R&D spending by South Korea’s food companies is increasingly split between firms cutting back to save costs and those expanding investment on the back of strong overseas results. Companies facing weaker earnings and higher input costs have tended to trim research budgets and focus on proven products rather than fund new launches amid high inflation, rising raw-material prices and soft consumer demand.
An analysis of filings with the Financial Supervisory Service showed R&D spending among major food makers varied sharply depending on performance and the share of sales generated overseas.
Industry leader CJ CheilJedang spent 194.5 billion won on R&D last year, down 16.6 billion won, or 7.8%, from 211.1 billion won a year earlier. The company’s operating profit margin fell from the 5% range to the 4% range over the same period, putting pressure on cost controls, the analysis said.
Lotte Chilsung Beverage, Ottogi and Nongshim also reduced spending. Lotte Chilsung’s R&D costs fell 9.5% to 26.8 billion won from 29.6 billion won. Ottogi cut 5.4% to 19.3 billion won from 20.4 billion won, and Nongshim trimmed 4.1% to 28.3 billion won from 29.5 billion won. The pullback was most evident among companies more dependent on the domestic market or slower to recover from higher raw-material costs.
By contrast, companies maintaining growth overseas increased R&D, treating it as a longer-term engine. Daesang raised R&D spending to 56.9 billion won in 2025 from 46.5 billion won in 2024, up 22.4%, or 10.4 billion won, the largest increase by amount among major food companies. Its R&D-to-sales ratio rose to 1.29% from 1.09%, reaching the highest level in the industry, the analysis said, as its global expansion strategy centered on ingredients and bio businesses drove higher investment.
Samyang Foods, which the report said has posted record results with overseas sales accounting for more than 80% of revenue, increased R&D spending 62.8% to 12.7 billion won from 7.8 billion won. With operating margins in the 20% range, it has focused funding on locally tailored products and strengthening brand competitiveness. Orion, whose overseas sales share exceeds 60%, also increased R&D spending 7.0% to 6.1 billion won from 5.7 billion won, maintaining a steady investment pace.
As overall R&D investment tightens, product strategies are also shifting toward lower-risk moves. Instead of costly new launches, companies are increasingly reviving past hits with updated concepts. Nongshim restored its 1975 product “Nongshim Ramyun” to mark its 60th anniversary and sold 10 million packs in three months, riding a retro trend. Lotte Wellfood also brought back discontinued nostalgic products such as “Daerong Daerong,” drawing strong consumer response.
“Moves to use proven assets for efficient management are becoming more pronounced,” a food industry official said. “But if this conservative stance lasts, foundational investment to secure new technologies could shrink, and that could ultimately widen gaps in product competitiveness between companies.”
* This article has been translated by AI.
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