S. Korean food firms predicted to join '3 trillion-won sales club' boosted by sales at home and abroad

By Park Sae-jin Posted : January 25, 2024, 15:25 Updated : January 25, 2024, 15:25
Courtesy of Pulmuone
[Courtesy of Pulmuone]

SEOUL --South Korean food companies, propelled by the global popularity of Korean cuisine and the influence of Hallyu, the Korean cultural wave, are achieving remarkable success. Market analyst FnGuide's data indicates that three major South Korean food companies -- Pulmuone (a food product and ingredient maker), CJ Freshway (a food solution company), and beverage maker Lotte Chilsung -- are anticipated to achieve sales exceeding three trillion won ($2.2 billion) in 2023.

Pulmuone, with a focus on promoting a healthy diet and offering alternative meat products, reported 43 billion won in sales for "Vegetable Earth Diet," an alternative meat brand, in August 2023, just a year after the brand's launch in August 2022. This vegan meat brand features a diverse lineup, including soybean-based canned ham and ready-to-eat meal products such as soybean protein-based dumplings and Bulgogi burritos containing stir-fried alternative meat marinated in soy sauce.

The domestic vegan meat market has witnessed substantial growth, driven by increasing demand from approximately 2 million vegans in South Korea. Data from the Korea Agro-Fisheries & Food Trade Corporation indicates that the South Korean vegan meat market, valued at 25.7 billion won in 2022, is projected to reach 29.5 billion won by 2025. The number of vegans and consumers who favor a vegetable-centered diet is consistently increasing, thanks to the raised awareness of healthy eating.

In a strategic move to tap into the global market, Pulmuone entered into a partnership with the South Korean office of International Flavors & Fragrances, a United States-based food and beverage ingredient developer, in 2021. Additionally, the company is supplying its vegan meat products to 18 American universities, including the University of Massachusetts Amherst.

Pulmuone is also planning to make a foray into the global food vending machine industry with "Robot Chef," an autonomous instant food cooking machine that can cook and serve heat-meal-replacements (HMRs) such as spicy beef soup, tonkatsu ramen, and spicy seafood noodle soup. The food maker showcased the automated vending machine at the Consumer Electronics Show (CES), the world's largest annual electronics exhibition held in Las Vegas in early January.

In the North American market, Pulmuone recorded $72.2 million in sales of Asian noodles in 2022. The food maker expanded its fresh noodles production plant in California in 2023, targeting American consumers. Through the expanded production facility, Pulmuone's annual capacity increased to 24 million units of 190-gram noodle packs. Pulmone's popular products include Beef Japchae. Since its release in March 2022, more than 300,000 units of Beef Japchae have been sold as of May 2023.

"We analyze that domestic concession operations and overseas sales helped our sales grow in 2023. We plan to maintain our position as the leading pioneer in the sustainable food industry by nurturing the 'Vegetable Earth Diet' brand as the key growth engine of the company," Pulmuone's communication manager Chung Byeong-ho told Aju Korea Daily on January 25.

CJ Freshway, the food distribution and solution wing of South Korea's food and entertainment giant CJ Group, is also targeting the domestic healthy diet market. The company introduced a lineup of plant-based burgers in 2022. The vegan burger, known as "No Meat Cheese Cutlet Burger," is supplied to schools in Seoul to familiarize students with healthy food menus. The capital city mandates school canteens to offer vegetarian menus at least twice a month.

The food solution wing of CJ Group is also aiming to attract operators of canteens and large-sized restaurants with cooperative chef robots that assist human coworkers in preparing and cooking food for large groups of people. The company showcased a smart robot cook at a food solution fair held in Seoul in October 2023, offering fried chicken for visitors. According to data released by the state-run Korea Institute of Science and Technology Information, the domestic collaborative robot market is expected to reach $366.5 million in 2025.

The successful sales of CJ Freshway in 2022 were boosted by the economic recession, leading to an overall increase in the costs of dining in restaurants. Consumers opted to eat at company canteens rather than dine at restaurants during lunchtime, increasing demand for food ingredients and in-house canteens.

Lotte Chilsung's sales were boosted by the popularity of Saero, a sugar-free Soju brand. South Korean consumers' desire to live a healthy life was also reflected in their drinking habits. Young consumers favored the sugar-free Soju, a Korean traditional vodka-like spirit made with potato starch, produced by South Korean confectionary giant Lotte's beverage wing.

Unlike ordinary Soju products bottled in green-colored glass bottles, Saero boasts an elaborate bottle label design bearing an image of a nine-tailed fox called Gumiho, a mythical creature familiar to Korean people due to its frequent appearance in folk tales. The Gumiho is often characterized as a cartoon character through marketing promotions designed to capture young consumers.

Lotte Chilsung also captured both young and middle-aged consumers with the sugar-free version of Milkis, a soda drink product first released in the late 1980s. While the zero-sugar version of the nostalgic soft drink gained popularity among domestic middle-aged consumers, it also captured the hearts of consumers in Taiwan, achieving annual sales of more than 10 million cans in 2022.
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