[DigitalToday reporter Shin-hye Ahn] hy, formerly Korea Yakult, is seeking to expand in global markets with a joint business model that combines equity, production and intellectual property (IP). It launched a new food and beverage brand, ARIH, through its U.S. joint venture, HYH America, with HYBE. The move is seen as an attempt to expand overseas in a way that differs from simple exports or one-off collaborations.

According to the industry on April 21, hy and Paldo will begin selling ARIH products starting with placement at Walmart in the United States on April 24. ARIH is a brand created as a joint effort with BTS from the brand planning stage.

Behind the attention on ARIH is HYH America, the U.S. joint venture hy, Paldo and HYBE set up last year. It is a joint investment structure centered on hy, with HYBE and Paldo participating.

The structure is seen as an attempt by hy to secure a more stable foundation for overseas business. Unlike typical IP collaborations by food companies that focus on limited-edition packaging, hiring models or promotions, ARIH reflects BTS input from the brand planning stage and also combines equity investment and a joint operating structure.

hy said BTS took part from the planning stage. BTS input was reflected in the brand name, concept, flavor and product direction, and ARIH was designed from the outset around artist collaboration. It is also combined with equity investment and a joint operating structure.

hy has previously introduced products such as the 'Cold Brew by Babinski BTS package' using BTS IP since 2018. But while that product had the nature of marketing through use of IP, ARIH differs in that it seeks to use BTS IP not as a one-off marketing tool but as a long-term business asset.

hy's performance pressure is also cited as a factor behind setting up the joint venture and launching the brand. According to the Financial Supervisory Service's electronic disclosure system, hy posted consolidated revenue of 1.68 trillion won in 2024 and an operating loss of 64.5 billion won. Revenue rose slightly from 1.52 trillion won in 2023, but the operating loss widened to 64.5 billion won from 24.5 billion won. The industry sees limits to growth with an existing business structure centered on the domestic market and views hy as having widened its stride into global markets. It is interpreted in the same context as South Korea's food industry seeking overseas expansion amid sluggish growth in the domestic economy.

It is also notable that the path hy has chosen this time differs from its existing new businesses. After changing its name from Korea Yakult to hy in 2021 with the goal of becoming a comprehensive distribution company, hy has pursued new businesses including the delivery app 'Knock', investment in overseas medical businesses and education companies. By contrast, HYH America and the ARIH launch are drawing attention because they represent global expansion in hy's core food and beverage business.

hy has already attempted to enter overseas markets with some products. A representative case is its fermented milk drink 'Helicobacter Project Will' being placed last year in China and at the U.S. Asian mart chain H Mart. This time, however, the approach differs in that it entered Walmart, a major U.S. distribution channel, at the brand level beyond exporting a single product.

hy expanded distribution by placing ARIH at Walmart, a major U.S. distribution channel. ARIH products are set to begin initial sales this month at Walmart through offline stores and its online mall, and then start sales in South Korea at the end of next month. hy said launching first through a major U.S. distribution channel and then rolling out in South Korea is an unusual case in the food and beverage sector, and expects ARIH products to have an advantage in initial settlement in global markets given Walmart's global distribution network. hy said its domestic sales channels are currently under discussion.

ARIH's first product lineup comes from hy and Paldo's main businesses. It includes 14 types of stir-fried noodles and three items: a postbiotic energy drink and dual biotic soda. Paldo will manufacture and sell the noodles and the postbiotic energy drink, while hy will manufacture and sell the dual biotic soda. The plan is to raise synergy by sharing production capabilities and product categories.

A hy official said, "The ARIH brand was planned with the goal of becoming a brand that will run long-term in overseas markets, not just a simple collaboration," adding, "Rapid settlement in the market through the large chain Walmart is the priority, and we plan to consider additional distribution networks later."

It remains to be seen whether the structure combining equity investment and IP will lead to actual sales performance and improved profitability. Even if it secures initial awareness through placement at Walmart, it needs to prove repeat purchases and brand sustainability. The industry is also offering assessments that ARIH could become a meaningful test case in hy's diversification and global expansion strategy.