Samyang Foods Sauce Division Sees 60% Sales Growth in H1
Exports Expected to Surpass $400 Million This Year
Food Industry Targets Global Sauce Market
Fashion Company LF Enters Sector Through M&A
The domestic food industry is turning its attention to the sauce market as the next-generation growth engine. As K-food continues to gain popularity in global markets, exports of Korean sauces have been steadily increasing. The global sauce market is expected to grow to a scale of 100 trillion won within three years, prompting not only food companies but even fashion businesses to enter the market.
According to the electronic disclosure system on August 19, the sales of Samyang Foods' Sauce and Seasoning Materials Division, which is responsible for the company’s sauce business, reached 35.8 billion won in the first half of the year, a 61.5% increase compared to the same period last year. While this accounts for only about 3.3% of total sales, considering that noodles and snacks make up 91% of the company’s sales, it is emerging as a core business that could follow in the footsteps of instant noodles.
Samyang Foods' recent performance is the result of aggressively targeting the global sauce market with its "Buldak Sauce." Last year, Kim Jungsoo, Vice Chairman of Samyang Round Square, announced plans to develop the sauce business as a new cash cow and has since launched aggressive marketing campaigns. In April, the company renewed the design of Buldak Sauce and promoted it at Coachella, a major music festival in the United States. More recently, Samyang Foods signed an official partnership with Panda Express, the largest Asian restaurant brand in the U.S., targeting both B2C (business-to-consumer) and B2B (business-to-business) markets. Vice Chairman Kim’s goal is to grow Buldak Sauce into a "global hot sauce" brand alongside Tabasco and Cholula.
In addition to its existing products such as Buldak Sauce, Samyang Foods has also pursued mergers and acquisitions for the first time in 10 years as a stepping stone to expand its sauce business. The company plans to acquire 100% of the shares in G&F, a domestic sauce and soup company, for 60 billion won. G&F specializes in manufacturing ramen soup bases and powdered sauces, supplying products to competitors such as Nongshim and Ottogi. Last year, G&F posted sales of 41.7 billion won and an operating profit of 3.2 billion won.
It is not only Samyang Foods; the entire food industry is strengthening its sauce business. From internal components like powdered and liquid sauces used in ramen to B2C-exclusive sauces reflecting trends such as low sugar and low calories, the industry is broadly expanding its sauce category in all directions.
Recently, even fashion company LF has entered the market by acquiring a sauce-specialized company, signaling a full-fledged challenge. LF’s affiliate, LF Food, is in the process of acquiring 100% of the shares (80,396 shares) of M G Food Solution, a B2B-focused seasoning and sauce manufacturer, in a deal worth about 50 billion won. Although the sauce distribution business already accounts for a significant portion of LF Food’s operations, this decision aims to create synergy with its existing food manufacturing business. In the first quarter of this year, LF Food recorded sales of 38.4 billion won, with sauce distribution accounting for 10 billion won, or 26.1% of total sales.
Exports of sauces have been growing every year. According to the Korea Customs Service, sauce exports, which were valued at $189.61 million in 2016, more than doubled to $399.76 million last year. In the first half of this year, exports reached $211.89 million, and it is expected that the annual figure will easily surpass $400 million by the end of the year-a record high.
The global sauce market is also rapidly scaling up. According to global market research firm Euromonitor, the overseas sauce market grew from $45 billion in 2019 to $59.7 billion in 2023. By 2028, it is projected to exceed $70 billion (about 101.26 trillion won).
An industry insider explained, "Due to the impact of COVID-19 and high inflation, the preference for convenient home-cooked meals continues, and as more overseas consumers want to experience Korean food, demand for sauces is rising both domestically and internationally. Reflecting consumer preferences, the range of products has recently diversified, and collaborations between companies using sauces are becoming more active, leading many companies to actively enter the sauce market."
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