"Dining Out Slump"... CJ Freshway Reports Operating Profit of 28.2 Billion KRW in Q3

Profit Decline Amid High Inflation Despite Growth in Food Ingredient Distribution

CJ Freshway recorded poor performance in the third quarter due to the prolonged high inflation and the resulting downturn in the dining-out market.

CJ Freshway announced on the 8th that its operating profit for the third quarter was 28.2 billion KRW, a 6.6% decrease compared to the same period last year. During the same period, sales increased by 2.8% from a year earlier to 831.9 billion KRW.

CJ Freshway explained, "the distribution of meal ingredients and foodservice businesses achieved quantitative growth, but operating profit slightly decreased due to the prolonged downturn in the dining-out market and high inflation."

By segment, sales in the meal ingredient distribution business reached 610.9 billion KRW. Sales of meal ingredients covering all life cycles including infants, adolescents, and the elderly continued to grow. In the dining-out ingredient sector, inflow from large franchises increased, and monetization of the dining-out solution customer consulting business was achieved. Online channel sales grew significantly compared to the same period last year. The increase in online purchases by meal ingredient distribution customers led to effective expansion of sales channels and exclusive product assortments.

Sales in the foodservice business amounted to 206.8 billion KRW. Sales in the group meal sector showed stable growth across all channels including industrial sites, offices, and hospitals. The kitchenless segment maintained a share of over 10% of total foodservice sales. This is a future-oriented business led by the ready-to-eat takeout corner SNACKPICK. CJ Freshway is focusing on acquiring high-profit clients and is implementing a strategy to diversify service channels and expand customer touchpoints through the kitchenless business.

Manufacturing business sales were 14.2 billion KRW. Centered on its subsidiary Fresh Plus, CJ Freshway manufactures and supplies customized products such as sauces and cooking efficiency ingredients. With the new factory in Eumseong, Chungbuk starting operations this month, the company’s capabilities in sauce manufacturing and distribution are expected to be further strengthened.

Gwak Kyung-min, Chief Financial Officer (CFO) of CJ Freshway, said, “Amid the ongoing challenging management environment including the prolonged downturn in the dining-out market, we will expand customer touchpoints by strengthening O2O and kitchenless capabilities, accelerate targeting of new growth markets, and focus on improving the profit structure.”

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