Food Ingredient Industry Shifts from School Meals to Liquid and Convenience Foods

Distribution Industry Seeking New Paths with B2C
Hyundai Green Food Focuses on Care Food, Ourhome Concentrates on HMR

[Asia Economy Reporter Eunmo Koo] Large catering and food distribution companies, which were hit hard by the sharp decline in demand for group meals due to COVID-19, are improving profitability by expanding into business-to-consumer (B2C) sectors such as care food and home meal replacement (HMR).

According to industry sources on the 28th, Hyundai Green Food has launched a care food specialized brand called ‘Greeting’ and is actively engaged in the B2C business. Care food refers to convenient meals designed for people who need customized food for health reasons, such as patients and the elderly.

A Hyundai Green Food official said, "Care food is showing a 20% growth rate month-over-month," adding, "As interest in health increases, we plan to continuously expand the business."

Ourhome is also focusing on the rapidly growing demand for home dining and is intensifying its HMR business. Ourhome Mall’s sales last year surged 189% compared to the previous year, and the number of new members nearly tripled. This year, the company plans to steadily increase demand through the expansion of Ourhome Mall’s subscription delivery service and aims to achieve sales of 2 trillion won.

Shinsegae Food is actively expanding its B2C business by focusing on the franchise business of the hamburger brand ‘No Brand Burger.’ Currently, No Brand Burger has about 170 stores, and with franchise recruitment proceeding smoothly, more than 10 new stores are expected to open each month.

CJ Freshway plans to develop its related businesses as new growth engines, as sales of its kid- and senior-specialized brands ‘Ainuri’ and ‘Healthy Nuri’ increased by 110% and 82%, respectively, last year.

A CJ Freshway official stated, "Although it is not a direct B2C business, since these products appeal to consumers, we plan to use them as part of a brand power enhancement strategy."

Meanwhile, according to financial information company FnGuide, the performance of the food ingredient industry last year is expected to be somewhat mixed. Shinsegae Food is predicted to show a recovery with operating profit of 26.9 billion won, a 247.1% increase from 2020, while CJ Freshway and Ourhome are expected to turn profitable with operating profits of 57.8 billion won and 25 billion won, respectively. On the other hand, Hyundai Green Food is expected to achieve external growth through menu price increases but is estimated to see a 9.9% decrease in operating profit to 70.8 billion won due to reduced meal counts caused by the spread of remote work.