The Divergent Fates of Buldak and Shin Ramyun... The K-Ramen Syndrome Divided Performance (Comprehensive)

Ramen 3 Companies Q3 Earnings Announcement
Samyang Foods Operating Profit Increases Over 100%
Nongshim and Ottogi Decrease by 30% and 20% Respectively

Amid the ongoing global K-Ramen craze, the third-quarter performance of the three major ramen companies this year showed stark contrasts. Samyang Foods saw its operating profit grow by more than 100% compared to a year ago, fueled by the continued popularity of Buldak Bokkeummyeon, while Nongshim and Ottogi suffered significant blows from sluggish domestic demand despite strong overseas business, with operating profits plunging by 20-30%.

Samyang Round Square held a surprise event delivering 1,000 packs of Carbo Buldak Bokkeummyeon to a girl living in Texas, USA. Photo by Samyang Foods

"Conquering the US and Europe with Buldak" Samyang Foods Q3 Operating Profit Up 101% YoY

Samyang Foods announced on the 14th that its consolidated operating profit for the third quarter reached 87.3 billion KRW, a 101% increase from a year earlier. During the same period, sales rose 31% to 438.9 billion KRW. The operating profit margin stood at 19.9%.

Thanks to the global Buldak Bokkeummyeon phenomenon, Samyang Foods demonstrated explosive growth in the third quarter as well. Overseas sales increased by 43% compared to Q3 last year, reaching 342.8 billion KRW, accounting for 78% of total sales. A Samyang Foods representative explained, "Our localized strategies centered on overseas sales subsidiaries and the growing popularity of the Buldak brand in the US and Europe have translated into sales, achieving the highest quarterly performance."

As a result, Samyang Foods' cumulative sales from Q1 to Q3 rose 44% year-on-year to 1.2491 trillion KRW, surpassing last year's annual sales of 1.1929 trillion KRW. Cumulative operating profit increased by 131% to 256.9 billion KRW. The cumulative operating profit had already exceeded the previous year's full-year results in the first half of this year.

A Samyang Foods official stated, "Not only in Asia but also in the US and Europe, the Buldak brand's competitiveness is being recognized, securing a unique position in the global market. With the recently established sales subsidiaries in Indonesia and Europe settling into their local markets and the completion of the Miryang Plant 2 next year, we expect to accelerate our global market expansion."

Consumers in New York, USA, are eating Shin Ramyun in front of a media wall themed around the Han River. Provided by Nongshim

Nongshim and Ottogi, Unable to Overcome Domestic Slump Despite Global Success... Operating Profit Plummets

On the other hand, Nongshim, traditionally considered a strong player in K-Ramen, saw its operating profit sharply decline as the severe domestic slump offset the gains from overseas business. Nongshim's consolidated operating profit for Q3 was 37.6 billion KRW, down 32.5% from a year ago. Sales decreased by 0.6% to 850.4 billion KRW. The operating profit margin was 4.4%.

First, the company succeeded in expanding its overseas business scale. Overseas sales showed steady growth in exports from Korea (+33.5%), the US (+1.4%), Japan (+20.3%), Australia (+15.4%), and Vietnam (+20.4%). Nongshim explained, "This is attributed to expanding the new brand lineup considering each country's food culture and increasing direct transactions through client restructuring, enabling more aggressive marketing."

However, difficulties were faced in the domestic and Chinese markets. The domestic market shrank due to economic slowdown, with significant sales declines in the snack (-6.6%) and beverage (-13.8%) categories. In response to the domestic market downturn, Nongshim increased promotional expenses, and rising management costs, including export costs such as maritime freight, severely worsened operating profit.

Ottogi faced a similar situation. Ottogi's consolidated operating profit for Q3 was 63.6 billion KRW, down 23.4% compared to the same period last year. Sales decreased by 0.5% to 904.1 billion KRW. An Ottogi representative explained, "Although overseas sales and profits slightly increased, domestic sales growth was minimal, and increased selling expenses to boost sales led to a decline in profits."

Meanwhile, according to the Ministry of Agriculture, Food and Rural Affairs, ramen exports totaled 1.02 billion USD (approximately 1.4 trillion KRW) cumulatively through October this year, marking a 30% increase from a year earlier and setting a record high. Last year's annual ramen export value was 952 million USD, but this year it was surpassed in just 10 months. The ministry forecasts that exports will reach 1.2 billion USD by the end of the year.

Ramen export value was around 210 million USD ten years ago in 2014 but has sharply increased in recent years. Since April, when monthly exports first exceeded 100 million USD, exports have consistently surpassed 100 million USD each month. By country, ramen exports to China from January to October this year reached 210 million USD, up 18.6%, while exports to the US rose 65.0% to 180 million USD.