No Impact from Price Reduction... K-Ramen Remains Strong in Q3

Three Major Ramen Companies Forecast Double-Digit Growth in Q3 Sales and Operating Profit
Minimal Impact from Price Reductions on Some Items in July

The upward trend in the ramen industry is expected to continue into the third quarter. Although concerns about performance arose as the ramen industry lowered prices on some items at the start of the second half in response to government pressure, strong sales of new products and exports are expected to sustain good results.

According to financial information company FnGuide on the 30th, Nongshim's operating profit for the third quarter of this year is expected to reach 49.2 billion KRW, an increase of 80.3% compared to the same period last year. Sales during the same period are also projected to rise 7.6% to 874.4 billion KRW.

Ottogi and Samyang Foods are also expected to see significant increases in both sales and operating profit. Ottogi's operating profit is forecasted to increase by 57.6% year-on-year to 69.7 billion KRW, with sales rising 10.5% to 908 billion KRW. Samyang Foods is expected to see an 83.4% increase in operating profit to 35.5 billion KRW and a 34.1% growth in sales to 283.6 billion KRW.

Earlier, all three major ramen companies lowered prices at the start of the third quarter in response to government demands, raising concerns about their performance, but it appears that there will be little actual impact. In June, the government targeted ramen to curb inflation as consumers' grocery burdens increased due to high prices, and the ramen industry conceded by lowering prices on some items starting in July. Nongshim reduced the ex-factory prices of Shin Ramyun and Saewookkang by 4.5% and 6.9%, respectively; Ottogi lowered prices on 15 ramen products by an average of 5%; and Samyang Foods cut prices on 12 ramen products by 4.7%.

While all three companies are expected to perform well, the price reduction impact was minimal, and the stabilization of raw material input costs such as flour is interpreted as having helped improve performance. During the price reduction discussions, the government pressured that ramen prices could be lowered since international wheat prices had fallen, but ramen manufacturers countered that wheat prices had not dropped, so they could not immediately reduce prices. Ultimately, the reduction rate was halved compared to last year's price increase, and some core products were excluded from the price reduction items, leading to criticism that it was merely a token gesture.

Looking at each company, Nongshim's 'Meoktaekkang' and 'Shin Ramyun The Red,' launched in June and August respectively, are expected to lead performance growth with strong market responses. Meoktaekkang experienced a shortage from the initial launch and surpassed 6 million units sold, while Shin Ramyun The Red also sold all 5 million units of its initial batch amid the spicy ramen craze. Nongshim is reportedly considering officially launching Shin Ramyun The Red.

Sim Eun-joo, a researcher at Hana Securities, explained, "Meaningful profit improvement is expected due to strong sales of new products and easing costs such as palm oil. Considering the timing of last year's ramen price increase, the effect of the price hike is expected to continue through the third quarter, with the new product Shin Ramyun The Red showing strong sales, and Meoktaekkang expanding production from September, estimated to contribute about 2 billion KRW in monthly sales."

Nongshim 'Shin Ramyun The Red'

Samyang Foods is expected to deliver good results both in exports and domestic sales. Ahead of China's Singles' Day on November 11, exports of 'Buldak Bokkeum Myun' to China are expected to have increased significantly in September, and strong sales have been recorded in Southeast Asian markets including the U.S., Thailand, Malaysia, and Vietnam. Domestically, sales centered on Buldak Bokkeum Myun and Samyang Ramen are also expected to remain strong, with market share improving.

Ottogi is also expected to record double-digit growth in both sales and operating profit as key categories such as ramen, seasoning products, and sauces maintain stable sales volumes. Ottogi's 'Mayeo Ramen,' launched in August, has sold a total of 6 million units so far, with 5 million bagged noodles and 1 million cup noodles sold.

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