The era of third-generation Oner management is taking hold in Korea's food industry. With the domestic slump and a global slowdown overlapping, growth limits have become clear for legacy core businesses alone, and young Oners are stepping to the fore by taking charge of strategy, global, and new-business units. Some say they have climbed onto a testing ground where they must prove the legitimacy of succession through tangible results.
Orion has joined this trend. Orion recently accelerated "third-generation management" by promoting Executive Vice President Dam Seo-won (37), the eldest son of Chairman Dam Cheol-gon, to senior executive vice president in its regular executive reshuffle. At the same time, the company appointed Dam to lead the newly created Strategy Management Headquarters. He became the top executive of the group's strategy organization just over four years after joining in 2021.
◇ Organizational reshuffle to leap to a comprehensive food company
According to Orion on the 9th, the newly established Strategy Management Headquarters includes the following under its umbrella: ▲ new business team ▲ overseas business team ▲ management support team ▲ CSR team. The overseas business team and new business team had previously reported directly to the CEO, and CSR had been under the audit committee. With this reorganization, Orion effectively created a control tower that consolidates key functions to oversee the discovery of future growth engines. Orion said, "The Strategy Management Headquarters is responsible for establishing mid- to long-term management strategies, conducting management diagnostics, and improving corporate culture, while overseeing future businesses."
In the industry, some interpret the appointment of Dam as head of the core unit created for a leap to a global comprehensive food company as related to the future succession structure. Delivering tangible results from the strategy organization can secure justification for a transfer of control. It reads as a signal that the group will entrust Dam with designing and executing its growth direction.
Born in 1989, Dam graduated from New York University with a degree in communications and earned MBA degrees from Seoul National University and Peking University in China. After working about two years at Kakao Enterprise, Dam joined the Orion Group in 2021. Since then, Dam rose from senior managing director to executive vice president and now to senior executive vice president in a lightning-fast promotion.
Orion's mid- to long-term goals are 5 trillion won in revenue and 1 trillion won in operating profit. Orion currently delivers stable results as a food corporations, but is seen as lacking growth drivers. An industry official said, "Dependence is high on existing steady sellers like Choco Pie, and there has been no new product since Choco Pie capable of shaking up the market," adding, "With the domestic confectionery market entering a stagnant phase due to low birthrates and the spread of health-centered consumption trends, it will be hard to expect explosive growth with a simple expansion of the product lineup."
Against this backdrop, the core assignments given to Dam are "global" and "bio." More than 60% of Orion's revenue comes from overseas, but exposure is concentrated in certain countries such as China and Russia. In China, competition is intensifying amid the rise of local brands and changes in distribution structures.
According to market research firm Euromonitor, Orion's share in China's snack market fell from 1.6% in 2016 to 0.8% in 2017 and has since fluctuated between 0.8% and 0.9%. Han Yu-jung, an analyst at Hanwha Investment & Securities, said, "While Orion has employed several strategies such as new product launches, shifting to an indirect sales system, and responding to snack shops, there is still no sign of change enough to reverse the trend."
In Russia, exchange-rate volatility has increased since the war. The Vietnam subsidiary, which had posted high growth, is also seeing its growth slow recently due to weakened consumption. Still, some expect the operating environment to be relatively favorable this year. Positive factors cited include a higher share for China's snack-shop channel, increased pie and biscuit sales following the addition of new lines in Russia, and the strengthening of the yuan and ruble.
Kim Hye-mi, an analyst at Sangsangin Investment & Securities, said, "Since the first half of 2023, when performance at key overseas subsidiaries such as China and Vietnam began to slow, Orion's share price has moved sideways within a range," adding, "It is a result of the base effect after strong growth during the pandemic and sluggish local economies, but this year, we expect growth in revenue and operating profit at key subsidiaries, including a recovery in China and Vietnam."
◇ Bio business must deliver results
The bio business is also an important proving ground to gauge Dam's management performance. Orion has identified bio as a second growth pillar beyond its core food business and has continued to invest. However, the prevailing view is that it will take time before visible results emerge.
In March last year, Orion invested 550 billion won to acquire a 25.7% equity stake in LigaChem Biosciences. It was the largest investment in Orion's history. Dam is known to have led the stake acquisition process and now serves as an internal director at LigaChem Biosciences, participating in key decision-making.
Orion regards LigaChem Biosciences as a global-level corporations with capabilities to develop next-generation anticancer ADCs. However, LigaChem Biosciences is still in the red, with operating losses of 50.4 billion won in 2022, 80.8 billion won in 2023, and 20.9 billion won in 2024.
An industry official said, "Dam is no longer a 'successor in preparation,' but stands as a manager to be judged by performance," adding, "Diversifying global business and delivering bio results will act as key variables in the future succession structure."