Nongshim Co., a South Korean food and beverage company, renewed its record in overseas business performance this year. Sales in China, the number one overseas market for the noodle maker, are making a quick recovery after a slowdown due to Korea’s deployment of the Terminal High Altitude Area Defense (THAAD) System. Moreover, Nongshim succeeded in expanding sales in the U.S. market.
Nongshim’s overseas sales are expected to grow 18% year on year to US$760 million this year. All overseas subsidiaries, including those in the U.S. and Japan, posted the highest-ever sales figures. Its sales in China had been sluggish due to the THAAD deployment, but they also reached a record high of US$280 million, up 23% from a year earlier.
In China, Nongshim scaled up sales through e-commerce and sales in metropolitan areas. In Japan, the Korean food giant strengthened sales at convenience stores and overcame an anti-Korea sentiment by performing various marketing activities such as holding Shin Ramen Day and operating a Shin Ramyun Kitchen Car, a food truck that offers consumers a chance to taste Shin Ramyun. Every year, the truck travels across Japan for seven months, promoting Shin Ramyun to Japanese consumers.
In Australia, Nongshim continued to expand sales, targeting local consumers as well as Korean residents. In major Southeast Asian countries such as the Philippines and Vietnam, its sales ballooned via local supermarkets and convenience stores.
In the U.S., Nongshim posted US$225 million in sales, up 12% from a year before, as Shin Ramen was distributed to all Wal Mart branches recently and sales at major distributors such as Costco and Kroger soared.
An encouraging fact is that black, white and Latin consumers in the U.S. consumed more ramen noodles than Asian consumers this year for the first time. The ratio of sales between the mainstream market and the Asian consumer market stood at 50:50 last year but it changed to 60:40 this year.
Shin Ramen took the lead in boosting sales. The instant noodle product has become a food brand that represents Korea at world-class distribution channels including Wal-Mart, Costco, Amazon, and Alibaba.
Nongshim will complete its expansion of production lines at its factory in Los Angeles this month and accelerate its penetration of the U.S. market. The new production lines will target the growing U.S. cup noodle market.
The U.S. ramen market is estimated at US$1.2 billion per year and cup ramen and bagged ramen go about fifty-fifty. Nongshim explains that cup ramen noodles have a brighter future in the U.S. ramen market as microwave oven cooking is popularized in the U.S.
Nongshim currently holds a 15% market share in the U.S., placing third after Toyo Susan (46%) and Nissin (30%), both of which are Japanese noodle makers. "Nongshim products are gaining popularity among consumers not only in the U.S. but in Canada and South America," said Shin Dong-yeop, president of Nongshim America. "We aim to top the U.S. market within several years by overtaking Japanese noodle makers based on Nongshim's product quality and streamlined production and distribution system.
Nongshim set its overseas sales goal for next year at US$885 million, up 16% from this year.