In the End, Ottogi Takes the Lead and Raises Ramen Prices

Price Increase After 13 Years Due to Cost Burden
Snackmyeon and Yukgaejang Average 11.9%
Nongshim and Samyang Also "Carefully Reviewing"

[Asia Economy Reporter Seungjin Lee] Ottogi has decided to raise the price of ramen, including 'Jin Ramen,' for the first time in 13 years. Nongshim, Samyang Foods, and others are also expected to raise ramen prices soon.

According to the ramen industry on the 16th, Ottogi will increase the prices of major ramen products, including Jin Ramen, by an average of 11.9% starting next month on the 1st. Jin Ramen (mild and spicy flavors) will rise from 684 won to 770 won, a 12.6% increase; Snack Ramen will go from 606 won to 676 won, up 11.6%; and Yukgaejang (cup noodles) will increase from 838 won to 911 won, an 8.7% rise.

This price increase by Ottogi is the first in 13 years. During this time, the company has struggled with rising costs due to increases in labor expenses and raw materials such as flour and palm oil. Earlier this year, when it was revealed that Ottogi was considering raising ramen prices, the plan was withdrawn amid criticism questioning whether even affordable food like ramen should see a price hike. However, as raw material prices continued to rise for nearly a year, the company ultimately implemented the price increase.

Generally, raw material costs account for 50-60% of the product price for ramen. Recently, international prices for most key raw materials needed for ramen, including wheat, wheat flour, soybeans, and palm oil, have surged, raising production costs. As of last month, palm oil and wheat flour prices increased by 71% and 27%, respectively, compared to a year ago. Because of this, ramen prices faced upward pressure of at least 10% in the first half of this year alone.

The ramen industry has been engaged in a cautious standoff over who would be the first to raise prices, mindful of public opinion. An industry insider said, "Since ramen price increases directly impact consumer price burdens, Ottogi must have made this decision after deep consideration," adding, "Ultimately, other ramen companies will have no choice but to raise prices as well."

Earlier this year, Shin Dong-won, chairman of Nongshim, stated, "We are considering raising ramen prices, but nothing has been decided yet." However, with operating profits plunging sharply in the first quarter and second-quarter operating profits expected to decline by more than 50% compared to the previous year, a price increase in the second half of the year appears inevitable. Samyang Foods is also reportedly reviewing price increases, although the timing and extent have not been determined. Nongshim has frozen ramen prices since 2016, and Samyang Foods since 2017.

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