Korean food companies pivot towards Europe with Poland as gateway

South Korea’s major food manufacturers have pivoted toward Europe as they seek to expand overseas markets beyond Asia and North America to ride on Korean cultural ascension and ready for thinning population at home.

Daesang famous for kimchi brand Jongga is mulling a kimchi production facility in Poland, according to a source familiar with the matter in Paris.

“Daesang has recently opened a branch in Poland and is studying options for a kimchi factory there,” said the source. The facility could be a direct production or OEM line or a joint venture with a local food entity, he added.

Daesang opened a branch in Warsaw, Poland, in August and has conducted feasibility reviews on local production. The company built a large-scale kimchi factory in Los Angeles in February to operate manufacturing facilities in 10 countries, including Vietnam, China, and the U.S. It has recently started advertising kimchi on a Times Square billboard in New York.

CJ CheilJedang is also tapping expansion in Europe, with Poland as a gateway. It built a dumpling production facility in Frankfurt, Germany, in 2018. It could add another factory.

“We consider Poland will be a reasonable choice for a production facility given low labor costs and its convenient location to access neighboring nations,” said a company official.

Poland is already home to production facilities of many Korean manufacturers like Samsung Electronics, SK Innovation, Mando, and LG Energy Solution.

Korean food companies believe that operating overseas production facilities are the best way to overcome trade barriers such as food customs regulations and soaring logistic costs. For longer-term, they must ensure wider markets due to thinning population in Korea.

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