Regular Article pISSN: 2288-9744, eISSN: 2288-9752 J F E S Journal of Forest and Environmental Science Journal of Forest and Vol. 36, No. 2, pp. 156-162, June, 2020 Environmental Science https://doi.org/10.7747/JFES.2020.36.2.156 Management Status and Development Plan of Green Processors in

Hagmo Kang1, Junho Park2, Sooim Choi3, Chongkyu Lee4 and Hyun Kim4,* 1Department of Forest Environmental Science, Jeonbuk National University, Jeonju 54896, Republic of Korea 2Gyeongsangnam-do Forest Environment Research Institute, Jinju 52612, Republic of Korea 3Department of Forest Resources, Sunchon National University, Suncheon 57922, Republic of Korea 4Department of Forest Resources, Gyeongnam National University of Science and Technology, Jinju 52725, Republic of Korea

Abstract This study was conducted to analyze the current management status of processors in two regions (Hadong-gun and Boseong-gun) in Korea and to suggest directions for the development of the green tea industry based on an understanding their difficulties in management. This study showed that the number of green tea farms and the cultivation area had decreased, while the average unit sales price of green tea in Boseong-gun was approximately three times higher than that in Hadong-gun. Also, this study found that Hadong-gun mainly provided green tea products to wholesalers, whereas Boseong-gun sold it directly to the local retail stores targeting tourists, and this results in generating relatively higher unit prices. Meanwhile, we discovered that both regions had difficulties in management which were caused by the demand for low delivery unit costs from large corporations and small food companies. Therefore, in order to develop the green tea industry in both regions, the size of green tea fields and the scenery satisfaction should be improved to draw more tourists and boost tourists’ intention to revisit. In addition, it is necessary to enhance guidance and accessibility of related tourist sites, to expand green tea experience activities, and to improve product satisfaction by developing various goods. By inducing more tourists in these ways, it could change the sales type of green tea from wholesale to retail and help activate the management of green tea processors.

Key Words: experience activities, green tea, tourism, type of sales, unit sales price

Introduction ern tea fields in , and it launched the brand called “Sulloccha” which popularized green tea drinking Tea tree is a small perennial evergreen tree belonging to and industrial base. Along with this trend, income increase the family of Theaceae (Lee and Kang 2014). Moreover, from economic growth has raised the public interest in the green tea made of tea tree ( L.) health since the 1990s, and green tea has been recognized as is one of the favorite foods. The green tea industry started a healthy drink. As a result, the cultivation area and pro- in the late 1960s under the government-led initiative by es- duction amount of green tea have continuously increased tablishing three large-sized tea fields (Boseong, Goheung, until the late 2000s (Yoo 2010; Kim et al. 2014). and Youngam in Jeollanam-do, Korea). In the early 1980s, The current major green tea cultivation areas in Korea Jangwon Industry of Pacific Corporation established mod- are Boseong-gun in Jeollanam-do and Hadong-gun in

Received: January 28, 2020. Revised: February 26, 2020. Accepted: February 26, 2020.

Corresponding author: Hyun Kim

Department of Forest Resources, Gyeongnam National University of Science and Technology, Jinju 52725, Republic of Korea Tel: 82-55-751-3244, Fax: 82-55-751-3241, E-mail: [email protected]

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Gyeongsangnam-do. The number of green tea farm house- difficulties in management. holds decreased from 4,030 farms in 2013 to 2,597 farms in 2018 and the cultivation area of green tea also decreased Materials and Methods from 2,926 ha in 2013 to 2,744 ha in 2018. On the other Background of survey area selection hand, green tea production was 2,700 tons in 2013, but it increased to 3,878 tons in 2018 by 44 % (MAFRA 2019). The survey was conducted on green tea processors in The market for tea and in 2014 was about 2.8 tril- Hadong-gun in Gyeongsangnam-do and Boseong-gun in lion won, and coffee accounted for about 2 trillion won, Jeollanam-do of Korea, which are Korea's representative 71% of the total. Actually, coffee plantations support the lo- green tea growing and producing regions. Hadong-gun in cal economies of some coffee production countries with Gyeongsangnam-do is widely known to people as the first short-term returns (Manik and Sidle 2018). Green tea tea plantation in Korea and as the production area for luxu- amounted to about 35 billion won, accounting for 1.3%, ry with its long history of cultivation and the clean im- followed by with 0.6% (18 billion won), tea age of Jiri mountain. Hadong-gun holds nine festivals to and others with 27% (about 7.7 billion won). However, var- revitalize the local economy through green tourism and ious diseases such as obesity, hypertension, and heart dis- hosts the “Wild Festival” and “Hadong Green ease have been increased due to the rise in income level and Tea, Yellow Mullet Festival” on the theme of green tea. In the westernization of dietary habits. In accordance with this addition, Hadong-gun operates Hadong tea culture center phenomenon, consumers' interest in health has grown and and the , promotes Hadong green tea, supports for the consumption of green tea with numerous effects has participation in the fair, and manages the Hadong green tea been increased (Park 2013). The green tea is being pro- familiarization tour to promote “Hadong green tea” duced all over the world, and the market is also expanding through the active visit of tourists (Hadong-gun 2012). rapidly (Shin 2007). Boseong-gun in Jeollanam-do takes advantage of the A number of past studies have been conducted on the beautiful terraced tea fields to promote tourism in order to present status and prospect of green tea industry (Park increase green tea sales and develop green tea related 2011; Kim et al. 2014), consumer preference and purchase industries. Also, Boseong-gun offers green tea meal serv- propensity (Kim and Han 2011; Park 2013), green tea dis- ices and green tea related experiences to schools across the tribution and sales (Piao 2011; Yin 2012), green tea proc- whole country and makes efforts to increase the number of essing and product development (Cho and Kim 2013; Park stay-type visitors by developing a variety of foods using 2015), green tea tree cultivation and growth (Cho et al. green tea. Besides, Boseong-gun promotes businesses such 2010; Hwang et al. 2010), green tea component analysis as the operation and management of “Botjae” which is the and function (Lee et al. 2015), and the efficacy of green tea green tea landmark, improvement of facilities and environ- (Kim 2014). In addition, the studies on the effect of green ment for Korean tea cultural park, activation of Korean tea tea industry on the satisfaction of tourists in the region (Cho museum operation, and tea (food) making experience tour and Park 2004) and the strategies for revitalizing festivals through Boseong Green Tea Establishment to foster pre- by analyzing visitors from local cultural tourism festivals mium Boseong tea. In 2017, Boseong-gun prepared new through green tea (Suh and Ko 2008) have also been projects such as managing of tea fields for stay-type tourism conducted. and creating a healing space for Korean Tea Culture Park However, there is little research on the development plan (Boseong-gun 2017). of the green tea industry through the management status of Contents of survey the green tea processors and the difficulties in management, which are a big part of the production, processing, and sales A face-to-face questionnaire survey was conducted on of green tea. Therefore, this study was carried out to sug- the management status of green tea processors in gest the development plan of the green tea industry through Hadong-gun and Boseong-gun to establish the develop- the management status of the green tea processors and the ment plans of processors in the survey areas. The contents

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of the survey were the general status of green tea pro- on the differences in farm household number, cultivation duction, sales of green tea, difficulties in management and area, harvest area, amount of harvest, production amount, opinions on the development of green tea industry. and an average unit price for two green tea producing The survey was conducted on five companies in regions. Also, the sales types of green tea processors located Boseong-gun and seven companies in Hadong-gun. The in two regions were divided into wholesale and retail, which survey period was from early January to the end of were compared with each other. This study analyzed the February 2014 in Boseong-gun and from early January to characteristics of sales types through the positioning map of the end of February 2013 in Hadong-gun. Both green tea sales by sales types using Multidimensional Scaling processors were randomly selected because they didn’t want (MDS). All statistical analyses were carried out in SPSS to disclose information to protect personal information such Version 21. A significance level of 5% was used for all as the number of green tea sales and processing volume of analysis. green tea. Also, unlike the data on green tea processors ob- tained from the municipality, there were a considerable Results and Discussion number of companies that have not operated or have stop- General status of green tea production area ped operating even though they equipped with the large-scale processing facilities. Moreover, when conduct- The average number of green tea cultivation farms in ing local questionnaires for processors, it was difficult to se- Hadong-gun and in Boseong-gun were about 1,897 and cure the number of questionnaires because processors 999 farms, respectively in the recent five years. The number avoided answering the questionnaires for reasons: avoid- of green tea cultivation farms in Hadong-gun was about ance disclosing sales, busy work, long-term absence, and twice as high, and there were statistically significant differ- lack of sales performance due to unprocessed green tea in ences (t=11.229, p＜0.001) between the two regions. The the previous year. cultivation area was similar in both areas, and there was no significant difference between the regions (t=-0.062, p＞ Analysis method 0.05). However, there was a significant difference in the To obtain the basic data for understanding the manage- production amount between the two regions (t=-6.717, p＜ ment status of green tea processors in Hadong-gun and 0.05). The average production amount of Hadong-gun and Boseong-gun, an independent sample t-test was conducted Boseong-gun were about 3,066 tons and 6,534 tons,

Ta ble 1 . Trends in green tea producing regions Category Regiona 2012 2013 2014 2015 2016 Mean±SD tb (p) Nunber of green tea farms (N) Ha 2,013 1,956 1,564 1,935 1,926 1,878.8±179.2 11.229 (0.000) Bo 1,006 983 962 945 917 962.6±34.2 Cultivated area (ha) Ha 1,128 1,095 960 1,014 1,014 104,228±68.0 -0.062 (0.953) Bo 1,064 1,062 1,048 1,039 1,008 1,044.2±22.7 Harvested area (ha) Ha 1,042 1,014 860 1,014 1,014 988.8±73.0 4.828 (0.001) Bo 875 816 780 767 744 796.4±51.1 Production volume (ton) (c) Ha 4,024 3,948 3,454 1,956 1,950 3,066.4±1,039.7 -6.717 (0.001) Bo 7,350 6,615 6,372 6,309 6,026 6,534.4±501.8 Production value estimated Ha 241 180 152 169 167 181.8±34.6 -20.720 (0.000) (hundred million won) (d) Bo 1,176 1,063 1,018 1,253 1,197 1,141.4±97.6 Mean unit sales price Ha 5,989 4,559 4,401 8,640 8,564 6,430.6±2,076.7 -8.407 (0.000) (won/kg) (d/c) Bo 16,000 16,070 15,976 19,861 19,864 17,554.2±2,107.5 aHa, Hadong-gun; Bo, Boseong-gun. bIndependent sample t-test. Internal data (Hadong-gun and Boseong-gun).

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respectively. Although Boseong-gun had a narrower har- leaves, luxury tea, and powdered green tea) of seven vest area than Hadong-gun (about 192 ha, t=4.828, p＜ processors in Hadong-gun, the largest share of 38.4% was 0.05), it produced more than twice the amount of green tea. sold to large corporations and small food companies. Next, The average annual green tea production amount of personal sales to tourists accounted for 18.2%, department Hadong-gun and Boseong-gun were about 18.2 billion stores accounted for 15.7%, National Agricultural Cooperative won and about 114.1 billion won, respectively, showing that Federation (NACF) branch stores accounted for 15.2%, noticeable difference between two regions (t=-20.720, p＜ and large markets accounted for 10.5%. Hadong-gun’s 0.001). As a result, the average unit price per kg showed a sales of green tea processed goods mainly accounted for statistically significant difference (t=-8.407, p＜0.001). 80.8% of bulk sales of wholesale types requiring low unit The average unit price of Hadong-gun and Boseong-gun prices. On the other hand, among the total sales amount of were about 6,431 won/kg and about 17,554 won/kg, re- green tea processed goods of five companies in Boseong- spectively, which indicates that the average unit price of gun, 49.2% was sold to tourists through the direct sales Boseong-gun was 2.7 times higher than that of Hadong-gun stores. It was followed by sales through experiential festivals (Table 1). and events (12.6%), institutions such as Korea Electric Power Corporation (KEPCO) and banks (12.1%), and Green tea sales status of processing companies large corporations and small food companies (10.0%) Among the total sales amount of processed goods (dried (Table 2). As a result of analyzing the perception level of sales by sales types of all green tea processors using MDS, the Ta ble 2 . Sales types of green tea in Hagong-gun and Boseong-gun Stress value was 0.085, which was less than 0.15, and thus it Sales amount was sufficiently reliable. Also, The RSQ (Squared correla- Region Type of salesa (million won, %) tion) value was 0.991, which was close to 1, so the ex- Hadong Wholesale La 2,271 (38.4) planatory power of the model was high. According to the De 930 (15.7) result of the analysis, there was no characteristic sales pat- Na 900 (15.2) tern in Hadong-gun. However, the personal sales to tou- Su 620 (10.5) rists showed great features, and sales to institutions were al- Ex 60 (1.0) so characteristic (Fig. 1). Sub-total 4,781 (80.8) Retail To 1,079 (18.2) LoG 43 (0.7) ExF 17 (0.3) Sub-total 1,139 (19.2) Total 5,920 (100.0) Boseong Wholesale La 125 (10.0) Su 123 (9.9) Ex 75 (6.0) Sub-total 323 (25.9) Retail To 612 (49.2) ExF 157 (12.6) Ins 151 (12.1) IntS 2 (0.2) Sub-total 922 (74.1) Total 1,245 (100.0) aLa, large companies and small food companies; De, department Fig. 1. Positioning map for the sales types of green tea in Hadong-gun and stores; Na, NACF branch stores; Su, supermarkets; Ex, export; Boseong-gun. B, Boseong-gun; H, Hadong-gun; To, tourists; Ins, in- To, tourists; LoG, local government; ExF, experience festivals/ stitutions; La, large companies and small food companies; Su, super- markets; ExF, experience festivals/events; Ex, export; Na, NACF branch events; Ins, institutions (KEPCO and banks); intS, internet sales. stores; De, department stores.

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fluence on the activation of the local economy (Yeo et al. Comparison of green tea sales patterns 2007; Suh and Ko 2008). The most significant difference in the sales patterns of Management difficulties and requirements green tea between the two regions was that Hadong-gun had a wholesale type and Boseong-gun had a retail type. The most significant difficulties in the management of Since the processors surveyed in the two regions differed in green tea processors were the expansion of coffee demand, the size of green facilities and the manage- green tea domestic market downturn due to the launch of ment, there may be differences in sales channels. However, various beverages and reduction of green tea consumption green tea processors in Hadong-gun focused on wholesale generations, labor shortage, and lack of harvest labor force type, while green tea processors in Boseong-gun used direct as well as rising labor costs derived from aging. Also, there green tea fields as a means of production and actively at- were many difficulties in management which were caused tracted tourists by making tourism products. Also, Boseong- by the demand for the low delivery unit price of green tea gun tried to link the scenery of green tea fields with sight- bags and powder green tea, which are mainly supplied to seeing, such as tasting shops with direct sales stores for tou- large domestic corporations. rists (Fig. 2). As requirements of green tea processors, the maintenance Natural landscapes and local traits lead to increased sales of tradition through terrace cultivating green tea and the in the area (Park et al. 2002) and induce enhanced visitor scenery improvement of the green tea field are essential satisfaction and continuous revisit (Shin et al. 2016; Sim et tasks to attract more tourists. They also mentioned the ne- al. 2018). As a result of comparing the sales status of green cessity of supplying school meals for mass consumption, tea in two regions, we found that efforts to actively attract promoting young people with high quality and brand strat- tourists by specializing in natural scenery have an influence egy, expanding public relations, developing various goods, on the sales pattern and the rate of green tea sales. This and securing a wide range of green tea enthusiasts by form- could lead to the increase in not only sales of green tea pro- ing various green tea price ranges. Additionally, green tea ducers and processors, but also sales of specialty stores, res- processors stated that in order to increase the sales and con- taurants, and accommodations, which have a significant in- sumption of green tea, it is necessary to establish the stand- ard preferentially for organic conversion and quality control of green tea cultivation to change consumers’ awareness about the safety of green tea. Meanwhile, the existence val- ue of green tea processors is said to be the role of coex- istence with residents such as purchasing fresh leaves of green tea produced by farmers and creating jobs and main- taining and preserving the traditional culture of green tea in Korea.

Conclusion

Hadong-gun has been widely known as the first tea plan- tation in Korea and is famous for producing luxury teas. Most of the cultivation areas are located in sloping places, and harvesting leaves for the production of luxury teas are done by hand. Therefore, there is a need to highlight the characteristic of Hadong-gun as a luxury tea production area with the clean image of Jiri mountain as the backdrop. Fig. 2. Comparison of the regional landscapes between Hadong-gun (a, b) and Bosung-gun (c, d). In addition, Hadong-gun has a relatively small size of

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green tea fields compared to Boseong-gun, so it is com- Cho KO, Kim SI. 2013. The Quality Characteristics of Boiled Pork paratively in short supply of tourism commercialization Supplemented with Tea Extracts. J Korean Soc Food Sci Nutr 42: 774-783. (in Korean with English abstract) (Yeo et al. 2007). Therefore, it is necessary to attract more Choi SH, Lee JH, Lee SM, Choi IH, Chai DS, Woo JC. 2014. tourists by expanding the size of green tea field tourism An Idea on Increasing Income of Residents in DMZ Area commercialization and the experience activities related to Using FGI and SWOT Analysis - Focused on Haean-myeon in green tea. Through these actions, it is required to revitalize Yanggu-gun of Gangwon Province. J For Sci 30: 50-55. (in the management of the processors by changing from whole- Korean with English abstract) sale-based sales to retail sales targeted at tourists, experience Hadong-gun. 2012. County administration white papers (2010- 2012). http://www.hadong.go.kr/_res/portal/data/pdf/web00199/ festivals or events. web00199_01.PDF. Accessed 6 Feb 2020. In order to promote the commercialization of green tea, Hwang JG, Kim JC, Cho KH, Han JY, Kim RM, Kim YS, we need to carefully analyze the refinement, experience, en- GW, Kim YD. 2010. Analysis of Meteorological Elements joyment, event information, operational suitability, facility in the Cultivated Area of Hadong Green Tea. Korean J Agric convenience, which are major factors affecting the image of For Meteorol 12: 132-142. (in Korean with English abstract) Kim KH, Han YS. 2011. A Study on the Structural Relationships tourists (Suh and Ko 2008) and apply these to green tea among Selection Attributes, Satisfaction, and Loyalty of Green tourism. Boseong-gun should constantly maintain the con- Tea Consumers: The Moderating Effect of Involvement. 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