As the institutional catering market continues to grow, catering companies are accelerating efforts to diversify. They are leveraging their purchasing power for food ingredients, logistics networks, and menu development capabilities secured in their core business to expand into online platforms, care food, and overseas markets, aiming to secure new growth engines.
According to the industry on the 11th, major catering companies such as CJ Freshway, Hyundai Green Food, and Samsung Welstory all saw sales rise in the second quarter of this year. CJ Freshway's second-quarter sales came to 923.2 billion won, up 4.5% from a year earlier. New institutional catering orders rose 43.7% year over year. Securing military catering business sites such as the Army Training Center and the 1st Marine Division also helped boost sales. Operating profit, however, fell 14.2% to 23.5 billion won.
Hyundai Green Food posted second-quarter consolidation sales of 595 billion won and operating profit of 38.1 billion won. They rose 7.8% and 23.4%, respectively, from a year earlier. By securing new catering business sites at medium and large corporations, the number of meals served increased, and the resulting rise in ingredient supply also contributed to better results.
Samsung Welstory also reported second-quarter sales of 886 billion won and operating profit of 48 billion won. They increased 7.1% and 6.6%, respectively, from a year earlier. Expansion of new catering business sites and growth in the ingredient distribution business drove performance.
Behind the catering industry's growth despite the slump in dining-out is demand for relatively affordable in-house cafeterias. As dining-out prices rise and lunchtime costs grow burdensome, more office workers are turning to in-house cafeterias. The trend of corporations supporting meals as an employee benefit is also working positively for the institutional catering market.
◇ Preparing the "next meal ticket" when catering is strong… hedging against growth limits
Catering companies are broadening their business scope instead of relying solely on growth in their core operations. Each company is choosing a different direction.
CJ Freshway is expanding its online ingredient distribution business centered on the B2B ingredient platform "Sikbom." More than 200,000 types of ingredients are listed on Sikbom. CJ Freshway's strategy is to combine its product sourcing capability and nationwide cold-chain logistics network with Sikbom to broaden its customer base to small and midsize restaurant operators.
However, the expansion into new businesses is also creating expense burdens. The decline in CJ Freshway's second-quarter operating profit was affected by upfront investment costs for Sikbom, including promotions and marketing.
Hyundai Green Food is cultivating care food as a new growth axis. With an aging population and rising demand for health management, it expects the market for foods tailored to individual health conditions and nutrition standards to grow, and is expanding related businesses.
Through its flagship brand "Greeting," it sells meal plans designed for health management purposes such as low sugar and low calories. In Mar., it also expanded its lineup by unveiling frozen care food, the "Low-Speed Lunchbox 5-day Package" and the "Low-Sugar Plan 5-day Package."
Samsung Welstory is betting on overseas markets as a growth engine. It applies its experience operating large-scale institutional catering and its ingredient supply chain built domestically to overseas business sites.
Samsung Welstory operates catering businesses in China, Vietnam, Hungary, and the United States. By expanding its client base beyond domestic corporations with overseas production bases to local corporations, it is growing the scale of its global business.
Catering companies' push to diversify is also related to the structural characteristics of the institutional catering business itself. An industry official said, "Institutional catering is relatively resilient to economic cycles, but sales are largely determined by the number of business sites and meals served," adding, "Without additional orders from new corporations, factories, schools, hospitals, and military units, it is difficult to maintain a high growth rate."
Cost pressures are also heavy. Because catering companies purchase ingredients, cook directly, and must deploy staff at each business site, they are sensitive to increases in ingredient costs, labor costs, and logistics costs. Meanwhile, they often operate under fixed prices through contracts of a set duration with corporations or institutions, making it difficult, unlike ordinary restaurant operators, to immediately pass higher costs on to selling prices.
Shifting customer demands for catering services are also having an impact. In the past, the key was to provide safe meals to many people at reasonable prices; recently, health, taste, personalization, and convenience have all become important.
Accordingly, new businesses such as care food, Foodtech, artificial intelligence (AI), and kitchen-less operations are showing a trend of reconnecting with core catering. Rather than just growing standalone ventures, companies are applying technologies, products, and services secured in new businesses to existing catering to boost competitiveness.
An industry official said, "From a catering company's standpoint, it is necessary to extend existing purchasing power for ingredients, logistics networks, menu development and nutrition design, and large-scale cooking capabilities into other businesses to diversify revenue sources," adding, "In the long term, the extent to which customers and infrastructure secured in the catering business are expanded and monetized into new businesses will determine each company's growth potential."