[비즈한국] A change is occurring in the food industry, which was long considered a stable sector. Business reports for this year show a uniform decrease in the number of employees across most major food companies. This is interpreted as a result of mounting pressure to cut costs, as stagnant domestic demand, rising input costs, and the government’s push for price stability have left little room for price hikes and slowed earnings growth. Industry insiders suggest that as food companies work to improve their business fundamentals, they are opting to reduce headcount first.
Based on business reports disclosed on the 19th, Lotte Wellfood 280360 had 5,825 employees, a decrease of 724 from the previous year. Lotte Chilsung 005300 Beverage dropped by 499 to 5,217, CJ CheilJedang 097950 decreased by 155 to 8,232, Nongshim 004370 fell by 34 to 5,501, and Ottogi 007310 reduced its staff by 72 to 3,388. In contrast, Samyang Foods had 3,025 employees as of the end of last year, an increase of 635 compared to the previous year. Within the same food industry, the divergence between domestic-focused firms and those expanding exports has been clearly laid out by the numbers in these business reports.
Looking at the background, worsening industry conditions and restructuring are intertwined. Both Lotte Wellfood and Lotte Chilsung Beverage implemented voluntary retirement programs last year. Both companies cited the need to strengthen future competitiveness, targeting mid-level managers. In February, CJ CheilJedang CEO Yoon Seok-hwan also stated that "small changes are not enough to overcome this wave," declaring that the company would push for comprehensive innovation, including business structure optimization, financial structure improvement, and organizational culture reconstruction.
Behind such moves lies a deterioration in profitability. Last year, CJ CheilJedang's operating profit fell by 15.2% compared to the previous year, while Lotte Chilsung Beverage and Lotte Wellfood saw drops of 18.8% and 30.0%, respectively. The problem is that while costs are rising, prices cannot be easily increased. Despite the burden of raw material costs, labor costs, and logistics fees, prices for major items like ramen and cooking oil were actually lowered amid the government's stance on price stability.
Four ramen companies—Nongshim, Ottogi, Samyang Foods, and Paldo—lowered prices on certain products by 4.6% to 14.6%, and cooking oil firms including CJ CheilJedang, Daesang, and Dongwon F&B also reduced prices by an average of 3% to 6%. This is why interpretations are emerging that the food industry has entered a structure where “prices cannot be raised, profits are shrinking, and the first thing to go is the staff.”
A notable aspect is Samyang Foods’ divergent path. Samyang Foods increased its staff by 635, making it almost the only major food company to expand its scale. The background to this is robust exports and increased production capacity. Samyang Foods completed its second Miryang plant in June last year, and at the time, the local community and the company expected a job creation effect of around 150 people.
There were even projections that total new job creation, including the first plant, would reach around 440. It is clear that the expansion of overseas demand, led by the Buldak brand, has translated into actual increases in personnel and facility expansion. This can be read as a signal that rather than a general crisis in the food industry, the gap between domestic-focused companies and export-growing companies is widening further.