Innovating in and out of South Korea with K-Foods

Florian Viton is currently SVP, Global Head of Strategic Innovation at CJ Foods, South Korea’s leading food company. In this role, Florian is leading CJ Foods’ innovations beyond its core portfolio with building new commercial categories and ventures globally. Florian joined CJ Foods in 2021 after 15 years at Nestle

Beware; K-Food is around the corner! From TV dramas to music, culture to food, the world is head over heels with everything South Korean.

But what does it mean for the Food Business?

Once one of the poorest countries following the Korean War in the 1950s, South Korea has become an economic powerhouse at an ultra-fast past, seeing an extraordinary growth known as the Miracle on the Han River. South Korea is today the 11th largest economy and the 5^th largest exporter of goods and services globally.

South Korea’s vibrant energy and renowned innovative culture has been strategized into a soft power and economic growth strategy, known as Hallyu (the Korean Wave). Hallyu stemmed from TV dramas and movies in the 1990s followed by K-Pop music in the 2000s and broader entertainment and cultural influences deployed since then. The Hallyu market size is projected to reach $198 billion by 2030.

The last decade has seen the Food sector (K-Food) becoming one of Hallyu’s most prominent pillars, fueling curiosity for South Korea globally. While K-Food is still seen as a vast untapped market, spending this year is estimated at $22 billion and projected to reach $36 billion globally by 2030. The internal market, characterized by unrivalled high speed of innovation triggered by South Korean consumers’ appetite for novelty, has seen the emergence of large local players attuned to innovate at high speed and now revealing aggressive global ambitions. And they are ready to compete using both the excitement and novelty coming with K-Foods and the powerful traditional sense of Korean food culture.

On top of these local players CJ Foods is central to South Korea’s K-Food economy and takes a special place in South Korean consumers’ hearts. CJ Foods, a business unit of CJ CheilJedang, was instrumental in the early 1950s in feeding the Korean population in the aftermath of the Korean War. It has since evolved into the largest and leading food company in Korea and the pioneer and leader of K-Food globalization. Notably, CJ Foods globalization strategy was highlighted early 2024 in a Harvard Business School’s case study, titled “CJ Foods: The Path to Global Food Leadership”.

This globalization strategy is organized around a core portfolio of Global Strategic Products (GSPs), under CJ Foods’ core global brand – bibigo. Commercial intensity to dominate the global market of dumplings (bibigo mandu leads the US dumplings market since 2021, with sales over S1 billion globally), the success story of bibigo HetBahn (processed rice), or the acquisition and integration of the Schwan’s Company in the US are only few of many examples of CJ Food’s aggressive global expansion strategy.

However, South Korea is now at a critical inflection point seeing its economic growth slowing down. The country is preparing its next S-curve, powered by a new economic growth model for 2040. The South Korean’s scene is changing at a fast pace. Startups are increasing in number and furthering their influence and impact on the local market (Seoul has risen to 9^th position amongst Global Startup Ecosystems, with a 2021-2023 ecosystem value of $237 bn).

Large companies, being organized to exploit their existing portfolio, have historically been limited in their capacity to explore new businesses beyond their core. This is true globally, and maybe even truer for large Korean conglomerates. But this rapid change is forcing them to evolve the way they traditionally innovated and adopt truly additive innovation strategies. This, coupled with well-crafted globalization strategies of core portfolios and skills for high-speed innovation acquired on the South Korean market, is now giving companies such as CJ Foods a fantastic edge to capture the Hallyu’s economic potential and beyond with a dual track strategy and the capacity to access new consumers through new channels.

CJ Foods is spearheading this change amongst Korean companies in the way it explores new growth engines and innovates beyond its core portfolio. In the past three years the company developed extensive Open Innovation programs supporting its investments in selected startups focused on strategic growth pillars. CJ Foods played an active role on fostering the local startup’s scene with its Frontier Labs acceleration program.

In the past three years CJ Foods also established its INNO100 in-house venture program in Korea, housed in its dedicated INNO Play venture hub located in the vibrant Gangnam area in Seoul. Concurrently, strategic partnerships were carved out to enable the company’s intrapreneurs to operate in the world’s most advanced innovation ecosystems. In this context, the long-term partnership with San Francisco-based MISTA stands out as it gives CJ Foods an access to the Bay Area ecosystem and the capacity to explore “on the ground” new growth engines in a strategic market.

Three years later, several commercial ventures have been launched out of this effort, enabling CJ Foods to activate new growth engines beyond its core portfolio. Altive (dairy alternative products for the Korean market), Basak Chip and O’right (healthier snacks from upcycled manufacturing byproducts and from Tempeh fermentation), Seoulfully! (premium culinary sauces for foodservice, based on Korean traditional fermentation), and Kimchi-derived Probiotic Shots (a strategic collaboration with US beverage partner Tulua) being some exciting illustrations of how CJ Foods is bringing a new taste of Korea to consumers around the world!