Breaking: Loconomy Drives New Wave of local-Specialty foods across Major Retailers
Industry insiders say the distribution sector is fast-tracking “loconomy” products built around regional specialties, signaling a strategic shift toward locality as a growth engine.
In a notable development, a major retailer signed an MOU wiht Namhae-gun in Gyeongsangnam-do on the 8th. The collaboration plans seven Peacock/Namha Garlic convenience items to hit shelves by the end of next month, including a garlic-laden chicken soup, a sweet fig garlic pizza, garlic pig’s feet, and oil tteokbokki with Namhae garlic low-sugar sauce. This marks the second installment in the Peacock Loconomy series, blending the premium private brand Peacock with area-produced specialties.
Separately, 7-Eleven has been advancing a local agricultural products beverage project since a 2021 agreement with the Rural Development Administration. Over four years, the program has rolled out ten products sourced from across the country, ranging from Shine Musket developed by a youth farmer in Gyeongsan to Yuja from Goheung. Through last year, more than 200 tons of regional products were purchased, with cumulative sales surpassing 10 million units.
McDonald’s Korea has pursued a similar path under its Taste of Korea initiative, introducing burgers featuring Changnyeong garlic, Jindo green onions, and Iksan sweet potatoes as 2021. The campaign has achieved cumulative sales beyond 30 million units.
Analysts describe loconomy as more than a trend; it is shaping resilient supply chains and satisfying consumer demand for authentic regional flavors. For producers, these collaborations open scalable channels to national and perhaps international markets. For shoppers, they offer obvious provenance and richer taste profiles, while encouraging culinary innovation across regions.
At-a-glance: Key players and outcomes
| Player | Focus | |
|---|---|---|
| E-Mart | Peacock Loconomy with Namhae Garlic | Seven new Peacock/Namha Garlic convenience foods slated for release |
| 7-Eleven | Local agricultural products beverages | Ten products launched; over 200 tons purchased; 10M+ units sold |
| McDonald’s Korea | Taste of Korea program | local-ingredient burgers; 30M+ units sold |
What regional flavors would you like to see featured next? Share your ideas in the comments below.
Have you tried any loconomy products lately? Tell us about your experience in the discussion.
Em> curated packs
June 2024
Ready‑to‑eat meals from 8 provinces
these giants are allocating up to 5 % of shelf space to locally sourced SKUs, a figure that analysts predict will rise to 10 % by 2027 (Deloitte Korea Retail Forecast [3]).
.Teh Rise of Loconomy in Korean Retail
South Korean shoppers are increasingly seeking products that reflect their hometown’s heritage, prompting retailers to brand this demand as the “loconomy” trend. According to the Korean Ministry of Trade, Retail‑related loconomy sales grew 12 % YoY in 2024, outpacing overall grocery growth (2024 K‑Trade Report [1]).digital surveys from McKinsey 2025 show 68 % of consumers consider regional authenticity a top purchase driver (mckinsey Korea Consumer insights [2]).
Key Retail Players Driving the Trend
| Retailer | Loconomy Initiative | Launch Date | Core Focus |
|---|---|---|---|
| Emart | K‑Local product line | March 2024 | Seasonal regional foods |
| Lotte Mart | Local Flavor series | september 2023 | Premium regional specialties |
| CU Convenience | Homegrown mini‑range | January 2025 | Daily‑use snacks & beverages |
| GS25 | K‑Region curated packs | June 2024 | Ready‑to‑eat meals from 8 provinces |
These giants are allocating up to 5 % of shelf space to locally sourced SKUs, a figure that analysts predict will rise to 10 % by 2027 (Deloitte Korea Retail Forecast [3]).
Signature Local‑Flavor Product Launches
- Jeju Tangerine jam – Emart’s limited‑edition jam, sourced from Hallim‑ri farms, sold 1.4 million jars within three months.
- Gangwon Buckwheat Soba – Lotte’s “Mountain Harvest” noodles, made with 100 % organic buckwheat from pyeongchang, posted a 15 % price premium yet sustained a 25 % higher basket size.
- Gwangju Fermented Kimchi – CU’s “City‑Kimchi” packs, featuring heirloom cabbage varieties, achieved a repeat purchase rate of 42 % (CU Market Insights 2025 [4]).
- Jeonju Bibimbap Kit – GS25’s ready‑to‑mix kit, sourced from local farms in Jeollabuk‑do, recorded 3.2 million units sold by Q2 2025.
Supply‑Chain Adjustments for Regional Sourcing
- Partnering with Local Cooperatives – Retailers negotiate joint‑venture contracts with 15‑plus farmer groups, reducing middle‑man margins by 18 % on average.
- Cold‑Chain Expansion – New refrigerated hubs in Busan, Daegu, and Chuncheon cut transit spoilage from 7 % to 3 % (Korea Logistics Association 2025 [5]).
- Digital Traceability Platforms – Blockchain‑based traceability dashboards give consumers real‑time farm origin data, boosting trust scores by 22 % (SEB Research 2024 [6]).
Consumer Benefits and Buying Motives
- Authenticity & Storytelling – 55 % of shoppers cite product backstory as a decisive factor (Nielsen Korea Food Survey 2024).
- Support for Local Economy – 71 % feel purchases directly aid regional farmers, aligning with Korea’s “Green New Deal” goals.
- Freshness & Quality Perception – Locally sourced items are perceived 30 % fresher than imported equivalents (KOSIS Fresh Food Index 2023).
- Health & Sustainability – Reduced carbon footprint and minimal processing increase perceived health benefits.
Strategic Tips for Retailers Expanding Local Lines
- Map Regional Demand Hotspots – Use KOSIS consumption heat maps to pinpoint provinces with unmet loconomy appetite.
- Curate Seasonal Rotations – Align product roll‑outs with regional harvest calendars (e.g., spring berries, autumn persimmons).
- Leverage In‑Store Story Zones – Install mini‑exhibits featuring farmer photos and QR‑code videos to deepen engagement.
- Integrate Data‑Driven Pricing – Apply dynamic pricing models that reflect regional cost variance while maintaining a 10‑15 % margin buffer.
- Collaborate on Co‑Branding – Partner with local tourism boards for “Taste of [Region]” campaigns, expanding reach beyond grocery aisles.
Case Study: Emart’s ‘K‑Local’ Portfolio
- Launch Strategy – Emart introduced a phased rollout, starting with three pilot stores in Seoul’s Mapo district, then scaling to 250 outlets nationwide.
- Product Mix – 45 % fresh produce, 35 % processed snacks, 20 % ready‑meals, each bearing a “Made in [Province]” seal.
- Performance Metrics – Within 12 months, the K‑Local line generated KRW 1.2 billion in incremental revenue, representing a 4.8 % uplift in total grocery sales. Repeat purchase frequency rose to 3.3 times per month (Emart Annual Report 2025 [7]).
- Key Success Factors – Clear sourcing, localized packaging design, and a dedicated “Loconomy” merchandising team.
Future Outlook for Loconomy in Korea
- Growth Projection – Market analysts forecast the loconomy segment to reach KRW 8 trillion by 2028, driven by aging rural populations and rising urban demand for heritage foods (Korea Economic Review 2026 [8]).
- Technology Integration – AI‑enabled demand forecasting will further tighten supply chains, reducing stockouts of regional items by an estimated 27 % (IBM Korea AI Insights 2025).
- policy Support – The Ministry of Agriculture’s “Regional Product promotion Fund” is set to allocate KRW 150 billion annually, incentivizing retail‑farm collaborations.
Sources
[1] Korean Ministry of Trade, “Retail Loconomy Sales Report 2024.”
[2] McKinsey & Company, “Korea Consumer Insights 2025.”
[3] Deloitte Korea, “Retail Forecast 2026.”
[4] CU Market Insights, “Local Product Performance 2025.”
[5] korea Logistics Association, “Cold‑Chain Efficiency Study 2025.”
[6] SEB Research, “Blockchain Traceability in Food Retail 2024.”
[7] Emart, “Annual Report 2025 – Loconomy Section.”
[8] Korea Economic Review, “Future of Regional Products in Korean retail” 2026.
