From Burgers to Wine and Beer… High Exchange Rates and Cost Surge Trigger Food Price Hikes

# Surging Prices Across Food and Beverage Sectors Amid High Exchange Rates and Raw Material Costs The ongoing high exchange rate and rising raw material costs since late last year have led to significant price hikes in a variety of food and beverage products, ranging from McDonald's hamburgers to bread, frozen foods, wines, and beers. According to industry sources on the 14th, McDonald's Korea plans to increase the prices of 20 menu items by an average of 2.3% starting March 20. This marks the first price hike in approximately ten months since the average 2.8% increase in May of last year. Two standalone burger items, the Bulgogi Burger and Cheese Burger, will see a price hike of 200 KRW each. Seven set menu items will witness price adjustments ranging from 200 KRW to 300 KRW. Moreover, 'Drip Coffee' will experience a 200 KRW increase due to sustained rises in coffee bean prices. A representative from McDonald's Korea stated, "The ongoing increase in exchange rates and raw material costs has left us no choice but to adjust our prices." It's not just McDonald's; New York Burger, a handcrafted burger franchise, will raise the price of its signature New York Burger by 10% from 4,900 KRW to 5,400 KRW, effective March 25. # Franchise and Packaged Goods Witness Similar Trends Additional price increases include Chicken King Burger and Whole Shrimp Burger, which will rise from 4,900 KRW to 5,300 KRW and 5,400 KRW, respectively, while the Ojing Burger will see a 9% hike from 4,500 KRW to 4,900 KRW. HiteJinro, a prominent beverage company, raised the prices of over 800 types of wine, including Taittinger and Yann Alexandre, and 200 varieties of champagne by an average of 1.9% earlier this month. However, they have frozen the prices of about 400 varieties and even lowered the prices of some products. Lotte Asahi Liquor, which imports and distributes Japanese beer "Asahi," also raised prices by 8% to 20% starting March 1. For instance, the Asahi Super Dry 350 ml can has surged 14.3%, from 3,500 KRW to 4,000 KRW, while the 500 ml can increased 8.9%, from 4,500 KRW to 4,900 KRW. # Coffee and Bakery Items Also Affected Low-cost coffee brands are not immune to the price hikes triggered by rising coffee bean costs. The Vente, a budget coffee franchise, raised the price of its iced Americano by 200 KRW (11.1%), from 1,800 KRW to 2,000 KRW on March 4. Its decaffeinated iced Americano went up by 13%, from 2,300 KRW to 2,600 KRW. Compose Coffee, another low-cost coffee chain, increased the price of its iced Americano by 30%, from 1,500 KRW to 1,800 KRW, citing raw material price hikes as well. Additionally, the prices of readily consumable items like frozen dumplings, spam, bread, and ramen have been climbing. Starting March 17, Nongshim will adjust the prices of Shin Ramyun and Shrimp Crackers, increasing the factory prices of 17 out of 56 ramen and snack brands by an average of 7.2%. CJ CheilJedang has raised the prices of flagship products such as Bibigo dumplings and spam since the beginning of this month. The popular King Dumplings (Wang Gyoja) now cost 9,480 KRW, up 5.6% from 8,980 KRW, while Spam Classic (200g) has risen 9.8%, from 5,080 KRW to 5,580 KRW. Dongwon F&B also increased the prices of 15 types of frozen dumplings by an average of 5% in March. # Hospitality Sector Not Spared Bakery brands like Tous Les Jours and Paris Baguette have also executed price hikes due to the rising cost of raw materials. On March 1, CJ Foodville's Tous Les Jours raised the prices of 94 types of bread and 16 types of cakes by an average of 5%. SPC's Paris Baguette also increased the prices of 96 types of bread and 25 types of cakes by an average of 5.9% due to raw material cost hikes, effective February 10. The hospitality sector has not been spared either. The Ibis Styles Ambassador Hotel Incheon Airport, part of the Ambassador Hotel Group, will increase its sauna fees by 25%, from 8,800 KRW to 11,000 KRW, starting March 14. Earlier this month, the 'Ibis Ambassador Seoul Myeongdong' raised its adult breakfast buffet prices by 38%, from 19,800 KRW to 27,500 KRW. The 'Ibis Ambassador Seoul Insadong' also increased breakfast buffet prices from 16,500 KRW to 19,800 KRW, marking a 20% rise, while lunch prices rose by 11.1% from 29,700 KRW to 33,000 KRW. A retail industry insider commented, "The recent surge in exchange rates, labor costs, and raw material prices has significantly increased cost burdens, leading to widespread price increases. The situation has become unsustainable, and raising prices has become unavoidable to maintain profitability."