'Corona Home Meal Benefits' Food Industry... Last Year's Performance Soared

Major Food Companies Struggle Amid COVID-19 Challenges
Supported by the 'Home Meal Trend' and Overseas Popularity of K-Food
Positive Outlook for Companies Ahead of Earnings Announcements

[Asia Economy Reporter Song Seung-yoon] Major domestic food companies have achieved remarkable results despite the adverse effects of COVID-19. The main reason is analyzed to be the continued growth driven by the home-cooked meal and K-food craze.

According to the industry on the 14th, Dongwon F&B's annual sales amounted to 3.4909 trillion KRW, up 10.11% from the previous year. Operating profit increased by 11.94% to 130.2 billion KRW. Although sales of dairy beverages declined, steady growth in sales of home meal replacements (HMR) and canned tuna led the overall performance. The sales growth of Dongwon Home Food, a food ingredient affiliate, also contributed.

Lotte Chilsung Beverage's consolidated sales last year reached 2.5061 trillion KRW, an 11% increase from the previous year. Operating profit also rose by 87.4% to 182.2 billion KRW. This was mainly due to increased sales of bottled water, carbonated drinks, and energy drinks. Beverage business sales grew 7.8% year-on-year to 1.6729 trillion KRW, and operating profit increased 21.8% to 150 billion KRW. The liquor division also posted unexpectedly strong results. Liquor business sales rose 10.3% to 672.2 billion KRW, and operating profit turned positive at 24.5 billion KRW.

Orion also saw its consolidated sales last year increase by 5.8% to 2.3594 trillion KRW. However, operating profit slightly decreased by 0.9% to 372.9 billion KRW. Sales increased due to aggressive new product launches and significant growth in overseas subsidiaries, and despite adverse factors such as soaring raw material and logistics costs, operating profit only slightly declined.

Companies yet to announce their earnings also have optimistic outlooks. CJ CheilJedang is expected to announce its last year's results this afternoon. Earlier, financial information provider FnGuide forecasted CJ CheilJedang's annual sales to increase by 6.4% year-on-year to 25.8085 trillion KRW. Operating profit was predicted to rise 19.2% to 1.6201 trillion KRW. In the food industry, whether CJ CheilJedang can maintain operating profit above 1 trillion KRW has been a hot topic. However, it is widely expected that, following 2020, last year’s operating profit also comfortably exceeded 1 trillion KRW. Despite rising raw material costs, the company defended profits through price increases and gradually increased its overseas sales ratio to about 60%, expecting to achieve results in overseas business as well. The industry believes that HMR sales led by brands such as Bibigo, Hetbahn, and Gourmet, along with popular overseas food products like dumplings and kimchi, drove the performance.

Daesang is expected to report sales of 3.3295 trillion KRW, up 6.9% from the previous year, and operating profit of 154.1 billion KRW, down 11.6%. The popularity of key products such as Jongga Jip kimchi, sauces, and export hit products like seaweed is analyzed to have contributed to the improved performance. An industry insider commented, "Although there were many concerns about profitability due to raw material price increases, most companies defended profits through price hikes, and compared to other industries, the COVID-19 situation acted as a benefit, resulting in generally favorable performance."

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