Instant noodle makers fill up on surging U.S. sales

Industry

Instant noodle makers fill up on surging U.S. sales

Published: 16 May. 2023, 19:33

Identical twin boys enjoying Nongshim's Shin Ramyun noodles in Las Vegas. [NONGSHIM]

The popularity of instant noodles in the U.S. drove an earning surprise in the first quarter this year in major food companies, including Nongshim.

Nongshim’s U.S. sales jumped 40.1 percent on year to 164.7 billion won ($123 million). The subsidiary’s operating profit skyrocketed 604.7 percent to 18 billion won.

The U.S. subsidiary operates two plants in the U.S.

Nongshim's operating profit in the first quarter jumped 29.4 billion won on year, with the U.S. subsidiary generating more than half of it with a 15.4 billion won increase.

Business in the U.S. is going so well that in merely a year since the second plant in California began operation, Nongshim is considering building another factory to further accelerate growth.

“The profit increase is due to a surge in supply as the second plant in the U.S. began operations,” a Nongshim spokesperson said. “Since the Covid-19 pandemic, instant noodles such as Shin Ramyun became popular with Americans.”

Nongshim's Shin Ramyun and Shin Ramyun Black are two bestsellers in the U.S., according to the company. In box chains Sams' Club and Costco, first quarter sales of Nongshim products each grew 117 percent and 57 percent on year. Shin Ramyun products entered all of the Sams' Club branches in the U.S. by the first quarter this year.

Employees check Nongshim's Shin Ramyun products at the U.S. plant in California. [NONGSHIM]

Overall, Nongshim’s net profit soared 64 percent on year to 54 billion won in the first quarter this year, while sales jumped 16.9 percent to 860.4 billion won. Operating profit jumped 85.8 percent to 63.8 billion won.

Samyang Foods' overseas sales showed double-digit growth, surging 18.9 percent to 157.9 billion won thanks to the popularity of its Buldak Ramen franchise.

Sales in Japan grew 81 percent to 640 million yen ($4.7 million), the company reported. In the U.S., sales jumped 91 percent to $18.2 million. U.S. sales are expected to continue to increase as Samyang Foods products will enter box chain Costco soon.

Due to robust growth from overseas, the food company's net profit increased 17 percent to 22.6 billion won, while sales enjoyed a 21.5 percent hike to 245.5 billion won on year.

Operating profit fell 2.6 percent to 23.9 billion won.

“Although first quarter revenue increased compared to the same period the year before, the price of ingredients such as flour and sugar shot upwards, as well as an increase of logistics costs as freight volume increased — which all added to an increase in production cost,” a spokesperson from Samyang Foods said. “We plan to concentrate on cutting down on the cost prices and promote efficiency in business structure to secure profitability."

Ottogi's sales also jumped 15.4 percent to 856.8 billion won riding on global interest over Hallyu. BTS's Jin promotes Ottogi's Jin Ramen.

Ottogi’s net profit fell 32 percent on year to 37.6 billion won, but sales jumped 15.4 percent to 856.8 billion won. Operating profit surged 10.7 percent to 65.4 billion won.

“Sales from our primary products contributed to the increase, as well as price hikes in terms of increases in operating profit,” Ottogi spokesperson said.

Quarterly export sales from instant noodles in total reported $208 million as global interest over Hallyu and Korean food increased, according to the Korea Agro-Fisheries & Food Trade Corporation. It's the highest figure amid first quarter sales.

BY CHOI SUN-EUL, LEE JAE-LIM [lee.jaelim@joongang.co.kr]