Duty-free shops go beyond luxury bags to embrace K-food

Duty-free industry expands from fashion and beauty into food

Shinsegae Duty Free scores exclusive hit with Isaac Toast sauces and jams

Matcha craze lifts tea sales; food revenue up 60–70%

A dedicated display stand for Isaac Toast jam products has been set up at the "Taste of Shinsegae" food curation zone inside Shinsegae Duty Free at Incheon International Airport. [Shinsegae Duty Free]

Yang Hui-su, a worker in her 20s, stopped by the duty-free shops at Incheon International Airport before a trip to Qingdao in June — and what she picked up was Isaac Toast sauce. "I eat Isaac Toast a lot because I like it, and the sauce is only available at duty-free shops, so I bought some," she said. "I tried making a ham-and-cheese special toast in Qingdao using it, and I was happy with how it turned out."

Duty-free retailers are moving quickly to beef up their food offerings. Food products had long been overlooked in the industry because of their relatively low price points, but a surge in global interest in K-food has turned the category into a reliable revenue driver. Duty-free shops are now broadening their lineups well beyond their traditional mainstays of fashion and beauty to include ready-to-eat meals, tea, gochujang and a wide range of other food items.

At Shinsegae Duty Free, Isaac Toast sauces and jams — sold exclusively through the retailer — have emerged as standout products. The sauce is especially popular because it is produced solely for overseas export to protect franchise owners, making it hard to find elsewhere. Since going on sale in May, it has held the top spot in the food category on Shinsegae's online duty-free store. The retailer has also set up a dedicated display stand for the products at its "Taste of Shinsegae" food curation zone at Incheon airport.

The product has become so sought-after that Shinsegae has imposed a purchase limit — unusual for a food item — capping online orders at six units per customer. Even so, a limited restocking that goes live every night at midnight, including canceled orders, sells out almost immediately. The sauce is priced at 9,106 won on the official online store but changes hands on secondhand platforms for 15,500 won ($11) — about 70 percent above retail.

The global matcha craze has also reshuffled the food rankings at duty-free shops. Domestic brands such as Osulloc and Odada are drawing strong interest. Osulloc products alone account for 23 of the top 100 items in Shinsegae Duty Free's food category. Combined sales of major tea brands including Osulloc and TWG Tea rose 20 percent in the first half of this year compared with the same period last year.

The food category as a whole is on a strong upward trajectory. Shinsegae Duty Free's total food sales from January through July this year climbed roughly 70 percent year on year.

The food zone at Lotte Duty Free's Busan store, which opened Aug. 20. [Lotte Duty Free]

Lotte Duty Free has also posted sharp gains in its food category. Overall food sales in the second quarter of this year rose 68 percent year on year, with food purchases by foreign visitors surging 89 percent over the same period. Demand that was once concentrated in health foods such as red ginseng has broadened to include traditional liquor, desserts, ready-to-eat meals and tea.

Lotte Duty Free has been expanding its food lineup to meet growing K-food demand. In July, it introduced Lotte Hotel kimchi as an exclusive duty-free product, and it opened a new K-ramyun-focused food zone at its Busan store. The zone currently features a range of K-food brands, including ARIH — a food brand developed in collaboration with BTS — alongside Seja Coffee, Ediya Coffee, Bokhodoo, Jardin and Muryangsu.

The retailer is also rolling out regionally distinctive products. Its Gimhae airport store carries "Busan Chocolate" as an exclusive item, while the Gimpo airport store has launched a "Seoul White Choco Crepe."

The push to expand food offerings reflects a shift in how shoppers use duty-free stores. More consumers are now buying not just luxury goods and cosmetics but also products they discovered while traveling or items that are otherwise hard to find. Food is particularly appealing because its lower price point makes it an easy, low-commitment purchase compared with luxury goods or cosmetics.

"As overseas consumers' interest in K-food grows, the range of customers looking for food at duty-free shops is becoming more diverse," an industry official said. "We will continue to expand our food lineup, focusing on products that can only be found in Korea or that capture something distinctly Korean, for foreign tourists."

siuu@heraldcorp.com