Paris Baguette, a bakery-cafe chain owned by South Korean food giant SPC Group, recently opened its 174th U.S. store in Columbus, Ohio. Paris Baguette plans to expand its presence to 1,000 stores in the U.S. by 2030.
Korean food and cosmetics companies, collectively known as K-food and K-beauty, are turning to the U.S. for growth. Faced with the limitations of the domestic market and uncertainties in China, these companies are ramping up efforts to capture the U.S. market.
Recent export data underscore the growing appeal of Korean products among American consumers. Korea’s agricultural exports to the U.S. surpassed China in the first half of this year to reach the top spot, and cosmetics exports to the U.S. surged by more than 60% during the same period.
“Around 70% of Olive Young’s global sales come from the U.S.,” said Hong Gi-eun, Executive Vice President of Global Commerce at Olive Young, South Korea’s biggest beauty retailer.
Korea’s cosmetics exports reached a record high of $4.8 billion in the first half of this year. By country, China led with $1.21 billion, followed by the U.S. at $870 million. While exports to China fell by 14.1% compared to a year ago, exports to the U.S. rose 61.1%. This growth boosted the cosmetics trade balance with the U.S., which surged from $351.38 million in the first half of last year to $715.16 million this year.
Korean food is also seeing increased demand. Korea’s agri-food exports reached $4.766 billion in the first half of this year, up 6.7% from the same period last year. The U.S. emerged as the top export destination, followed by China and Japan. Exports to the U.S. jumped 17%, while exports to China rose by a mere 3.1%. “Rising interest and demand for fermented and vegan food products from U.S. consumers led to record exports,” said the Ministry of Agriculture, Food and Rural Affairs.
Korean companies are witnessing tangible results from the U.S. market. CJ CheilJedang said the U.S. accounted for 81% of the company’s overseas sales, which was $4.38 trillion last year. Samyang Foods also exceeded $100 million in sales in the U.S. Korean fried chicken chain BBQ operates over 700 stores, with more than 250 in the U.S. alone. “We opened a store in Arkansas in June and have a presence in 29 out of 50 U.S. states,” said a BBQ representative.
“After deploying the U.S. THAAD system in Korea backfired in terms of relations with China, companies became wary of relying heavily on China,” said a Korean beauty brand official. “The rising trend of the so-called ‘patriotic consumption’ in China is also a risk, which has led many Korean companies to seek alternative markets, with the U.S. emerging as a favorable option.” This coincided with the rising popularity of K-beauty and food products in the U.S.
“Demand in the U.S. has grown so fast that it’s hard to keep up with supply,” a Samyang Foods representative said. In 2019, China accounted for 45% of Samyang Foods’ overseas sales, but in the first quarter of this year, sales in the U.S. and China reached parity at around 25% each.
Korean companies are also tailoring their strategies to cater to diverse American consumers. Tirtir, a beauty brand known for cushion foundations, initially offered products in five shades to match Asian skin tones but has expanded to 30 shades to accommodate diverse skin tones in the U.S. Nongshim, Korea’s top instant noodle maker, plans to upgrade its second U.S. factory in October to produce more square noodles. Binggrae has introduced chocolate-coated flavors of its Melona ice pops.
Korean food and beverage companies named the U.S. their most desired export market, followed by Japan, Canada, Singapore, and Vietnam, according to a survey conducted by the Korea Trade-Investment Promotion Agency in June. China did not make the top five.
