Food firms foster in-company ventures to find new growth engines
Head of Food Business and Growth Strategy at CJ CheilJedang Lee Sun-ho, third from left, poses for a photo with the company's in-house venture team at INNO Play office in Gangnam-gu, Seoul, on March 5. Courtesy of CJ CheilJedang
By Kim Jae-heun
Larger food companies here are nurturing in-company ventures to find new growth engines and innovate their stodgy corporate culture, according to company officials Sunday.
The country's largest instant noodle maker, Nongshim, has been operating an in-house start-up program called “N-START” since 2018. The program aims to discover creative ideas among young workers and encourages them to start initiatives based on them. The company ensures the participants' independence.
One of the most successful outcomes of the program is Nongshim's new business in health functional food and smart farming. Its health functional food brand, “Lifill,” launched under N-START in 2020, achieved cumulative sales of 80 billion won ($60.65 million) as of the end of last year.
Lifill's popular product, “Derma Collagen,” uses a low-molecular collagen peptide called NS as the main ingredient. Nongshim's start-up team developed NS and obtained a certification from the ministry of Food and Drug Safety.
In 2018, another Nongshim start-up team set up 198 square-meters of special crop research and cultivation facilities as well as 661 square-meters of mass production smart farming facilities. This helped the team to invent a container-type smart farm facility and export it to Oman for the first time.
“Most of the food firms here are conservative and in-company ventures are the perfect program for us to try new businesses and give young employees a boost,” a Nongshim official said. “But our collagen and smart farm businesses have done well and they have created a market worth around 60 billion won. It is a good opportunity for the company too.”
Officials from Oman's Ministry of Agriculture, Fisheries and Water Resources visit Nongshim's mass production smart farm in Anyang, Gyeonggi Province, on Dec. 24, 2022. Courtesy of Nongshim
Lotte Wellfood, formerly known as Lotte Confectionery, has been running an in-house venture program called “Lotte Creative Valley” since 2021.
Its very first team, “Stand Egg,” broke even a year after the spin-off. Its mobile puzzle game, “Cat Garden,” which was launched last May, garnered more than 300,000 users as of last November.
Lotte Wellfood's second in-house venture, “Annual Leave,” was spun off as an independent business on April 6. It opened a showroom as well as a coffee shop in Youngdeungpo District, western Seoul, and is continuing to develop the brand.
CJ CheilJedang held an opening ceremony for its in-company venture office, “INNO Play,” in Gangnam, Seoul, on April 5. The space consists of an office zone, a community lounge and a kitchen lab.
There are five start-up teams already selected within the company's venture management team and plan to move into INNO Play. CJ CheilJedang aims to innovate its corporate culture and develop ideas for new businesses through the program.
“The main purpose of the start-ups is to encourage workers of the MZ generation to try new things and get motivated,” a local food firm official said.