Background
The perpetually changing consumer needs for convenience and simplicity have had a great influence over various fields of industry. For example, the recently developed robot cleaner that could ease our daily chores and the Internet of Things (IoT) that enables people to remotely control home electronic appliances add more convenience to busy urban life. The consumer's needs for such convenience and simplicity have brought many changes to the food market as well. Moreover, structural changes in society including a larger number of single-person households, increased participation of women in economic activities, aging phenomenon, and the five-day work and school weeks have accelerated the changes in the food market, stirring up interest in food products that offer convenience and simplicity. This trend has consequently led to the creation of a new food market sector known as HMR (Home Meal Replacement). HMR became an international trend of the food market in the 21st century. Korea also has joined the global trend with food producers, distributors and the restaurant industry making headways into HMR. As HMR market continues to grow, a large number of studies on HMR have been made continuously. However, previous studies have focused only on the consumption behaviors and selection attributes of customers. There is very little research conducted on the HMR market structure, production, distribution and consumption from the industrial perspective. Studying the market structure can provide a whole lot of basic information about the HMR industry. Also, the current market scale estimation only depends on media reports that quote from unreliable industry sources.
This study aims at suggesting policy agendas on the HMR industry by classifying the industry into production, distribution and consumption to analyze the status and review the strengths, weaknesses and opportunities and risk factors.

Method
In order to investigate the status of the HMR industry and cases from overseas, documentary research, statistical and quantitative analyses, and investigation of businesses and customers were carried out. The results were compiled in the form of a manuscript under guidance from experts.
Through documentary research, an expanded definition and range of HMR were set based on the various definitions and ranges suggested by previous studies, applying the current dietary life pattern. To identify the status of the HMR industry, raw data of statistical research focusing on the relatively standardized and conceptualized processed food and HMR were analyzed. For analyzing the status of the HMR industry including its production and distribution, the survey on ‘Production of Food and Food Additives’ by the Ministry of Food and Drug Safety; ‘the Census on Establishments’, ‘Mining and Manufacturing Survey’, and ‘Food Grain Consumption Survey’ by Statistics Korea; and ‘Survey on Raw Material Consumption in Each Food Industry Sector’ by the Korea Agro-Fisheries Trade Corporation were used. In terms of consumption, Consumption Data on Instant and Prepared Foods from the Food Information Statistics System (aTFIS) of the Korea Agro-Fisheries Trade Corporation; and POS Data on Prepared Rice were analyzed. In addition, this study conducted a survey of 100 instant and prepared food producers and 680 consumers nationwide.

Results and Implications
Korea's HMR industry continues to expand, recording an average annual growth rate of 9.7%. Small businesses with fewer than 10 employees accounted for only 71.9% of the entire food industry, showing progress in upsizing. The HMR industry also shows 4.9 persons of average employment coefficient showing a significant effect of job creation. The added value ratio of the HMR industry is 42.4%, which is higher than the total added value ratio of the food and beverage manufacturing industries, which is 32.6%. The operating profit ratio of the HMR industry is about 10.5%, which is higher than the average operating profit ratio of other industries in Korea, 8.3%. In addition, the use ratio of domestic raw materials for the HMR industry (56.9%) was shown to be higher than the total use ratio of domestic raw materials in food and beverage manufacturing industries (32.2%) in Korea. However, there are issues such as problems with packaging and storage, underdeveloped R&D for processing techniques, an oligopolistic structure dominated by a few major manufacturing companies, unfair business practices forced upon supply distributors, and need for professional manpower training and stable supply and demand of raw materials.
It is necessary to develop packaging, storage and processing techniques to secure the competitiveness of the HMR industry from a long-term perspective. The development of packaging, storage and processing techniques will ensure preservation of freshness, nutrition and flavor of foods in which consumers are interested. Better packaging, storage and processing will also contribute to industrial efficiency. Furthermore, it can be a part of the environmental plan and help the domestic food industry enter overseas markets. However, since the finance, manpower and R&D capacity of small-scaled companies are insufficient to develop packaging, storage and processing techniques by themselves, it is suggested that a cooperative system should be established among small and medium sized companies that produce similar items. Alternatively, a large corporation within the same field may be designated as an R&D mentor to contribute to technology development and process and facility improvement. This will encourage mutual growth of large corporations and small and medium sized companies. While the use ratio of domestic raw materials of the HMR industry is higher than the total use ratio of domestic raw materials in food and beverage manufacturing industries, it is confirmed that the HMR industry has difficulties in reliably securing agricultural raw materials. It is necessary to support HMR companies that use domestic raw materials by providing funds for their agricultural raw material purchase through a short-term low interest loan project or building and promoting a network for agricultural raw material supply.
The Korean HMR market is currently monopolized by a few major manufacturing companies and large retail companies. This phenomenon may facilitate industrial efficiency and consumer benefits in the short run but it will have an adverse impact on the development of the whole society and cause industrial inequalities. Therefore, it is necessary to investigate and control the unfair transaction practices and establish a fair trade order. It is also mandatory to secure the foundations for small and medium companies to grow together. Most HMR products are precooked for consumers' convenience and are made of various ingredients. Thus there is a possible risk of food contamination, making high standards of food sanitation necessary. In order to obtain consumer confidence, a place-of-origin indication system and food labeling system should be gradually strengthened, while giving due consideration to the conditions of domestic HMR manufacturing companies that use imported agricultural raw materials due to the unstable supply of domestic agricultural raw materials and lower price competitiveness.

Researchers: Park Seongjin, Choi Jongwoo and Heo Seongyoon
Research period: 2015. 1. ~ 2015. 10.
E-mail address: seongjin20@krei.re.kr