Ramen 2,000 Won, Saewookkang 1,500 Won... Food Industry Targeting Premium Market

Bibigo Oxtail Soup Launched at 8,180 Won
Haetbansotban Popular Despite Triple Price
"Shift from Price to Healthy Ingredients"
Consumer Purchase Criteria Are Changing

[Asia Economy Reporter Seungjin Lee] High-priced premium new products, priced 3 to 4 times higher than existing products such as ramen and instant rice, are flooding the market. This is interpreted as the food industry targeting the expansion of the premium market because there is a limit to raising the prices of existing products amid soaring grocery prices.

8,000 Won per Bowl, Worth the Price

On the 19th, CJ CheilJedang launched premium new products of Bibigo soup dishes, ‘Bibigo Dogani Gomtang’ and ‘Bibigo Kkori Gomtang.’ The prices of the two products are 8,180 won each, about 3.8 times more expensive than ‘Bibigo Hanwoo Sagol Gomtang’ and about 1.4 times more expensive than ‘Bibigo Jinguk Seolleongtang.’ The ingredients and taste are differentiated to justify the higher price.

Consumers are also choosing premium products first for meals at home. The sales proportion of CJ CheilJedang’s premium products such as Chadol Doenjang Jjigae, Galbitang, and Chadol Yukgaejang exceeded 30% of the total Bibigo soup dishes in September this year. Compared to 2019, it has more than doubled in two years.

The Hetbahn market is similar. While existing Hetbahn remained as a bowl of rice to quickly satisfy a meal, CJ CheilJedang’s ‘Hetbahn Sotban’ is regarded as a dish. Although it is sold at about three times the price of existing products, it is popular enough to have sold 1.8 million units within three months of its launch.

Premiumization Trend in Snacks and Beer

Nongshim launched a premium version of Saewookkang called ‘Saewookkang Black.’ Priced at around 1,500 won, 50% more expensive than the existing Saewookkang (1,000 won), it contains twice the shrimp content of the original product and is flavored with truffle oil. Jeju Beer also introduced a 330ml bottle of 10,000 won beer called ‘Coffee Golden Ale’ earlier this month through collaboration with the American coffee brand Blue Bottle.

Premium products are also being released one after another in the ramen market, where consumer price resistance is particularly high. Harim, which officially entered the ramen market with ‘The Misik Artisan Ramen (photo),’ has opened the era of 2,000 won per ramen pack. Harim judged that although the ramen market is active with a scale of about 2.5 trillion won, the premium market is not properly established. They set a goal to achieve ramen sales of 70 billion won next year by targeting demand for premium products.

"Even if expensive, if it tastes good and is healthy"

Ten years ago, Nongshim launched Shin Ramyun Black priced at 1,600 won but temporarily suspended sales due to criticism that it was ‘excessively expensive.’ Currently, Shin Ramyun Black has settled as one of Nongshim’s representative products. A food industry official said, "In the past, price was the biggest factor influencing consumers’ purchasing decisions, but now taste and healthy ingredients are considered more important."

Premium products are also expected to impact the food industry’s performance improvement. Major food items such as ramen and instant rice are items where price increases are difficult due to consumer backlash despite rising prices.

A food industry official explained, "To compensate for the declining profit margins of existing products due to rising prices, the food industry will continue to launch premium products that can raise the initial shipment price. The current situation, where the proportion of home dining has increased due to COVID-19, is also a good time to introduce premium products to consumers."