[Weekender] Loconomy: Food makers flock to locally sourced ingredients

Latest retail trend helps boost farmhouses, appealing to young consumers craving for ‘limited items’

Still cut from McDonald's Korea's commercial film featuring the Jinju Pepper Cream Cheese Burger. (McDonald's Korea)

Food items made with locally sourced ingredients have emerged among food companies in Korea. This approach, which aligns with those companies’ corporate social responsibility efforts, supports economic growth in rural areas and offers unique experiences for consumers, collectively known as "loconomy."

On July 11, McDonald’s Korea launched the Jinju Pepper Cream Cheese Burger and Jinju Pepper Cream Cheese Muffin, both using peppers produced in Jinju, South Gyeongsang Province. The Jinju series is the fourth edition of McDonald’s Korea’s “Taste of Korea” program, which aims to boost the consumption of domestic agricultural products.

“Jinju is the top producer of greenhouse-grown peppers in Korea, thanks to its abundant sunlight and fertile soil, which allow it to supply high-quality peppers. The peppers from this region have fewer seeds and a crisp texture, making them a perfect match for our burgers,” said Yang Hyoung-keun, public affairs director of McDonald’s Korea.

“We aim to continuously use domestic ingredients to promote local sourcing and regional coexistence."

McDonald’s Korea emphasizes its endeavors toward coexistence with rural areas as the key to the Taste of Korea program. The company has introduced the Taste of Korea lineups since 2021, releasing regionally specialized menus under joint marketing with local governments.

According to the company, cumulative sales of the Taste of Korea items have surpassed 20 million units since its launch, with 743 tons of domestic agricultural products purchased. This year alone, approximately 5 tons of Jinju peppers were used for the project.

Loconomy items also draw a favorable response from consumers thanks to the experiences they offer, according to a survey by market tracker Trendmonitor in 2023, which collected responses from 1,000 people aged 15 to 59.

In the survey, eight out of 10, or 81.6 percent, reported having bought loconomy food items, citing the unique characteristics and experiences these items provide compared to regular products. The preference for loconomy items was particularly strong among those in their 20s and 30s, who reported that they primarily discovered them on social media. On the other hand, those in their 40s and 50s believed loconomy items were likely fresher due to their verified origins, although their support for these items was less strong than that of the younger generation.

Nonetheless, 80.3 percent of the total respondents said they are more willing to buy loconomy food items if released as exclusive editions, anticipating they will experience food ingredients from other provinces.

Promotional poster for Korean distiller Bohae's kelp soju called Dasi, Maju. (Bohae)

In addition to company-led efforts, loconomy food items can also be driven by local community initiatives. In April, domestic distiller Bohae released a special soju product featuring kelp -- an ingredient that the company explains reduces the bitter taste and harsh alcohol smell of soju, offering a smoother finish.

This kelp soju was a collaboration between the distiller and Wando-gun in South Jeolla Province. The county government gathered ideas for collaborative business items from community residents to support the area's economic growth and proposed the idea to the distiller. Although it is currently available only in Wando-gun, the distiller intends to expand its distribution area, with part of the sales proceeds donated to the local community.

The food industry also appreciates the benefits of these collaborations with local communities, as they enable reliable procurement of quality ingredients.

In June, the bakery giant SPC Group signed a partnership with Pyeongtaek City to develop products using rice harvested from the area. Under the agreement, SPC Group receives rice from high-quality farms connected through the city government and develops and manufactures rice-based bakery products, such as rice-made castella and chiffon cakes.

“Loconomy marketing aligns well with the needs of both local farms and companies. While farmers can secure stable sales channels, companies can enhance their product recognition and positive corporate image through loconomy products,” an SPC official said. "In particular, such partnership for loconomy products offers a reliable supply of high-quality ingredients.”

SCP Group's bread products made of rice produced in Pyeongtaek, Gyeonggi Province are displayed. (SCP Group)

Another industry official echoed a similar sentiment, highlighting that the loconomy initiative often provides diverse inspirations for developing their offerings.

“Starbucks has been launching loconomy items since 2016. Initially, it started as part of efforts to promote local coexistence, but we found that it also helps the company develop new products. Each region provides us with creative ideas for new recipes through their unique ingredients,” said an official from Starbucks Korea. Loconomy items from the company include the limited summer editions Mungyeong Omija Fizzio, Icheon New Rice Latte, Gongju Chestnut Latte and Goheung Yuja Jadoo Ade.

“Especially when released as limited-time promotion products, consumers seem to welcome new items even more, so the company actively supports the launch of loconomy items,” the official added.

In the meantime, Lee Eun-hee, a professor of consumer science at Inha University, highlights that the loconomy movement not only boosts economic connections between local farms and companies, but also promotes regional specialties, culture and values nationwide.

“The loconomy movement not only forms an economic activation link between local farms and companies but also provides an opportunity to promote the unique specialties, culture, and values of a region nationwide,” Lee said. “This aligns well with the trend of ethical consumption and will further strengthen local content discovery between municipalities, consumers, and companies.”

In the same report from Trendmonitor, beverages and bakery products were the most preferred loconomy food items, followed by processed foods, fresh produce, dining-out options, meal kits and ready-to-eat meals, sequentially.

By Hwang Joo-young(flylikekite@heraldcorp.com)