Production Bases Moving Closer to Raw Material Origins

In the health functional food and natural products industries, the trend of placing manufacturing bases near production areas has become more pronounced than the conventional model of simply purchasing raw materials. In Yeongju, Daehan Red Ginseng is investing KRW 13 billion to build a new factory and relocating its current headquarters and plant in Geumsan, South Chungcheong, while creating a structure that gives priority to ginseng produced by members of the Punggi Ginseng Agricultural Cooperative.

This trend goes beyond the relocation of a specific company and is developing into a broader direction that places raw material supply stability at the center of industrial design. Large-scale contract cultivation of Japanese hop in Jangheung and discussions on expanding the distribution of domestic licorice varieties “Wongam” and “Dagam” can be read as attempts to reduce import dependence and price volatility while simultaneously securing both farmers’ market access and companies’ procurement channels.

Standardization and Testing Infrastructure Emerging as Investment Conditions

As the natural products industry grows, systems that can prove the consistency and safety of raw materials are becoming prerequisites for commercialization. Jangheung’s standardization hub project, Yangsan’s pilot operation of an open laboratory, and Kwangdong Pharmaceutical’s research on a quantitative analysis method for eudesmol show that it has become difficult for natural product-based goods to expand in the market on experience or tradition alone.

Such infrastructure lowers entry barriers for small and medium-sized companies while also transforming regionally produced goods into industrial materials that can be distributed nationwide and overseas. In the end, standardization is becoming more than a defensive tool for meeting regulations; it is becoming a core mechanism for reducing the trust costs involved in raw material transactions and product expansion.

Research Data Being Transformed into Tools for Industrial Operations

In research settings, the shift toward collecting natural products and traditional Korean medicine data for use in actual decision-making is also accelerating. The Rural Development Administration’s agricultural and life science-specialized large language model, the Korea Institute of Oriental Medicine Promotion Agency’s advancement of the Korean Medicine Laboratory Information Management System (KLIMS), and the Korea Institute of Oriental Medicine’s proposed AI Korean medicine hub all reflect a movement to turn scattered papers and experimental data into searchable, analyzable, and verifiable industrial assets.

This change matters because the natural products industry can no longer rely solely on the accumulation of small-scale experience. Only by linking quality control, clinical evidence, crop selection, and product development through data can research outcomes move beyond public support and translate into business performance and regulatory response capabilities.

Simultaneous Expansion of the Consumer Market and Competition for Trust

On the demand side, bio companies are fostering the health functional food business as a new source of revenue, pharmaceutical firms are pursuing both natural product-based drugs and consumer products, and the food industry is expanding the market with everyday lifestyle keywords such as slow aging. This means that as consumption shifts from treatment-centered demand toward prevention and daily wellness management, natural product ingredients are being chosen more often outside hospitals as well.

However, as the market grows, disparities surrounding trust are also becoming more visible. On one hand, product development based on evidence and standardization is advancing; on the other, predatory sales tactics targeting vulnerable consumers—such as luring them with free products and then selling expensive red ginseng—continue to recur, undermining trust in the industry as a whole. These articles therefore show that, more than growth itself, what has become crucial is which distribution methods and which verification systems will gain leadership in the market.