Food Industry Price Increase Domino... Rising Trend Continues in the Second Half Following the First Half

Price Increases Across Snacks, Ramen, and Other Products
Meat and Dairy Prices Expected to Continue Rising

[Asia Economy Reporter Song Seung-yoon] Following the first half of the year, domino price increases continue in the food industry in the second half as well.

According to the industry on the 3rd, Binggrae raised the prices of six snack products by an average of 13.3% starting from the 1st. After the increase, snack products such as Kkotgerang, Yachae Time, Jacky Jacky, and Smoky Bacon Chip will be priced at 1,700 KRW from 1,500 KRW at convenience stores. Prices are expected to rise sequentially in other distribution channels as well.

Samyang Foods also raised the prices of snack products such as Satto Bap, Jjanggu, and Popeye by an average of 15.3% on the same day, citing raw material price increases. Paldo also raised the prices of 12 ramen brands by an average of 9.8% starting that day. In the kimchi industry, Daesang, the number one company in the domestic packaged kimchi market, raised the price of Jongga Jip kimchi by an average of 9.8%.

Earlier, Orion raised the prices of 16 products including pies, snacks, and biscuits by an average of 15.8% from the 15th of last month among its 60 products. By major product, Choco Pie rose 12.4%, and Pokachip, Kkobuk Chip, and Yegam increased by 12.3%, 11.7%, and 25%, respectively. Nongshim also raised the shipment prices of 23 snack products by an average of 5.7%. Ottogi plans to raise ramen prices by an average of 11.0% starting from the 10th of this month.

Due to the prolonged COVID-19 pandemic, rising international grain prices caused by the Russia-Ukraine conflict, and the sharp rise in the won-dollar exchange rate, inflationary pressure shows no sign of easing, leading to expectations that the price hike trend will continue in the second half of the year.

Feed prices are also on the rise, so not only processed foods but also meat and meat products may see price increases. The Korea Rural Economic Institute forecasted that the import unit price index for edible grains in the third quarter will rise to 192.7, an 18.1% increase from the second quarter, and feed grains will cost 191.1, a 20.4% increase. A price increase for raw milk is also scheduled soon, raising the possibility of 'milkflation,' where prices of dairy products such as milk, fresh cream, and ice cream rise.