KOREA

 
Korean Noodle Firms to capitalise on regional crave for fiery flavors

The crave for fiery noodle flavors started in Korea when Samyang Foods released Buldak Spicy Chicken Ramen in 2012. Initially, this product was launched for the niche market comprising of local spicy food lovers, but the company did not expect that the product receives tremendous acceptance from customers abroad, said Samyang Foods Marketing Manager, Park Jung Seok.
Buldak or ‘fire chicken’ refers to grilled chicken marinated in super-spicy red chilli paste. It remains unknown where the meat dish originated, but it became popular among South Koreans in the early 2000s.
The regional popularity of Buldak started through YouTube when a video was uploaded challenging foreigners to try the super spicy Buldak ramen. This video had gone viral and since then, thousands of locals and foreigners have taken up the challenge, dubbing it the ‘fire noodles challenge’ and at the same time build up the popularity of Korea’s spicy ramen products.
Park added, “It was only in 2016 that Buldak ramen fever hit the Southeast Asian market. It was when our skyrocketing sales graph hit its peak.” Due to the unprecedented popularity, Samyang Foods started releasing different variations of the Buldak series namely Cheese Buldak Ramen, Mara (Chinese spice) Buldak Ramen, Curry Buldak Ramen and Carbo Buldak Ramen, to mention a few. In 2017, Haek Buldak Extra Spicy Chicken Ramen, which measures 8,000 Scoville Heat Units, hit the local market. It doubles the spiciness of the original one.
To many Koreans, spicy foods actually relieve stress, and Buldak Ramen is a much more cheaper alternative compared to restaurant food. Samyang Foods sold 400 million packs of Buldak ramen in 2017 alone. Since 2012, it sold 1 billion packs. The company is currently operating at full capacity its production line.
Since its introduction of the spicy ramen flavors, Samyang Foods managed to climb up to become the 3rd largest instant noodle player in Korea with 11.3% share, fast catching up with Ottogi (22.4%) and Nongshim (55.8%). To further expedite is growth, Samyang announced in November 2017 to build 4 more production lines at an investment of US$74 million. Samyang only hopes the growing demand is a long term trend and not just a short term ‘fad’.
With the completion of the 4 additional production lines, Samyong annual production capacity will increase to 1.5 billion packs of ramen, up almost 4-fold from 400 million packs presently.
Having successfully expanded its sales portfolio across the globe including the US, Europe, Australia and Southeast Asia, Samyang now plans to make an aggressive foray into the Halal market. “In September, we received the Halal approval by MUI, Indonesia's top Islamic clerical body,” boasted Park. He said that Halal-certified Buldak ramen will be available in Indonesia in 2018.
Industry experts estimated that the Indonesian instant noodles market is valued at Won 4.4 trillion (US$4.09 billion) a year, followed by Vietnam with Won 1.8 trillion (US$1.67 billion) and Thailand with Won 1.5 trillion (US$1.4 billion). China is the largest market at Won 16 trillion (US$14.86 billion).
A separate report from Mintel showed that nearly 3 million tonnes of instant noodles were sold in China in 2016, making it the largest market in this region (based on volume). It is however a stagnant market, having not really grown during the last few years. Indonesia, on the other hand, is currently a more promising market, with above-average growth rates (11% annually) and volume consumption (5.8kg per capita). South Koreans, on the other hand, eat the most instant noodles however at 8.3kg per capita. See Chart 1.0 for further details.
Latest Korean government data released showed that exports of South Korean-made instant noodles, or "ramyeon", surpassed the US$300 million mark for the first time ever on the back of strong popularity in China, the US and Southeast Asian nations. It recorded US$380 million in sales in 2017, up 31.2% from previous year.