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Nongshim to spice up European market through local retailers

Nongshim to spice up European market through local retailers

Posted May. 15, 2024 07:48,   

Updated May. 15, 2024 07:48


Nongshim aims to penetrate the European ramen market by expanding its presence in major French retailers. In response to surging overseas demand, the company plans to establish a new export-only factory in Korea and expand its production line to its second U.S. factory.

Nongshim announced on Tuesday its intention to broaden its product range at prominent French retailers such as ‘Leclerc’ and ‘Carrefour’ starting in June. Alongside existing favorites like Shin Ramen, the ramen lineup, including Neoguri and Soon Ramen (vegetarian ramen), will expand to 17 varieties, with four types of snacks, such as shrimp crackers and onion rings, added to the mix.

With the combined market share of the two distribution giants amounting to 40%, Nongshim's distribution network in France stands to significantly strengthen. Plans include setting up an exclusive booth at the 'Korea Expo 2024' and participating in the 'K-Street Festival' to coincide with the Paris Olympics. Additionally, during the Olympics, Nongshim will collaborate with local French distributors to operate pop-up stores within their stores.

To intensify its focus on the European market, Nongshim plans to establish a European sales corporation early next year to expand its presence in western and northern Europe. “We will strengthen our partnership with Carrefour to target not only Spain and Italy but also Belgium, Poland, and Romania,” an official from Nongshim said.

The second factory in the United States, serving as the cornerstone for Nongshim's North American sales, is slated for expansion. Amid the pandemic, the popularity of K Ramen surged in the U.S., prompting Nongshim to establish a second factory in 2022. Over two years, ramen sales in North America skyrocketed by 36%.

Nongshim's strategy includes the expansion and operation of a new container noodle high-speed line starting in October this year, coinciding with the completion of the factory expansion. Container noodles constituted 63% of Nongshim's sales through its American subsidiary last year. Upon completion of the expansion, the company will be equipped to produce noodles in square containers in addition to the existing round containers for large and regular-sized bowl noodles. The annual production capacity of the US corporation is set to increase by approximately 20%, from the current 850 million units to 1.01 billion units.

With overseas sales on the rise, Nongshim anticipates a boost in performance this year. According to financial data from FnGuide, Nongshim's sales in the first quarter are estimated to have reached 903 billion won, reflecting a 5.0% increase compared to the same period last year. Operating profit for the same period is forecasted to rise by 2.6%, reaching 65.4 billion won.

정서영 기자 cero@donga.com