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By Kwak Yeon-soo
Nongshim, CJ CheilJedang, Daesang and other food companies are rushing to expand their presence in the United States by building plants or acquiring American firms, according to industry officials Thursday.
Korean food and beverage markers have until recently focused more on China and Japan, but their exports to the Asian nations have slowed down in recent years, prompting them to explore business opportunities elsewhere, the officials said.
The companies are employing localization strategies to enhance customer satisfaction in the U.S.
They expect Korean food can become more mainstream in the U.S., as the demand for Korean products is increasing among health-conscious consumers.
The U.S. is also the third-largest market for Korean processed food products, including instant noodles, dumplings and kimchi.
Nongshim, Korea's top instant noodles maker, announced a plan recently to spend $200 million in constructing a new factory in Corona, California, to meet growing demand in the U.S.
The company's second factory in the U.S. is expected to begin operations in 2021.
"We needed an additional factory because the production output at the existing plant was oversaturated," a Nongshim official said.
"The new plant will produce both fried and raw noodles, given that a growing number of U.S. consumers prefer raw noodles due to health concerns."
After recording $156 million in sales in the U.S. in 2015, Nongshim has posted double-digit growth to reach $225 million last year.
CJ CheilJedang, the nation's leading food company, has been quick in setting its sights on the U.S. market. It currently has 22 production plants in the U.S., including ones acquired through M&As.
The food giant bought U.S. frozen foods firm Schwan's last November, following its acquisition of Ohio-based Kahiki Foods, a supplier of frozen Asian meals, in August.
The acquisition illustrates CJ's push into the U.S. to become one of the most successful Asian ready-made meal brands.
"We're betting big on the U.S. because it's the mainstream of the world's food market," a CJ CheilJedang official said.
Daesang, a food manufacturer best known for running 31-year-old kimchi brand Jonggajip, is preparing to build a factory in the U.S.
It currently holds a market share of about 60 percent in the mass-produced kimchi market in the U.S.
"We are currently reviewing plans to build a kimchi factory, buoyed by the increasing demand for kimchi in the U.S.," a Daesang official said. "Compared with five or six years ago, when 90 percent of kimchi consumers were Korean American, non-Koreans account for about 30 to 40 percent."
According to data compiled by the Ministry of Agriculture, Food and Rural Affairs, kimchi exports to the U.S. recorded $9 million in 2018, up 24 percent from a year earlier.
