding, "Asung Daiso Co. is effectively serving as a 'low-priced food test bed' where food companies can gauge consumer response."
The rise in one- to two-person households, along with the spread of small-portion consumption aimed at buying only what is needed, also favors the expansion of Daiso's food offerings. Amid high inflation, demand to lower the amount spent at one time is also boosting sales of foods priced in the 1,000–3,000 won range.
Of course, Daiso's price system, which does not exceed 5,000 won, can be a constraint for food companies. Premium products that use high-priced raw materials are difficult to sell, and to meet fixed prices, companies must adjust volume, product composition, or packaging.
Even so, the food industry's view of Asung Daiso Co. is changing. An industry official noted, "In the past, big-box stores, convenience stores, and online malls were the main sales channels; now, Daiso has also established itself as an independent distribution channel worthy of planning and supplying dedicated products." As consumers continue to seek value for money and small portions amid high inflation, competition among food companies to secure shelf space at Daiso is expected to intensify.