South Korea's largest food company CJ CheilJedang has declared a high-intensity overhaul. It is an exceptional step after its operating profit plunged more than 20 percent last year. The key phrase is "expanding K-food into new territories".

CJ CheilJedang CEO Yoon Seok-hwan (윤석환) told all employees on Feb. 10, "We will focus our capabilities where we can win." He presented an overhaul plan centred on optimising its business structure, fundamentally improving its financial structure and rebuilding organisational culture.

Yoon, in particular, said the company would actively invest in global strategic product (GSP) businesses such as dumplings, processed rice, kimchi, seaweed and noodles to expand K-food into new overseas territories as part of business structure optimisation. It aims to focus on fast-growing overseas businesses rather than a sluggish domestic market.

Last year, CJ CheilJedang's overseas food sales rose to a record 5.9247 trillion won, exceeding domestic sales of 5.5974 trillion won.

CJ CheilJedang's total overseas sales climbed 43.5 percent in five years to 5.9247 trillion won last year from 4.1297 trillion won in 2020. Overseas food sales in the fourth quarter of last year were 1.6124 trillion won, the largest quarterly figure. Overseas food sales have exceeded 5 trillion won since 2022, when they reached 5.1811 trillion won.

The overseas share of total food sales is also steadily rising. Overseas food sales rose to 51 percent last year from 46 percent in 2020, passing the halfway mark for the first time on an annual basis.

By region, dependence on the United States, which has led overseas growth, is overwhelming. CJ CheilJedang's food business posted U.S. sales of 4.9136 trillion won last year, up 47.6 percent from 2020. The United States accounted for 82.9 percent of total overseas food sales.

CJ CheilJedang's new K-food territories refer to Europe, Oceania and Japan, excluding the United States where products such as dumplings are already established. The company is investing overseas by building local production bases such as factories in Hungary and Japan.

In Japan, where sales totalled 334.5 billion won last year, the company plans to strengthen production and supply systems centred on its Chiba plant to speed up market responses. China sales totalled 185.0 billion won over the same period. The company said sales fell after it sold Jisangjwi, a subsidiary that made Chinese food, in July 2023, and this is read as the result of winding down the Chinese food business as it shifts the focus of overseas expansion to K-food.

What stands out is growth in other regions. Sales in other regions rose to 491.6 billion won last year, up 87.2 percent from 262.6 billion won in 2020. CJ CheilJedang does not separately tally and disclose sales for regions such as Europe and Oceania, but growth in other regions shows the flow of expanding into new territories.

CJ CheilJedang plans to establish itself in Europe with its flagship product, dumplings. Plant-based products such as Bibigo japchae dumplings that reflect European consumer preferences are expected to play a leading role. The company plans to build a Bibigo-centred lineup in Budapest, Hungary, which is due to be completed in the second half of this year, and it expects results in Europe to become visible along with expanded production capacity.

Oceania, including Australia, is seen as the region with the second-highest purchasing power after the United States. The share of the Asian population in the region is also high. CJ CheilJedang is expanding distribution channels by placing Bibigo dumplings in Australia's top four big-box retailers, Woolworths, Coles and IGA.

A CJ CheilJedang official said, "For the domestic food business, overall performance is not good as the downturn in the domestic economy continues." The official added, "We are expecting results in Japan, where we have expanded production capacity with the Chiba plant, and in the European market we entered in 2023."