CJ to monopolize local HMR market amid COVID-19

Popular Korean football star Son Heung-min appears in CJ Cheiljedang's home meal replacement product advertisement. / Courtesy of CJ Cheiljedang

By Kim Jae-heun

CJ Cheiljedang has emerged as one of the few companies to benefit from the COVID-19 pandemic as demand for home meal replacements soared in and outside the country.

With people following government guidelines and staying home to prevent the spread of the deadly coronavirus, the country's leading food company was able to avoid the economic damage that struck most businesses here hard.

The ready-made meal market has become lucrative in Korea as the number of people living alone has begun to grow and many married working couples are no longer cooking at home

Easy to cook meals such as baked fish that can be served after only one minute in the microwave have become a hit, with sales of the latter soaring 30 percent every month since its introduction last August. Sales of frozen dumplings and hot dogs increased from 349 billion won in 2015 to 662 billion won, last year.

CJ Cheiljedang's business performance overseas is prominent too. The volume of orders for ready-made meals by Schwan's, the company's affiliate in the United States, has more than doubled, in part due to people hoarding food after the outbreak of COVID-19.

Schwan's owns a distribution system for food across America and was acquired by the Korean company for 2 trillion won in November 2018. The subsidiary is profitable and CJ Cheiljedang is expected to recoup its outlay soon.

CJ Cheiljedang dominates the ready-made meal market, having a 30 percent market share in 2016 that increased to 40 percent in 2017 and now is verging on over 50 percent.

Products launched by the company's affiliates Bibigo and Gourmet have all been successful, while its existing meals have also expanded their market share.

The local market value was estimated at 4 trillion won last year but is expected to grow 30 percent this year due to the spread of the novel coronavirus.

“If previous HMR (home meal replacement) products showed a lack of variety with only simple instant rice and frozen dumplings, now we are seeing ready-made soups and packed fishes. We are expecting bigger demand for HMR items in the near future and they have now become a necessity in our life,” said Park Hee-jin, a researcher at Shinhan Investment Corporation.