With domestic consumption slowing and the burden of high inflation persisting, the outlook for Korea's food industry this year is relatively bright. As the popularity of K-food spreads in global markets, projections point to continued sales growth led by corporations with a high share of overseas business. As in last year, five companies are expected to surpass 4 trillion won in annual sales this year.
According to FnGuide on the 11th, among the 10 major food corporations with sales exceeding 3 trillion won, all eight corporations with compiled sales forecasts for this year are expected to grow from a year earlier.
FnGuide consensus projects CJ CheilJedang's sales this year at 29.5413 trillion won, up 0.62% from a year earlier. The securities market expects the food institutional sector to continue modest growth centered on overseas markets. In particular, analysts say sales are expanding in Europe through new distribution channels. In addition, from the fourth quarter, the impact of resuming operations at the dessert plant in the United States is expected to be reflected in sales.
LOTTE Chilsung Beverage, which joined the "4 trillion won sales club" for the first time last year, is also expected to post 4.0297 trillion won in sales this year. Although the growth rate is not high at 0.13% from a year earlier, it is assessed that the growing profit contribution from overseas subsidiaries will lead overall performance improvement. The securities market also analyzes that the domestic market will show a gradual rebound as consumer sentiment recovers and raw material burdens ease, passing its trough.
Ryu Eun-ae, an analyst at KB Securities, said, "In the third quarter, LOTTE Chilsung's overseas subsidiaries' sales rose 9.5% from a year earlier, and operating profit increased 44.8%," and noted, "Despite uncertainties such as a typhoon in the Philippines, materials and supplies expense pressure in Pakistan, and customs clearance issues in Myanmar, it maintained solid profit growth."
LOTTE Wellfood's sales forecast for this year is 4.22 trillion won, up 4.35% from a year earlier. Analysts say the full reflection of price hikes in the confectionery institutional sector and the gradual stabilization of cacao materials and supplies prices will act positively for performance improvement. LOTTE Wellfood plans to raise the share of overseas sales from the current 20% to over 35% by 2028.
The securities market expects LOTTE Wellfood's performance momentum (turning point) to become clearer next year than this year. Ha Hee-ji, an analyst at Hyundai Motor Securities, said, "On top of the cacao price stabilization effect being fully reflected next year, if the new Pune plant and the Pepero plant expansion at the India subsidiary are completed in the second half, it could lead to broader distribution for frozen treats and new sales from Pepero."
A performance forecast for Dongwon F&B this year has not yet been compiled. Last year's sales came to 4.4836 trillion won on a consolidation basis. Based on cumulative sales through the third quarter this year, it is expected to comfortably exceed 4 trillion won again. Cumulative sales for the third quarter came to 3.7103 trillion won, up 9.1% from a year earlier. If Dongwon F&B surpasses 4 trillion won in sales this year, a total of five companies—CJ CheilJedang, Daesang, LOTTE Chilsung Beverage, and LOTTE Wellfood—will join the 4 trillion won sales club.
Results from strengthened overseas marketing by ramyeon makers also stand out. Nongshim is projected to post 3.5224 trillion won in sales this year, up 2.43% from a year earlier. Lee Da-yeon, an analyst at DAOL Investment & Securities, said, "In October, sales of the Shin Ramyun brand in the United States rose 30% from a year earlier, showing the marketing effect," and added, "In China, by strengthening sales centered on new products across online and offline channels, third-quarter sales increased 31.8% from a year earlier."
Samyang Foods, led by "Buldak spicy ramyeon," will not exceed 3 trillion won in annual sales this year, but its sales forecast is 2.3787 trillion won, a 37.7% increase from a year earlier.
CJ Freshway is a corporation focused on the domestic market, but this year's sales forecast is 3.5136 trillion won, pointing to a relatively high 8.96% growth rate from a year earlier. Although the restaurant industry struggled, analysts attribute the gains to stronger food material sales, increased wins of new catering contracts, the absorption merger of Fresh One, and sales efficiency gains from restructuring the catering business unit.
A food industry official said, "As K-food awareness spreads and begins to translate into actual sales, the performance of overseas subsidiaries is taking root as a structure that supports overall results," and added, "Recently, as local production and distribution networks have stabilized, this has been a positive factor for profitability."