K-food names make big waves in U.S. retail market
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According to industry sources on Sunday, CJ CheilJedang posted 3.77 trillion won ($2.91 billion) in U.S. sales over the first three quarters of this year, up 20 percent from a year earlier, outpacing its 3.37 trillion won revenue for all of last year. Daesang expects its ‘Chongga’ kimchi sales in the U.S. to set a new record with a 35 percent jump from last year’s sales of $16.17 million.
Nongshim Co. earlier said its North American sales will be the highest ever this year with a 23 percent increase from $486 million last year. Pulmuone Co., which commands 70 percent of the U.S. tofu market, is expected to set revenue record this year as well, with tofu sales up 11 percent from a year ago in the first half of this year.
Korean food companies have been expanding their distribution networks throughout the U.S. by leveraging the momentum of Korean pop culture fame.
Nongshim aggressively targeted major U.S. retailers with its key product Shin Ramyun. In 2017, the instant noodle brand started selling the product in 4,500 Walmart stores in the U.S., and then further to Kroger and Sam’s Club. Compared to the same period last year, Shin Ramyun sales this year at Walmart soared by 42 percent, Kroger increased 31 percent and Sam’s Club jumped 89 percent.
Daesang sells Chongga kimchi at around 5,000 U.S. locations, including Walmart and Costco stores, and its ‘O Food’ gochujang from subsidiary Chung Jung One at 20,000 stores.
K-food names’ rapid expansion in the U.S. through mergers and acquisitions. CJ CheilJedang accelerated its penetration by acquiring Schwan’s, a U.S. food manufacturer with brands such as Tony’s, in early 2019.
The acquisition enabled CJ CheilJedang to include its Bibigo food products in Schwan‘s distribution network, expanding their distribution points by tenfold from 3,000. Overseas sales of CJ CheilJedang’s food accounted for 46 percent of its total this year from 14 percent in 2018.
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