Food Industry's '3 Trillion Club' Doubles Year-on-Year... Entry of Nongshim, Lotte Confectionery, SPC Samlip, and Others

Food Industry's '3 Trillion Club' Expected to Expand to 8 Companies
Nongshim, Lotte Confectionery, SPC Samlip, etc... Ottogi Also Expected
Base Effect of Price Increases... Calls for Profitability Improvement

Food companies that joined the so-called '3 Trillion Won Club' by surpassing annual sales of 3 trillion won last year are expected to double compared to the previous year. This is also analyzed as a result of strong performance overseas and the effect of price increases that continued last year. On the other hand, compared to external growth, there are many evaluations that profitability is somewhat disappointing.

According to the industry on the 16th, the number of food companies with annual sales of over 3 trillion won last year is expected to double compared to the previous year. Among the companies that announced their performance, Nongshim, Lotte Confectionery, and SPC Samlip exceeded 3 trillion won in annual sales, and the industry expects Ottogi, which is scheduled to announce its performance next month, to exceed 3 trillion won for the first time. Previously, there were CJ CheilJedang, Dongwon F&B, Daesang, and Hyundai Green Food.

Nongshim surpassed 3 trillion won in sales for the first time in history last year. Nongshim's consolidated sales last year were 3.1291 trillion won, an increase of 17.5% compared to the previous year. Operating profit was 112.2 billion won, up 5.7% from the same period last year, and net profit was 116 billion won, up 16.5%. Despite cost increases such as raw material price hikes, Nongshim attributes the strong overseas business sales to this success. Thanks to the operation of the second factory in the United States last year, sales in the North American region also reached an all-time high. Domestically, the effects of product price increases made last year seem to be reflected in the results from the fourth quarter of this year. Nongshim raised snack prices in March last year and then raised prices for snacks and ramen in September, implementing two price increases in one year.

Lotte Confectionery recorded sales exceeding 4 trillion won after merging with Lotte Food in July last year. Before the merger, the combined sales of Lotte Confectionery and Lotte Food last year increased by 11.1% compared to the previous year, reaching 4.0745 trillion won. In the confectionery business, despite the rising trend in raw material costs, they defended profitability by enhancing the competitiveness of core products, and the food business also saw sales increase due to maintained price hikes and the effects of reopening. Overseas, sales growth was achieved mainly through key overseas subsidiaries in India, Kazakhstan, and Russia. Lotte Confectionery plans to increase sales by 4-6% this year compared to last year through maximizing profitability in core domestic businesses and actively exploring overseas markets, leveraging full merger synergies.

SPC Samlip also saw consolidated sales increase by 12.5% to 3.3145 trillion won last year. Operating profit rose 35.3% to 89.5 billion won, and net profit increased 31.6% to 53.2 billion won. It is analyzed that the improvement in profitability of the rest area business and the profitability of distribution and logistics sectors led to the sales increase. In particular, the return of the Pok?mon Bread series, launched in February last year, gained great popularity and appears to have driven sales growth.

Ottogi has not yet announced its performance, but it is highly likely that sales exceeded 3 trillion won last year due to factors such as the base effect of price increases.

Companies that were already part of the 3 Trillion Won Club also posted strong results. CJ CheilJedang's consolidated sales last year increased 14.4% to 30.0795 trillion won. Operating profit rose 9.2% year-on-year to 1.6647 trillion won. Among these, food business sales exceeded 10 trillion won for the first time, reaching 11.1042 trillion won. In particular, the proportion of overseas food sales rose to an all-time high of 47%, driving performance.

Dongwon F&B also surpassed 4 trillion won in annual sales for the first time in history, with sales increasing 15.3% to 4.0236 trillion won. Daesang's sales also rose 17.7% year-on-year to 4.0854 trillion won. Sales exceeded 4 trillion won for the first time on a consolidated basis for Daesang Corporation. Hyundai Green Food's sales also jumped 12.5% to 3.9232 trillion won, approaching 4 trillion won. Operating profit increased 17.2% to 68.7 billion won.

All companies in the 3 Trillion Won Club saw sales increase compared to the previous year, but some reported a decrease in operating profit, raising the need for profitability improvement. Lotte Confectionery's operating profit last year was 135.3 billion won, down 6.3% from the previous year, and Daesang also surpassed 4 trillion won in annual sales but saw operating profit decrease 9.2% to 139.2 billion won. Dongwon F&B's operating profit also fell 1.3% year-on-year to 128.7 billion won.

An industry official said, "The increase in companies surpassing 3 trillion won in annual sales is analyzed to be mainly due to the effect of price increases that continued throughout last year," adding, "On the other hand, although price increases were implemented, profitability often fell short of expectations, so each company will urgently need to consider ways to overcome this."

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