From Startups to Large Corporations... Accelerating 'Digital Transformation' in the Food Ingredients Industry

[Asia Economy Reporter Donghyun Choi] Recently, from startups to large corporations, the food ingredient distribution industry is focusing on digital transformation.

According to the distribution industry on the 11th, the domestic food ingredient distribution market size reaches 55 trillion KRW. However, most operations are still analog, increasing the need for digital transformation.

Amid this, companies leading the digitalization of the food ingredient market are gaining attention, including startups that manage restaurant owners' operating costs through IT solutions, B2B platforms that have established early morning delivery systems for food ingredients, artificial intelligence (AI) food ingredient ordering systems, and comprehensive online malls specializing in food ingredients.

The food ingredient cost management app ‘Dodocart,’ operated by the startup Spoqa, helps simplify restaurant operating cost management. Although food ingredient purchase costs are among the most important expenses in restaurant operations, busy store owners often fail to quickly respond to real-time price changes and unnecessary expenditures. To address this, Dodocart provides a free IT solution that analyzes expenditure costs when users photograph and register food ingredient purchase receipts in the application.

The analysis report informs users about the store’s food ingredient usage volume, price changes, and changes in suppliers. It also provides monthly expenditure analysis, order amounts versus actual payment amounts, and usage ratios by supplier.

In addition to cost management functions, it offers a ‘Find Suppliers’ feature, enabling food service business operators to access more information about food ingredient suppliers. Food ingredient suppliers can also find new restaurant clients, serving as a digital bridge connecting the two parties.

The online food ingredient B2B platform ‘Foodpang’ offers restaurant owners free early morning delivery services based on wholesale markets in Seoul and Busan when they order food ingredients and necessary restaurant supplies via the app. By delivering directly from wholesale markets without complex intermediate distribution processes, it reduces unnecessary distribution costs and provides food ingredients at reasonable prices. The app conveniently updates the daily auction price market, allowing purchases at low prices.

Foodpang’s delivery system places ordered food ingredients into the restaurant refrigerator if the store entrance password is entered upon app registration. There is no minimum order amount restriction, so even small orders can be delivered, quickly gaining popularity among restaurant owners.

CJ Freshway’s online food ingredient ordering platform ‘OnlyOneFoodNet’ is a customer-exclusive system used by about 14,000 clients when trading food ingredients with CJ Freshway. OnlyOneFoodNet has accumulated vast data from customer information to purchase history and has developed an AI algorithm specialized in recommending food ingredients based on this data.

Since introducing the customized food ingredient recommendation service, sales generated through the ‘cost-effectiveness product recommendation feature’ account for about 90% of total product recommendation service sales. This leverages the fact that when purchasing food ingredients, customers often buy existing products rather than new ones, recommending cheaper or trendier food ingredients based on purchase data. It is currently being piloted with some clients and plans to expand to all clients within the second half of the year.

Daesang recently revamped its comprehensive food ingredient specialty online mall and renamed it ‘BestOn.’ This aims to enhance online shopping convenience for large-quantity food ingredient businesses in line with e-commerce trends. BestOn focuses on improving shopping accessibility for food service workers by establishing specialized sections by industry and brand halls.

It also provides customized services that recommend desired food ingredients by analyzing customer data and subscription delivery services that regularly deliver specific products on desired dates. Additionally, a new O2O (online-to-offline) service linking the online mall with offline stores has been launched. Orders placed before 2 p.m. can be delivered the same day through nearby offline stores. Currently, this service operates only at the Goyang branch, with plans to expand to all 12 branches within this year.

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