"World Enthralled by Mandu" All-in on K-Food Investment... Online System & Eco-Friendly Management (Comprehensive)

Food Industry's Post-Corona Strategy This Year
Real Battle in Ready Meals Targeting 5 Trillion Won... Quality Competition
Eco-Friendly Management Strategy Without Labels Is Essential

[Asia Economy Reporter Lee Seon-ae] The food industry, which experienced an unexpected boom last year due to the impact of the novel coronavirus disease (COVID-19), is now moving swiftly to continue its growth in the 'post-COVID' era. In overseas markets, K-food investments are accelerating to further enhance the value of ramen, dumplings, and other products that have rewritten the history of the Korean food wave by being reevaluated as emergency foods amid the COVID-19 impact. In the domestic market, efforts are focused on improving the quality of home meal replacements (HMR), which have dominated dining tables, while also speeding up the strengthening of online food systems suitable for the untact (contactless) era. Additionally, there is a plan to concentrate on ESG management strategies to establish a foundation for sustainable management.

◆Rapid Growth in HMR and Strengthening Online Systems

Companies are struggling to gain an advantage in the rapidly growing yet fiercely competitive HMR market. Especially as the market is being reorganized into premium convenience foods, they are putting effort into differentiating taste and quality.

According to the Korea Agro-Fisheries & Food Trade Corporation on the 16th, the domestic HMR market size exceeded 4 trillion won last year. The corporation had predicted the HMR market size to reach about 5 trillion won in 2022, but it now expects this to happen much earlier due to COVID-19.

The corporation forecasts that the sales of food and beverage manufacturing (based on manufacturers with one or more employees) will grow by 3.9% to approximately 136.2 trillion won this year compared to last year. It analyzed that "under the influence of COVID-19, products such as HMR and meal kits that can be enjoyed at home will lead the growth trend."

This year, the HMR market is expected to evolve one step further into "healthy convenience foods." CJ CheilJedang, which has led market growth, launched the premium HMR brand 'The Bibigo' last November to lead the market reorganization toward healthy convenience foods. The Bibigo brand emphasizes sodium reduction and nutritional enhancement. According to Euromonitor, the healthy convenience food market in advanced countries such as the U.S. and Europe is formed at a scale of 10 trillion won. A CJ CheilJedang official explained, "The domestic HMR market will also be upgraded toward healthy convenience foods."

The industry is also focusing on strengthening online systems. They attach significance to the growth trend of online food market transaction volume. The online food market transaction volume surged from 13.2 trillion won in 2017 to 18.7 trillion won in 2018, and 26.7 trillion won last year. Especially last year, although official statistics are not yet available, it is estimated to have exceeded 40 trillion won. The transaction volume up to October alone was 34.6 trillion won, a 60.3% increase compared to the same period last year, exceeding the total transaction volume of 2019 by 8 trillion won.

Dongwon Group recently integrated Dongwon F&B's online business division's food specialty shopping mall (Dongwon Mall), Dongwon Home Food HMR division's online grocery market (The Banchan&), and Dongwon Home Food Geumcheon division's livestock online mall (Geumcheon Meat) into Dongwon Home Food's online business division. Korea Yakult launched 'Predit,' an online integrated platform that greatly expanded the existing online mall 'HiFresh.' It sells dairy products, health functional foods, fresh foods, cosmetics, women's and baby products, and daily necessities together. CJ CheilJedang revamped the paid membership system 'The Prime' of its official online mall 'CJ The Market.' Samyang Foods introduced the Samyang Super Snack Pack on its online mall 'Samyang Mat Shop,' considering the increase in snack consumption by people staying at home. This is a planned product composed of Samyang Foods' representative ramen and snacks with a supermarket concept. Ottogi created the recipe website 'O Kitchen' to support 'Ottogi Mall.'

◆Fervent Investment in K-Food Overseas and Focus on ESG Management Strategies

Last year was the brightest year for K-food. Exports of ramen, kimchi, ice cream, and other products reached record highs, and CJ CheilJedang's 'Bibigo Dumplings' achieved annual sales of 1 trillion won, rewriting the history of the food industry.

Companies are strategizing to prepare for the post-COVID era through overseas business expansion. First, CJ CheilJedang is actively developing the North American market, building on the Bibigo Dumplings' success of achieving 1 trillion won in overseas sales last year. Recently, with support from the South Dakota state government located in the U.S. Midwest, they secured a 1.7 million pyeong (approximately 5.6 million square meters) production site in Sioux Falls. By establishing their eighth production base, they plan to actively discover the next generation of K-food to succeed dumplings across the western, central, southern, and eastern U.S. regions. A CJ CheilJedang official said, "We will expand the achievements in North America to other countries, grow Bibigo into a 'K-food global mega brand,' and leap forward as a truly global company."

Daesang aims to achieve 'global business sales of 1 trillion won' by accelerating its overseas market penetration, including the U.S., with its Cheongjeongwon and Jongga brands. Nongshim is also accelerating the expansion of local factories overseas in the U.S. and China.

Meanwhile, the food industry has decided to focus on eco-friendly management. The judgment is that manufacturing good food while considering the environment ultimately builds consumer trust and pursues sustainable growth. In the end, the future means that value consumption for the environment will determine growth potential.

CJ CheilJedang is reducing the amount of plastic used in Hetbahn (ready-to-eat rice). The plastic thickness of Hetbahn products was reduced from 1.3 mm in the past to 0.7 mm, decreasing plastic usage by more than 40%. Furthermore, they plan to continuously expand eco-friendly packaging technology across all products. SPC Group is applying eco-friendly printing technology to packaging films that wrap bread and food through its packaging production affiliate SPC Pack, applying it to all products of affiliated brands such as Paris Baguette and SPC Samlip. Binggrae was the first in the industry to reduce plastic usage by mixing calcium carbonate into the cup of its spoonable yogurt Yoplait.

Orion has invested 11.8 billion won since 2018 to apply eco-friendly printing technology that drastically reduces ink usage to its products. They plan to strengthen the production of environmentally friendly packaging by investing an additional 4.8 billion won in flexographic printing facilities. Currently, six products including 'Poca Chip,' 'Taste of the Sun Sun,' and 'Oh! Potato' use flexographic printing for packaging, and 16 products including 'Choco Pie,' 'Bae Bae,' and 'Choco Song-i' use it for individual inner packaging. An Orion official said, "Over the past six years, we have been doing our best to practice Orion's unique ethical management by improving and streamlining production facilities to protect the environment and return it to consumers." He added, "We will accelerate eco-friendly management to achieve 'sustainable growth' that promotes both environmental protection and growth."

Lotte Chilsung Beverage launched the industry's first label-free bottled water, Isis ECO, last year, receiving great response from consumers who value environmental value consumption. About 10.1 million units were sold throughout the year. A Lotte Chilsung Beverage official said, "Isis ECO is an eco-friendly product that removed the label, which is like the face of the product expressing brand identity, prioritizing a clear and clean environment above all." He added, "Consumer response is steadily increasing, and this year we plan to focus more on expanding sales channels."

This content was produced with the assistance of AI translation services.