Hopes for a Food Service Windfall After Ourhome's Exit... The LG Family Keeps It In-House

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 acquisition of Ourhome by Hanwha Group would reshape the contract foodservice market has proven inaccurate. Instead of opening up the foodservice volume previously handled by Ourhome to large external companies, the LG-affiliated conglomerates are filling the gap by relying on their own in-house foodservice subsidiaries.

According to the foodservice industry on January 11, GS Group, which is related to the broader LG family by marriage, recently changed its headquarters' foodservice provider. At the Grand Seoul headquarters of GS Engineering & Construction in Jongno-gu, Seoul, foodservice had previously been jointly managed by Ourhome and GCS. However, from this year, GCS has taken over sole operation. In other words, the company has excluded external foodservice providers and entrusted the operation to its own subsidiary.

Contract Foodservice Business: Prioritizing Our Own Members Over Outsiders

The situation is similar at LS Group affiliates. The foodservice operation rights for LS Electric’s Cheongju plant, LS Cable’s Gumi and Indong plants, and the Gumi dormitory cafeteria, all previously managed by Ourhome, have been transferred to LIG Home&Meal. LS Group was established by the late Koo Tae-hoe, younger brother of Koo In-hwoi, and the late Koo Pyung-hoe and Koo Doo-hoe, who built the group’s foundation on the wire and electric equipment business. LIG Group was founded by the late Koo Chul-hoe, another younger brother of Koo In-hwoi, focusing on insurance and defense businesses. At the end of last year, the contract foodservice provider for LG Uplus’s Jungang-dong office building in Jung-gu, Busan, was changed from Ourhome to the foreign-owned foodservice company Aramark.

These recent contract foodservice arrangements among LG-affiliated companies share a common feature: after Ourhome’s departure, the foodservice volume has not shifted to large external providers. Instead, so-called “hidden foodservice subsidiaries” within and around the group have stepped in to fill the void.

Although the broader LG family has split into separate groups such as LG, GS, LS, and LIG based on the principle of succession by the eldest son, business transactions and cooperative relationships have continued to some extent. It is believed that this background is not unrelated to the fact that Ourhome was responsible for foodservice at 110 LG-affiliated business sites until its acquisition by Hanwha Group. The late Koo Ja-hak, honorary chairman and founder of Ourhome, was the third son of Koo In-hwoi, the founder of LG Group.

 GCS, LIG Home&Meal... The Foodservice Network of the LG Family

GCS, established in April 2007 as a GS Engineering & Construction affiliate, specializes in comprehensive resort management, including Elysian, and operates institutional cafeterias. Rather than being a dedicated foodservice company, it is structured to provide foodservice alongside facility management (contract management). GS Engineering & Construction owns 100% of its shares. In 2024, GCS’s revenue was 74.6 billion won, a 1% decrease from the previous year’s 75.7 billion won. Operating profit was 2.8 billion won, down 22% from 3.6 billion won the previous year. During this period, related-party transactions show that sales to GS Engineering & Construction amounted to about 47.4 billion won, accounting for 63% of total revenue.

LIG Home&Meal is the foodservice subsidiary of LIG Group, operating both group catering and restaurant/retail businesses. Its foodservice 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 transfer of foodservice volume as an extension of this cooperative relationship. 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 foodservice (F&B) as a core business. In 2024, D&O recorded sales of 222.2 billion won and an operating loss of 67 million won, continuing the deficit from the previous year (operating loss of 1.4 billion won). However, financial income from dividends and interest offset these losses, resulting in a net profit of 53.8 billion won.

An industry insider commented, “On the surface, it appeared that Ourhome’s exit would release foodservice volume into the market, but in reality, much of it has simply shifted to internal group organizations. This reaffirms that the barriers to entry for large foodservice companies remain high.”