R&D spending by South Korean food companies is increasingly split between firms cutting back to protect profits and those expanding investment on the strength of overseas growth. Companies facing weaker results and higher input costs have tended to trim research budgets and lean on proven products rather than fund new launches. Meanwhile, firms with solid overseas performance have widened the gap by boosting R&D as a longer-term growth engine.
An analysis of filings with the Financial Supervisory Service showed that R&D outlays among major food makers varied sharply depending on earnings and the share of sales generated abroad.
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. Its operating profit margin fell from the 5% range to the 4% range, increasing pressure to cut costs, the analysis said.
Lotte Chilsung Beverage, Ottogi and Nongshim also reduced spending. Lotte Chilsung cut R&D to 26.8 billion won from 29.6 billion won, down 9.5%. Ottogi lowered it to 19.3 billion won from 20.4 billion won, down 5.4%. Nongshim reduced it to 28.3 billion won from 29.5 billion won, down 4.1%. The pullback was most evident among companies more dependent on the domestic market or slower to recover from rising raw-material costs.
By contrast, companies sustaining growth overseas increased investment. 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 in absolute terms among major food companies. R&D as a share of sales rose to 1.29% from 1.09%, reaching the industry’s top level. The company’s push to expand global businesses centered on ingredients and bio-related operations helped drive the increase.
Samyang Foods, which has posted record results with overseas sales accounting for more than 80% of revenue, increased R&D spending to 12.7 billion won from 7.8 billion won, up 62.8%. Backed by an operating profit margin in the 20% range, it has focused funding on locally tailored products and strengthening brand competitiveness. Orion, with overseas sales making up more than 60% of revenue, increased R&D to 6.1 billion won from 5.7 billion won, up 7.0%.
As overall R&D investment cools, 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 “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 more efficient management are becoming more pronounced,” a food industry official said. “But if this conservative stance lasts, basic investment to secure new technologies could shrink, and the gap in product competitiveness between companies could widen.”
* This article has been translated by AI.
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