HY and Paldo, previously focused on the domestic market and Asian expansion, are accelerating their entry into the U.S. market with the backing of BTS. Their newly launched global food and beverage brand, ARIH, has seen early success in the U.S., raising industry speculation about whether this project could mark a turning point for their international business growth.
According to the food industry on June 9, ARIH, a global food and beverage brand co-developed by HY and its subsidiary Paldo with BTS, debuted in April through Walmart in the U.S. and has now been officially launched in the domestic market. This bold move reverses the traditional strategy of gaining popularity in the domestic market before venturing abroad, highlighting the urgency for both companies to expand internationally.
While HY has established a strong competitive edge in the domestic fermented dairy and probiotic market, its international business performance has been limited. In 2024, the company began exporting food products, focusing on home meal replacements (HMR), snacks, and ready-to-drink coffee, but reported only 3 billion won in overseas sales during its first year, accounting for less than 1% of its total revenue of 1.68 trillion won.
Paldo has also faced challenges in penetrating the North American market, which is considered a crucial target. Last year, Paldo recorded approximately 150 billion won in exports, with successful operations in Russia (about 500 billion won) and Vietnam (about 100 billion won), but its presence in North America remains relatively weak compared to competitors like Nongshim and Samyang Foods, which have increased their overseas sales ratios to 40% and 80%, respectively, by leveraging the U.S. market.
The collaboration between HY and Paldo through BTS has led to the creation of ARIH, with both companies establishing a local subsidiary, HYH America, at the end of last year. The ownership structure consists of 46% for HY, 35% for HYBE, and 19% for Paldo. BTS has played a significant role beyond just being a promotional model, participating in the initial brand planning, product flavor, concept, and packaging design, thereby enhancing the brand's value.
This synergy has resulted in a rare achievement for a new brand, with ARIH being available in Walmart stores across the U.S. from the outset. Within just three days of its U.S. launch, ARIH earned a 'bestseller' badge on Walmart's online platform, and some stores experienced sellouts, indicating early commercial success.
The brand's design, aimed at global consumers' lifestyles, has also been well-received. ARIH features a lineup of 28 products, including modern noodles, post-biotic energy drinks, and dual-biotic sodas, presenting a new perspective on food that transcends traditional K-food by promoting a 'modern balanced food' concept. The goal is to encourage a healthier food culture rather than relying on overly stimulating foods.
In South Korea, ARIH has begun sales through Fredit and Naver Smart Store, and recently expanded its distribution network by introducing beverage products in Mega MGC Coffee locations nationwide. Lotte Duty-Free will also start selling ARIH products at Gimhae Airport, Busan, and Incheon Airport's second passenger terminal, with plans to include Gimpo Airport starting June 19.
Industry experts view the ARIH project as a critical juncture for Paldo and HY's international business expansion. While the initial market entry has been facilitated by BTS's fanbase, the long-term success will depend on the product's ability to encourage repeat purchases from local consumers and maintain competitive distribution.
Both companies plan to establish ARIH as an independent global brand and significantly expand its market reach to Japan, Mexico, and Canada. An official from HY and Paldo stated, "ARIH represents a new direction for targeting the global food market, and we will successfully establish the brand through tailored marketing strategies that align with local market conditions."
* This article has been translated by AI.
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