Movement to Replace Ourhome's Food Service with the LG Family of Companies

The LG Family After Ourhome's Exit
Boosting "Hidden" Food Service Subsidiaries
Reshaping the Network with GCS and LIG Home & Meal

The prediction that the entry of Ourhome into Hanwha Group would reshape the contract food service market has proven inaccurate. Instead of opening up the volume of meals previously handled by Ourhome for the broader LG family to large external companies, LG affiliates are filling the gap themselves by utilizing their own food service subsidiaries.

According to the food service industry on January 11, GS Group, which is related to the LG family by marriage, recently changed its headquarters' food service provider. Previously, at the GS Engineering & Construction headquarters in Gran Seoul, Jongno-gu, Seoul, Ourhome and GCS had jointly managed the contract food service. However, starting this year, the operation has shifted to GCS exclusively. External food service companies have been excluded, and the operation has been entrusted to the subsidiary.

Contract Food Service Business: Prioritizing Our Own Members

The atmosphere is similar at LS Group's business sites. The cafeteria operation rights at LS Electric's Cheongju plant, LS Cable's Gumi and Indong plants, and the Gumi dormitory, all previously managed by Ourhome, have been transferred to LIG Home & Meal. LS Group was established around the late Koo Tae-hoe, the younger brother of the late Koo In-hoe, with the late Koo Pyung-hoe and the late Koo Doo-hoe, who laid the foundation for the group based on the wire and power equipment business. LIG Group was founded by the late Koo Chul-hoe, the younger brother of founder Koo In-hoe, focusing on insurance and defense industries. At the end of last year, the contract food service provider for LG Uplus's Jungang-dong office building in Jung-gu, Busan, was changed from Ourhome to the foreign food service company Aramark.

Examining recent contract food service deals among LG affiliates reveals a common trend. Rather than the volume previously handled by Ourhome shifting to large external food service companies, so-called "hidden food service subsidiaries" already existing within or around the group are filling the vacancies.

The LG family, following the principle of succession by the eldest son, split into affiliates such as LG, GS, LS, and LIG. Nevertheless, business transactions and cooperative relationships have continued to some extent. It is believed that the fact that Ourhome was responsible for food service at 110 LG family business sites prior to its acquisition by Hanwha Group is not unrelated to this background. The late honorary chairman Koo Ja-hak, founder of Ourhome, was the third son of Koo In-hoe, the founder of LG Group.

 GCS, LIG Home & Meal... The LG Family Food Service Network

GCS, established in April 2007 as a GS Engineering & Construction affiliate, focuses on comprehensive resort management such as Elysian and operating institutional cafeterias. Rather than being a specialized food service company, it is structured to provide food service alongside facility management (contract management). GS Engineering & Construction holds 100% of the shares. In 2024, sales were 74.6 billion won, a 1% decrease from the previous year (75.7 billion won). Operating profit was 2.8 billion won, down 22% from the previous year (3.6 billion won). During this period, related-party transactions reveal that sales to GS Engineering & Construction amounted to approximately 47.4 billion won, accounting for 63% of total sales.

LIG Home & Meal is the food service subsidiary of LIG Group, operating both group catering and restaurant/retail businesses. Its food service business focuses on offices, production facilities, training centers, and public institutions. It also engages in food material distribution, home meal replacement (HMR), and F&B businesses such as Hanwadam and Woodaum.

In March last year, LS Group and LIG Group signed a memorandum of understanding (MOU) for strategic partnership and comprehensive cooperation. Many in the industry interpret the recent shift in food service volume as an extension of this cooperative stance. As of the end of 2024, LIG Home & Meal had assets of approximately 16.7 billion won and liabilities of 11.8 billion won, resulting in a relatively high debt ratio.

D&O, established in January 2002 through a spin-off from LG Distribution, is a wholly owned LG affiliate that operates leasing, golf courses, and resorts. It runs large-scale complexes such as Konjiam Resort, Konjiam Golf Club, LG Training Center, and Seoul Botanic Park Hotel, and has expanded its food and beverage (F&B) business as a core operation. In 2024, sales amounted to 222.2 billion won, and it recorded an operating loss of 67 million won, continuing its deficit from the previous year (operating loss of 1.4 billion won). However, financial income such as dividends and interest offset this, resulting in a net profit of 53.8 billion won for the year.

An industry insider commented, "On the surface, it appeared that Ourhome's exit would release volume into the market, but in reality, much of it was absorbed by internal group organizations. For large food service companies, this reaffirms that entry barriers remain high."