[The Flash Trend Era]② New Products Riding the "Trend," the Costly Price of "FOMO"

The Asia Business Daily Survey of 25 Domestic Food and Restaurant Companies
Over 60% Say "Maintaining Brand Freshness Over Sales"
Rising Marketing and Promotion Costs... Most Raw Materials Are Disposed Of

As the product life cycle of food items continues to shorten, domestic food companies are facing increasing pressure. Even if they cannot immediately boost sales, companies are jumping on trends to avoid the stigma of falling behind, but this often leads to unexpected marketing and promotional expenses, as well as accumulating unsold inventory.

According to a survey conducted by The Asia Business Daily on May 4, targeting product development executives at 25 domestic food and restaurant companies, 44% of respondents said that "trend-based products" accounted for 10% to 30% of their new products in the past year. Another 32% answered "less than 10%." Only four companies responded "over 50%," and these were companies that frequently launched trendy items such as matcha or ube products.

6 out of 10 Companies Say "Maintaining Brand Freshness Over Sales"... So-Called "FOMO" Product Launches

When asked about the most important criteria for distinguishing between short-lived fads and long-term trends during product development, most cited "the amount of references on social networking services (SNS) and consumer search data." Other common responses included "the extent of spread and establishment in the restaurant and cafe industry," and "the potential to expand the target audience to all age groups." The culture, especially among younger consumers, of posting trendy foods such as matcha, Duzzonku, ube, and butter rice cakes on SNS is driving these trends, prompting companies to pay close attention to such phenomena.

While companies continue to launch products that reflect the latest trends, few reported a significant sales impact. Excluding one company that declined to answer, over 60% of respondents said they release trend-inspired products "more for maintaining brand freshness than for sales." This is interpreted as being driven by a kind of "FOMO (Fear Of Missing Out)"—the fear of being left behind in the eyes of consumers. There were also responses—mainly from restaurant chains—that "the short-term sales boost is significant" (20.8% response rate).

When new products are pouring in, retailers get busier as well. Among them, convenience stores are the most responsive to trends. Looking at the average number of new food items introduced per month in the first quarter (January to March) by the three major convenience store chains in Korea—CU, GS25, and 7-Eleven—the figure increased steadily: around 700 products in 2024, 770 last year, and 790 this year. An industry insider explained, "With limited shelf space, as the number of new products increases, their shelf life inevitably shortens. With more trend-based products being launched, the product turnover rate is much faster than before."

Food and Restaurant Companies Suffering in Silence... Rising Costs and Inventory Disposal Headaches

With the sudden rush to launch new products, food and restaurant companies are having to shoulder various expenses. Since there is a focus on marketing and new product development, production volumes tend to be smaller, which drives up related costs. If companies have to urgently secure raw materials or launch a surprise release but fail to capture consumers' interest, both raw materials and finished products end up as inventory.

When asked about the types of costs that have increased as a result of responding to trends, executives from the 25 surveyed food and restaurant companies most frequently cited "marketing and promotion expenses." Since consumers' attention spans for these products are short, intensive marketing is required before and after launch. When asked about the biggest management challenges faced in adapting to short trend cycles, "dispersion of resources such as marketing" received the highest response rate, surpassing "the burden of managing raw materials and inventory" and "decreased process efficiency due to changes in manufacturing lines."

Regarding how they dispose of leftover raw material inventory from trend-inspired new product production, nearly 70% (multiple responses allowed) said "disposal and write-off according to quality control standards." One food manufacturing executive explained, "We try to plan production as much as possible in advance to avoid leftover inventory," but added that "the actual disposal method varies depending on the situation."

In fact, during the Duzzonku craze, the prices of core ingredients such as pistachio and kadaif surged, leading to higher costs and even difficulties in sourcing the raw materials themselves. As local bakeries and cafes rushed to join the Duzzonku trend, they also scrambled to secure these ingredients. When the trend abruptly cooled, they were left with unsold inventory, causing management headaches and forcing them to sell off excess stock at low prices through secondhand markets. An industry insider commented, "Large food manufacturers and restaurant chains may not openly discuss it, but their situation is probably not much different. In such cases, they look for alternative uses, but often end up with no option but to dispose of the inventory."

This content was produced with the assistance of AI translation services.