Harim Industries, which is experiencing poor performance with the home meal replacement (HMR) brand "The Meal" as a classic, is focusing on expanding its product portfolio by launching a seasoning line.
So far, Harim Holdings and others have been providing thousands of billions of won in "ammunition" support to Harim Industries. Recently, even Eco Capital, Harim Group's specialized financial company, has been investing funds in Harim Industries, indicating their desperate efforts to save "The Meal."
According to the relevant industry on the 14th, Harim Industries has recently completed item reporting for 11 types of seasoning products under the "The Meal" brand to the Ministry of Food and Drug Safety and is reviewing their release. The company aims to strengthen the "The Meal" lineup by launching seasoning products used for various stews and stir-fries.
Harim Industries launched "The Meal" in 2021. At that time, Harim stated its goal to grow "The Meal" into a mega brand with annual sales of 1.5 trillion won. The company promoted a premium strategy to differentiate itself by enhancing the quality of materials and supplies compared to competitors. It initially introduced HMR products such as instant rice, frozen dumplings, and frozen soup dishes, and added a noodle category last year.
However, due to high prices and a tough economy, the brand has been somewhat rejected by consumers. For example, "The Meal" noodles cost 7,040 won for four bags, roughly 1,700 won each. In contrast, competitors like Nongshim offer 1,000 won per bag, making "The Meal" noodles about twice as expensive.
"The Meal" is reportedly struggling to establish itself in the market nearly four years after its launch. The performance of Harim Industries has also been poor. While revenue has grown from 21.6 billion won in 2021 to 46.1 billion won in 2022 and 70.5 billion won in 2023, operating losses have also increased during the same period. Operating losses grew from 58.9 billion won in 2021 to 86.8 billion won in 2022 and 109.6 billion won in 2023.
From Harim Industries' standpoint, giving up on the "The Meal" brand is also a difficult decision. The HMR sector is continuously growing due to the increase in the number of households with one or two people and aging populations. The global expansion potential of the food business that Harim is conducting is also considerable.
So far, the group has been continuously injecting funds at the organizational level. Harim Group completed a governance restructuring at the end of 2022. Before this restructuring, NS Shopping, which was the parent company of Harim Industries, had provided funding through capital increases, but after the restructuring, Harim Holdings did so. Between 2021 and 2024, Harim Industries received 200 billion won from the group through capital increases.
Additionally, Harim Industries borrowed 28 billion won from its affiliate NS Shopping for facility investment last October at an interest rate of 4.6%. Less than three months ago, on the 9th, Eco Capital, another subsidiary of Harim Group, announced it had lent Harim Industries 6 billion won for operating funds, with an interest rate of 7.8%.
Although the scale of borrowing funds is not large, it is the first time Eco Capital has injected funds into Harim Industries. Eco Capital, as a specialized financial company of Harim Group, manages funds by selling commercial papers (CP) to affiliates of the group.
Harim Industries is continuously investing in expanding its food portfolio along with the completion of an HMR factory and increasing its production lines and logistics center. Capital expenditures (CAPEX) investment increased more than twofold from 43.9 billion won in 2022 to 97.5 billion won in 2023. Last July, it invested 68.9 billion won to expand the noodle factory and logistics center in Iksan, Jeollabuk-do.
An industry official noted, "Expanding the portfolio of 'The Meal' and continuing facility investments can be interpreted as a commitment to firmly pursue the premium strategy of 'The Meal.' However, given the fierce competition in the HMR market, we will need to wait and see whether 'The Meal' can contribute to the improvement of Harim Industries' performance."