Large food firms target W4 tril. in sales fueled by K-food popularity

A visitor of Woolworths supermarket in Sydney, Australia, checks Bibigo products, Sept. 1. Courtesy of CJ Cheiljedang

According to industry observers on Friday, more large Korean food companies are experiencing record sales this year, largely due to their success in overseas markets.

Despite soaring prices for natural produce and manufactured food this year, which have slowed domestic consumption, the global popularity of Korean cuisine has helped sustain these companies. Three trillion won ($2.22 billion), once considered the minimum sales figure needed to qualify as a large food firm here, is apparently no longer sufficient.

According to market experts, 10 Korean food firms have now joined the country’s "3 trillion won club," up from just four in 2022. Some of these companies even anticipate exceeding 4 trillion won in sales this year.

Leading the pack of mega-performers is CJ Cheiljedang, which has far surpassed the single-digit standard with 29 trillion won in sales last year and 14.5 trillion won in the first half of this year. The company projects it will reach 29.7 trillion won by the end of the year.

CJ saw rising sales overseas with its signature food brand Bibigo for various Korean food like dumplings, gimbap (steamed rice rolls stuffed with various ingredients) and tteokbokki (spicy rice cakes). The company has been promoting the brand in international sports events like the PGA Tour and introducing it as a meal option for international airliners. The company said it would keep expanding its global markets using “globally strategic products.”

Lotte Chilsung recorded 3.2 trillion won in sales last year and anticipates exceeding 4.1 trillion won this year. This growth has been bolstered by the company's Filipino subsidiary, Pepsi Philippines, which it acquired operational rights for in September of last year. The subsidiary registered over 803 billion won worth of sales in the first half of the year, more than triple the figure from the previous year.

Daesang's Jongga kimchi products are on display at Trader Joe's supermarket in Los Angeles in this photo from December 2023. Korea Times file

“Philippine Pepsi, which we acquired last year, (has been) contributing to our performance (since the start of) this year,” a Lotte official said. “With its annual sales nearing 1 trillion won last year (944.8 billion won), it will help us reach our sales goal this year.”

Daesang has designated kimchi, sauces, ready meals and dried seaweed as key products to export. It built a kimchi manufacturing plant in the United States in 2022 and is building another in Poland. Last year, it acquired the U.S.-based Asian food producer Lucky Foods.

The company registered sales of 4.14 trillion won last year. With the recent expansion of its manufacturing capacity overseas, it anticipates reaching 4.29 trillion won this year.

Confectionary maker Lotte Wellfood and the country’s leading tuna can producer, Dongwon F&B, both surpassed the 4-trillion won mark in sales last year. They expect to achieve 4.15 trillion won and 4.51 trillion won in sales this year, respectively.

Companies that surpassed 3 trillion won in sales last year and anticipate even higher figures this year include Ottogi, SPC Samlip, Nongshim, CJ Freshway and Pulmuone.

According to the Korea Food Industry Research Institute, for food companies to boost their revenues overseas, they must streamline operations to reduce costs and focus on developing localized products.

“(The) food industry is one of those industries where operating profits mostly remain low,” an official from the institute said. “But with these mega firms, we should stop thinking that the industry relies on the domestic market that traditionally offers low added values.”