[Edaily Reporter Kim Ji-woo ] Food companies are launching a series of premium products that differentiate themselves through unique ingredients and manufacturing processes. Rather than raising prices on existing products, they are targeting consumers with new products in a higher price bracket.

According to the food industry on the 1st, major food companies such as SamyangFoods(003230), Nongshim(004370), and CJ CheilJedang Corp(097950) are expanding their premium product lines by differentiating themselves through raw materials and cooking methods. They have shifted their focus beyond simply providing a convenient meal to recreating the flavors and textures typically enjoyed at restaurants right at home.

A prime example is SamyangFoods. Launched last November, “Samyang 1963” revives the lard-frying method once used in the production of Samyang Ramen. Instead of standard vegetable oil, the noodles are fried in lard to emphasize their distinctive nutty flavor. From its launch through August of this year, the product recorded cumulative sales of 20 million units and revenue of 27.8 billion won.

SamyangFoods expanded its premiumization strategy last July with the launch of the premium jajang ramen “Jjaru.” The company put great effort into recreating the taste of jajangmyeon served at restaurants by combining beef-fried noodles with liquid jajang sauce and flakes containing diced beef. Unlike existing jajang ramen products, it also offers enhanced convenience by allowing consumers to prepare the meal without draining the cooking water.

Market response has been positive. “Jjarur” surpassed cumulative sales of 10 million packs in about 100 days after its launch and ranked second in the domestic jajangmyeon instant noodle market share according to Nielsen. SamyangFoods aims to achieve 10 billion won in sales by the end of the year. The company explains that sales of its existing product, “Jjajaroni,” have also increased by 5% compared to the previous year’s cumulative total, indicating that the launch of the new product has not cannibalized sales of the existing product.

Nongshim is targeting the premium market by leveraging its flagship brand, “Shin Ramyun.” Following “Shin Ramyun Black,” which features a rich broth made with pork bones and generous toppings, the company launched “Shin Ramyun Gold” in January of this year, a product based on chicken broth and enhanced with chashu pork and bok choy.
Shin Ramyun Gold surpassed cumulative sales of 10 million packs in just about a month after its launch. In a Seoul-area ramen sales survey released by Nongshim last August, it also ranked fourth in overall sales.

Behind this premiumization strategy lies the advantage of being able to set higher prices than existing products. In fact, based on prices at E-MART Co., Ltd., a 5-pack of Samyang Ramen costs 3,080 won—616 won per packet—while a 4-pack of Samyang 1963 costs 5,980 won—1,495 won per packet. The price per 100 grams, adjusted for the difference in weight, is 513 won and 1,141 won, respectively—a difference of about 2.2 times. Similarly, while Nongshim’s Shin Ramyun costs 692 won per 100 grams, Shin Ramyun Black costs 1,147 won, making it about 66% more expensive.

While it is difficult to avoid consumer backlash when directly raising the price of long-standing ramen products, new products that incorporate new ingredients and manufacturing processes can establish a separate price point from existing products. For companies, this represents an opportunity to broaden consumer choice while increasing the average selling price. It is also appealing because it allows them to target demand from consumers who want to enjoy restaurant-quality flavors at home, especially as the cost of dining out has risen.

However, a high price does not necessarily guarantee success. HARIM Co., Ltd. entered the premium ramen market in 2021 with the launch of “The Misik Artisan Ramen,” priced at 2,200 won per package. Although the company emphasized its distinctive broth flavor and ingredients, it struggled to expand its market share in a sector dominated by established ramen giants.

Profitability pressures stemming from business expansion also persist. Last year, HARIM Co., Ltd.’s revenue reached 109.4 billion won, a 36.3% increase from the previous year; however, its operating loss widened to 146.7 billion won from 127.6 billion won the year before. The cost of goods sold reached 167.9 billion won, exceeding revenue, while selling, general, and administrative expenses totaled 88.2 billion won. This was due to costs incurred from investments in production facilities and the expansion of distribution networks as the company broadened its business beyond instant noodles to include instant rice, soup dishes, and dumplings. This illustrates that even when growing the business by focusing on premium products, securing profitability requires significant time and expense.

Ultimately, the key question is whether the initial buzz surrounding a product’s launch can be translated into consistent purchases. An industry insider stated, “For premium products, it is crucial that consumers perceive enough value to justify the higher price and make repeat purchases,” adding, “Since it typically takes about 10 years for a product to become a steady seller, the key lies in whether the company can secure sustained demand and profitability.”

Lee Eun-hee, a professor in the Department of Consumer Studies at Inha University, said, “We must move beyond simply adding a little more quantity or ingredients and slapping a ‘premium’ label on it,” adding, “New approaches that stimulate consumer curiosity—such as changing the product’s form or using unique ingredients—are necessary.” She went on to emphasize, “Since it takes time for consumers to develop a taste for new foods, rather than focusing solely on immediate sales, we must encourage repeat purchases and grow the market over the long term.”