Due to High Inflation, Home-Cooked Meals and School Meals Preferred Over Dining Out... Dongwon F&B's Operating Profit Up 11.2% in First Half

Operating profit increased by about 8 billion KRW to 78.8 billion KRW compared to the same period last year
Q2 operating profit also rose by 5.4%
Growth in strategic equipment investment items
Group catering and food material company Dongwon Home Food also lend support

Dongwon F&B, a food business affiliate of Dongwon Group, continued its performance growth trend in the first half of this year by benefiting from increased sales of strategically invested items such as instant rice and the windfall effect of high inflation.

Dongwon F&B announced on the 1st that its consolidated operating profit for the first half of this year was tentatively estimated at 78.8 billion KRW, an increase of 11.2% compared to the same period last year. During the same period, sales rose 2.2% to 2.1806 trillion KRW, and net profit increased 35.9% to 63.3 billion KRW. Among these, consolidated operating profit for the second quarter (April to June) was 28.9 billion KRW, up 5.4% from the same period last year, and sales amounted to 1.0615 trillion KRW, up 0.9%.

Dongwon Group Headquarters
Photo by Dongwon Group

Typically, the second quarter is considered an off-season for the food industry as outdoor activities increase in spring and holidays such as Children's Day in May, the month of family, are concentrated, leading consumers to prefer dining out over home-cooked meals. This year, however, ongoing price increases have led consumers to seek processed foods more, resulting in a slight performance increase for Dongwon F&B.

The company explained that strategically invested items such as instant rice, tuna sauce, and pet food, which underwent facility investments, recorded stable growth and delivered strong results. Additionally, new dairy products such as functional milk and natural cheese, as well as zero-calorie beverages, also showed growth trends.

Dongwon Home Food, a B2B (business-to-business) subsidiary responsible for group catering and food material supply, also continued its high growth as the number of users of company cafeterias and group meals increased due to high inflation and a downturn in the dining-out market, the company added. Furthermore, expanding its business scope from the B2B seasoning food market to B2C (business-to-consumer) through the low-sugar sauce specialty brand 'Vivid Kitchen' was also evaluated as a factor contributing to Dongwon Home Food’s strong performance.

A Dongwon F&B official stated, "We will focus on developing large-scale products and brands while accelerating overseas market penetration by discovering new K-foods." Last month, they launched 'Dongwon Bulchamchi,' with a Scoville heat unit of approximately 3,886 SHU, and announced plans to actively export it to overseas markets such as the United States, Japan, and Southeast Asia. Dongwon Bulchamchi is a product with more than twice the spiciness of the existing Gochu Chamchi (1,935 SHU), developed based on the fact that spicy K-food products are gaining great popularity not only domestically but also overseas, especially among the MZ generation (Millennials + Generation Z).