Food Firms Shrink in Q2 Once Big Exporters Removed; Cost Pressures May Push Prices Up
Creatrip Team
a month ago
South Korea’s major food companies posted weak second-quarter results once three export-focused firms (Nongshim, Orion, Samyang Foods) are excluded. Among the remaining seven firms, sales fell about 0.5% year-on-year and operating profit dropped 8.5%. Companies with heavy domestic exposure like CJ CheilJedang and Ottogi saw profit declines, while exporters benefited from overseas demand for products such as spicy instant noodles (buldak-bokkeum-myeon). The industry faces mounting cost pressures from packaging, raw materials (wheat, sugar, palm oil, cocoa) and a stronger won-dollar exchange rate. Packaging accounts for a sizable share of costs—around 10–15% for ramen and roughly 30% for beverages—so rising input costs and currency shifts could force more price hikes in the second half. Firms say high-cost inventories secured in the first half will further squeeze margins, leaving them to weigh passing increases to consumers against worsening profitability.
