South Korea's food industry is implementing restructuring measures and downsizing operations as companies struggle with a domestic consumption slump caused by high inflation.
According to industry sources on the 27th, Lotte Wellfood is proceeding with a voluntary retirement program this year, following a similar initiative last year. The program targets employees aged 45 or older (born before 1981) with at least 10 years of service.
Lotte Wellfood plans to support departing employees in planning their second careers. In addition to statutory severance pay, employees with 10 to 15 years of tenure will receive 18 months of base salary, while those with 15 or more years will receive 24 months. The company will also provide 10 million won in re-employment support and up to 10 million won per child for employees with college-age children.
Lotte Wellfood previously conducted a voluntary retirement program in April last year. The latest decision comes amid declining performance. While the company posted record consolidated revenue of 4.216 trillion won last year, up 4.2% year-over-year, operating profit fell 30.3% to 109.5 billion won. The company recorded an operating loss of 10.5 billion won in the fourth quarter. Lotte Wellfood plans to accelerate efforts to enhance future competitiveness through organizational efficiency improvements, mega-brand development, and strengthened global expansion.
In January, Binggrae implemented a voluntary retirement program for all employees, including those at Haitai Ice Cream. The move aims to improve cost structure as signs of declining profitability emerged due to rising costs and weakening consumption. The company said the measure was in response to changing business conditions. Binggrae's operating profit last year fell 32.7% year-over-year to 88.3 billion won, while revenue grew only 1.8% to 1.4896 trillion won.
CJ CheilJedang has also signaled its commitment to transformation. In a CEO message sent to all employees on the 10th, CEO Yoon Seok-hwan emphasized that "the company must become completely different through disruptive change and innovation." This signals high-intensity reforms including business structure optimization, financial restructuring, and organizational culture innovation.
In November last year, Lotte Chilsung Beverage decided to implement its first voluntary retirement program in its 75-year history. The program targeted employees born before 1980 with at least 10 years of service. Lotte Chilsung's consolidated operating profit last year fell 9.6% year-over-year to 167.2 billion won, while revenue declined 1.3% to 3.9711 trillion won.
Meanwhile, government pressure for price stability is adding tension across the food industry. President Lee Jae-myung warned at a Cabinet meeting on the 24th that "consumers should benefit from the drop in sugar prices." Following this, flour companies including CJ CheilJedang and bakery chains such as Paris Baguette and Tous Les Jours moved to adjust consumer prices. Industry observers are watching whether this price reduction trend will spread across the broader food sector.