South Korean food brands are flourishing in the U.S., following impressive financial results for the first half of the year.
Domestically, many of these companies have grappled with stagnant demand and governmental pressure to reduce prices. Their saving grace, it seems, lies in their robust overseas operations, especially in the U.S.
Several factors have fueled this growth, including competitive pricing amidst rising inflation, extended sales networks, increased imports from Korea, and brand visibility courtesy of the Korean Wave.
Top performers this year include industry leaders like Nongshim, CJ CheilJedang, Pulmuone, and Samyang.
Ramen giants Nongshim and Samyang have particularly thrived, benefiting from the mounting popularity of K-noodles. Nongshim witnessed a 10.8% revenue spike, with its U.S. subsidiary playing a pivotal role, contributing 30% to its overall operating profit. Nongshim attributes this growth to the efficient functioning of its second production facility.
Samyang Foods recorded its best-ever export performance, with a 3.6% rise in overseas sales. The brand’s Buldak and the stabilization of its U.S. operations from last year played a considerable part.
Following its acquisition of U.S. frozen food brand Schwan’s in 2019, CJ CheilJedang is reaping the synergy of blending its top-tier R&D with Schwan’s robust sales strategy. With dumplings being its primary North American product, sales surged by 20% in Q2, claiming nearly half the market share. The recent expansion of the Schwan’s Pizza factory in Kansas further indicates its growth trajectory.
Pulmuone reported a 9.5% growth in Q2 revenue and a 33% rise in operating income. Its U.S. subsidiary, Pulmuone USA, experienced a 21.8% revenue boost compared to last year. Notably, meal kits, frozen fried rice, and tofu emerged as significant sales drivers.
Suk W. Kim, Head of Marketing at Pulmuone Foods USA, Inc., revealed that the company plans to produce noodle products in the U.S. starting from the end of September, promising fresher products with longer shelf lives. “We anticipate growth between 16 to 20 percent in the latter half of the year,” Kim added.
An industry expert commented on the trend: “Realizing the saturation of the domestic market, Korean food companies are shifting focus to the vast U.S. consumer market. We’re likely to witness increased investments in U.S. operations and a broader range of export products.”
BY EUNYOUNG LEE [lee.eunyoung6@koreadaily.com]
