SEOUL, November 27 (AJP) - South Korean food companies are accelerating their push into cosmetics and “inner beauty” products as slowing consumption and rising costs squeeze margins in their core businesses.
The globally recognized K-beauty sector — supported by steady global demand and a strong manufacturing base — is emerging as an attractive diversification route.
Industry sources say hy has expanded its probiotics research into skincare, developing products that use its HY7714 skin probiotic strain. Since debuting its first ampoule in 2023, the company has rolled out sunscreen and modeling packs, reinforcing a brand strategy that links nutritional supplements with topical skincare.
Other firms are securing manufacturing capabilities directly. HiteJinro Group, best known for its alcoholic beverages, acquired cosmetics ODM producer B&B Korea — maker of brands such as d’Alba and Medicube — through its subsidiary Seoyoung E&T. The move enables the group to extend its portfolio into broader lifestyle businesses.
Shinsegae Food has opted for an investment-led approach, committing 50 billion won to C&C International, a color cosmetics ODM company. Through participation in the “Beauty Synergy 2025 Private Equity Fund” established by Ascent Equity Partners, the company secured a 36.9 percent stake. The investment is aimed at establishing a stable revenue source without taking on direct manufacturing or sales operations.
Companies are drawn to the beauty sector’s different profit structure. Food production is vulnerable to swings in global grain prices and logistics costs, while cosmetics typically face lower cost volatility.
Premium and high-functionality products also tend to deliver higher gross margins, with branding and channel strategy playing an outsized role. Food companies, analysts say, can leverage strengths in raw-material development, quality control and marketing as they expand into beauty.
K-beauty’s global growth is another factor. South Korean cosmetics exports reached a record $5.5 billion in the first half of the year, up 14.8 percent from a year earlier, according to customs data. Markets are diversifying beyond China and the United States, with exports to South America climbing from $15.3 million in 2020 to $70.2 million last year, driven by rising demand in Brazil, Chile and other emerging markets.
“With domestic food consumption stagnating, there’s mounting urgency around finding new growth drivers,” an industry official said. “K-beauty, with its expanding global footprint, is increasingly seen as a promising option.”
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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