Nongshim Raises Shin Ramyun Price Again After One Year... Signal of a Series of Instant Noodle Price Increases? (Comprehensive)

Major Ramen and Snack Price Increases After Chuseok... Average 11.3%, 5.7% Rise
Reincreased After One Year Due to Cost Burden and Poor Performance

[Asia Economy Reporter Eunmo Koo] Nongshim, the leader in the ramen industry, will raise the prices of major ramen products such as Shin Ramyun after the Chuseok holiday. Amid ongoing burdens from rising international raw material prices like flour and palm oil, the company has resorted to price hikes as a solution, compounded by a poor performance marked by a domestic market deficit for the first time in 24 years. The industry’s top player’s decision to increase prices is expected to trigger a chain reaction of price hikes across ramen products.

Nongshim announced on the 24th that starting from the 15th of next month, it will raise the wholesale prices of major ramen and snack products by an average of 11.3% and 5.7%, respectively. After Chuseok, 26 ramen and 23 snack brands will see price increases, with key products rising by 10.9% for Shin Ramyun, 9.9% for Neoguri, 6.7% for Saewookkang, and 5.9% for Honey Twisties based on wholesale prices. Accordingly, the price of Shin Ramyun, currently sold at an average of 736 won per pack in large supermarkets, is expected to adjust to about 820 won, and Saewookkang’s price will rise from 1,100 won to approximately 1,180 won.

Nongshim also raised major ramen prices by an average of 6.8% last August. The flagship product Shin Ramyun was increased by 7.6%, with the wholesale price per pack rising from 676 won to 736 won in large supermarkets, and from 830 won to 900 won in convenience stores. With another price hike within a year, the convenience store price of Shin Ramyun is approaching 1,000 won per pack.

This price adjustment is interpreted as a measure to overcome worsening profitability caused by rising costs of international raw materials such as flour and palm oil, as well as increased logistics and labor expenses. Since the Russian invasion of Ukraine earlier this year, volatility in international grain prices has increased, and cost pressures have mounted due to the rising won-dollar exchange rate and maritime freight charges, making price hikes inevitable.

Nongshim explained that since April, raw material prices have surged and exchange rates have risen due to international conflicts and inflation, intensifying cost burdens. Especially after the second quarter of this year, the company’s manufacturing costs have increased further due to price hikes from domestic suppliers. A Nongshim official stated, “We have endured cost pressures by internally pursuing cost reduction and management efficiency, considering the impact of ramen and snack prices on consumer inflation, but price adjustments became urgent as we recorded losses domestically in the second quarter. Particularly, due to supplier price increases, raising ramen and snack prices became critical, but we postponed it until after Chuseok to stabilize consumer grocery prices.”

Moreover, recent poor performance appears to have influenced the decision to raise prices. Nongshim’s consolidated operating profit for the second quarter this year dropped 75% compared to the same period last year, down to 4.3 billion won. On a separate financial statement basis (excluding overseas subsidiaries), the company posted an operating loss of 3 billion won domestically, marking the first domestic operating loss in 24 years since the second quarter of 1998.

With Nongshim, the number one ramen company, moving to increase prices, it is expected that other ramen companies facing similar situations, such as Ottogi, Samyang Foods, and Paldo, will follow suit with price hikes. Ottogi raised ramen prices by an average of 11.9% last year for the first time in about 13 years, while Samyang Foods and Paldo increased prices by averages of 6.9% and 7.8%, respectively.

Ottogi stated that no decision has been made yet. An Ottogi official explained, “All ramen companies are under similar pressure from raw material price increases, so it is indeed a difficult situation, but since we raised prices last year for the first time in 13 years, we are currently monitoring the situation.”

Samyang Foods said it is not considering a price increase. A Samyang Foods representative said, “All companies are facing difficulties in the domestic market, but since about 70% of Samyang’s sales come from overseas markets, exports help offset domestic business challenges to some extent, so we plan to observe the situation a bit longer.”

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