1. Changing trends of one-person households
One-person households (OPHs) are rapidly increasing due to a number of economic factors like unstable employment and declining income levels, social factors like changing perceptions about marriage, and demographic factors such as an ageing population.
As the economic recession has caused youth unemployment rates and the number of irregular jobs to soar, many young Koreans feel that the job market is increasingly unstable. As a result, there is a growing tendency among them to get married much later or not get married at all, choosing to live alone instead. In addition to such economic factors, changing values have also played a role. They pursue pragmatic values and have different perceptions of marriage, and as a result, more people live by themselves.
OPHs are also increasing among the middle-aged population for a number of reasons. First, more women are making more money and have economic freedom. Family values are also changing. Fathers staying in Korea while their wives and children live abroad for educational purposes are a growing trend as well.
The same is true for the elderly. The ageing population and higher life expectancy are fueling this phenomenon. As many people no longer uphold the tradition of taking care of their parents, more and more seniors end up living alone in their later life.
Global trends of one-person households
Globally, Sweden, Norway, Finland and Denmark have the highest OPH rates among total households. Approximately 40 percent of the total population lives alone in these countries. Among OECD countries, the rate has rapidly gone up since the year 2000 in countries like France, New Zealand and the United Kingdom. The average growth rate of OPHs is expected to be as high as 2 percent by 2030. Korea will also see an average OPH growth rate of 1.57 percent until then.
In Korea, there were only 1 million single-person households in 1990, constituting 9 percent of total households, but the figure surged to 4.89 million in 2014, taking up a considerable 26.5 percent of total households. It is estimated that the number of OPHs will continue to grow to reach 5.9 million by 2020 and 7.1 million by 2030.
2. Effects on grocery and food consumption
As of 2014, the OPHs’ average monthly expense on food, which includes groceries, non-alcoholic beverages, alcoholic drinks and dining-out expenses, was KRW 287,000 (USD 255.43), while multi-person households (MPHs) spend about KRW 387,000 (USD 344.43). The Engel’s Coefficient, which shows the proportion of income spent on food, was slightly higher for OPHs (29.2 percent) than for MPHs (27.1 percent).
It was found that low and middle-income OPHs consumed less food than MPHs, but high-income OPHs generally consumed more than MPHs. For fruits and processed food, singles aged below 40 consumed less than half that of those living with other family members. OPHs aged over 60 consumed less than half in animal products compared to MPHs. One interesting finding was that fishery products were considerably less consumed by OPHs in all age groups. In addition, consumption of instant frozen food has grown impressively since 2013, and especially among single-person households aged below 40.
The impact of increased OPH on food expenditure
It is estimated that during 2006 and 2014, 28.6 percent of the overall change in food expenditure was caused by changes in the demographic and generational structure, while income and cost changes accounted for 71.4 percent of the change. It was found that OPHs have higher price elasticities for fresh and processed food and dining out, as well as higher expenditure elasticities for processed food and dining out. As OPHs respond to prices more sensitively than MPHs, it is expected that OPHs’ expenditure on processed food and dining out will go up faster than that of MPHs with the increase in income.
Food purchasing and dining-out patterns
In the Household Income and Expenditure Survey, 42 percent of OPHs responded that they go grocery shopping less than two or three times a year, and 23 percent said they never do so. Products like microwaveable rice and pre-washed and cut fresh fruit were especially popular among them.
As opposed to MPHs, 53.6 percent of whom made kimchi on their own, only 19 percent of OPHs made kimchi at home. In addition, 43.2 percent and 50.2 percent of OPHs said they used soybean paste and red pepper paste sold in stores. Only 11.6 percent and 11 percent of them said they make such pastes at home, while 20.4 percent and 18.9 percent made the pastes at home, respectively.
More than twice a week, 18.2 percent of OPHs purchased fully-cooked products (food such as gimbab, or seaweed rice rolls, and lunch boxes) and 9.6 percent of them bought half-cooked products (various kinds of stew/soup, bowls of rice with toppings, and marinated meat, all ready to be eaten after a simple cooking process). These percentages were higher than MPHs’ 10.4 percent and 8.6 percent, respectively. Particularly, 26 percent of singles less than 40 purchased fully-cooked products more than twice a week.
OPHs also dined out more frequently than MPHs, with 15.8 percent of them eating out two or three times a week and 14.4 percent doing so once a week. When examining those who ate out more than twice a week according to age, 29.1 percent of them were less than 40 years old, but only 12.0 percent were aged over 60. This indicates that the younger the singles are, the more often they eat out alone. In terms of restaurants, Korean restaurants were most preferred.
3. Analyzing the impact of OPH on the food industry
Change in the food manufacturing industry
With the increase of OPHs, two new trends have emerged—first, the rise of small portion/quantity products and second, the increased demand for "instant" food such as pre-cooked food. Sales growth for the food manufacturing industry has been continuously increasing since the year 2000, especially with lunch boxes, pre-cooked meals and healthy foods gaining popularity. In response to the increasing demand from consumers for smaller portion products, manufacturers are developing and launching products with such portions in smaller packages. At the same time, demand for products tailored to the needs of the elderly is fast increasing, but there are not enough products available in the market.
Change in the distribution market
In the distribution market, the rise of OPHs is increasing the demand for convenient stores, expanding online platforms such as online supermarkets and changing the product composition in the shelves of large supermarkets. Convenient stores have also recently recorded high growth numbers. Processed and instant food products are taking up an increasingly higher proportion in overall sales, along with products packed in small quantities. In addition, online distribution channels, sales of food/beverage and animal/fishery products are growing quickly. Large supermarkets, on this note, are starting to stock more products for quick and easy meals, while carrying out active marketing strategies targeting one-person households.
Change in the dining-out market
In the dining-out market (including restaurants and bars), the biggest sales increase came from fast food restaurants and gimbab restaurants, among others. Single-person customers occupied a bigger share in the customer base for restaurants in the fast-food, fried chicken and convenient food businesses. Restaurant businesses are responding to such trends by making designated seats and developing new menus for single customers.
The government should devise policies to improve education on healthy dietary life, especially for those living alone since they are not receiving the right amount of nutrients on a daily basis. Such education programs should be better operated at the local community level. The government also needs to facilitate food support programs for the under-nourished. For example, various programs like offering nutrition classes at work and convenience stores, as well as cooking classes for single men can be developed and carried out.
Senior citizens living alone need the most support when it comes to food, especially those living in rural areas. Food provided for recipients should be determined by their present dietary habits and nutrient intake. Cooking programs at local kitchens or schools should also be launched to allow people to eat together.
Additionally, the government should devise a food industry policy to enhance the quality of home meal replacements and delivery foods, given the increasing demand for such foods. At the same time, it needs to facilitate the production of special food products for the elderly as their proportion among OPHs is considerably high.
By Kyei-Im Lee (firstname.lastname@example.org)
Korea Rural Economic Institute
The above article does not necessarily reflect the views or position of KOTRA.