Nurturing novelty: Samyang, CJ and more MNCs join South Korean project tapping big brand networks to export SME innovations

23-Jul-2024 - Last updated on 23-Jul-2024 at 02:15 GMT

Samyang, CJ Cheiljedang, GS25 and more large South Korean corporations have joined a local government project tapping on their distribution networks to help local SME food exports. ©Getty Images

Samyang, CJ Cheiljedang, GS25 and more large South Korean corporations have joined a government initiative to boost SME food exports and distribution channels.

The project is set to cover a wide variety of both processed and non-processed agri-food products with the exception of aquatic items, and the South Korean Ministry of Agriculture, Food and Rural Affairs has deemed this an important step towards ensuring shared growth in the food sector.

“This initiative has been launched to nurture small and medium-sized enterprises with large export potential, by allowing them to utilise the global networks and distribution channels of large enterprises, thus supporting their marketing activities abroad,” MAFRA Agricultural Innovation Policy Office Deputy Minister Kwon Jae-han said via a formal statement.

“The ministry has met with multiple major local companies such as GS Retail, Samyang, Lotte Chilsung Beverage and CJ CheilJedang [to discuss] business models for shared growth and collaborations.

“[There have already been some positive results] with GS25, the convenience store brand of GS Retail, in the motions to collaborate with SMEs to introduce Korean desserts to young consumers in the Vietnamese and Mongolian markets.

“As January 2023, the number of convenience stores overseas run by GS25 reached 500 in total [so its collaboration], for instance with Bontemps which is known for its hot-selling twisted doughnuts in Korea, will be beneficial to bring these to the foreign markets.

“Various other large enterprises in the food industry have also put forward models of such collaboration to work together with SMEs to expand into new export markets.”

The deputy minister highlighted such collaborations, as well as public-private partnerships, as crucial to the development of South Korean food exports and especially to help smaller firms grow their potential at an accelerated rate, promising more incoming assistance from MAFRA moving forward.

“The government will continue to provide the necessary policy support to help increase the exports of food products of SMEs and processed Korean agri-food products,” he said.

“Public-private cooperations including the operation of the K-Food Plus Export Expansion Promotion Headquarters [have already seen very positive numerical outcomes] – last year, the export value of agri-food products and related forward- and backward-linked industries reached a record high of US$12.1bn.

“This was despite challenging external conditions such as the global economic slowdown [and] this year, we will make efforts to further expand export markets for Korean food products and continue this momentum.”

Shared growth for all

In addition, Kwon emphasised that having MNCs open up their distribution pathways to help SMEs is not an initiative that is expected to solely benefit the latter, but instead to move towards shared growth for both sectors within the food space.

“This sort of collaboration is aimed at promoting shared growth between the large enterprises as well as the small and medium-sized enterprises - To this end, the emphasis is on developing business models that contribute to this shared growth,” he said.

“The main target is to provide a wide range of support for the food industry as a whole, in order for Korean food products to become a flagship export sector that represents South Korea.”