As the domestic food and beverage industry seeks a breakthrough from sluggish internal demand, hy (formerly Korea Yakult) has also embarked on overseas expansion. Following the launch of the 'Helicobacter Project Will' in China and the United States, the company plans to enter the Southeast Asian market, including Thailand, in the second half of this year. Will is a fermented milk brand that has steadily gained popularity for 25 years since its launch. It represents about a quarter of hy's total sales.
According to the Financial Supervisory Service's electronic disclosure system on the 13th, hy's annual sales over the past three years increased to 130.63 billion won in 2021, 137.76 billion won in 2022, and 1.519 trillion won in 2023. However, there is a need for improvement in profitability, as the company reported an operating loss of 31.2 billion won in 2021, an operating profit of 24.5 billion won in 2022, and an operating loss of 27.4 billion won in 2023. The net losses were 22.4 billion won, 50.9 billion won, and 28.6 billion won, respectively.
The reason hy has reported net losses for three consecutive years is due to several subsidiaries that have been acquired over the years experiencing deficits. hy announced its goal of transforming into a comprehensive distribution corporation after changing its name from Korea Yakult in March 2021. In the subsequent three years, the company acquired eight corporations, several of which are experiencing losses. Moreover, there are challenges shared across the food and beverage industry, as domestic growth has reached a limit. Consequently, hy is actively seeking overseas avenues.
After diversifying its business, the main sectors have become food and beverage, medical and bio, and logistics. hy plans to continue expanding into new businesses while enhancing the competitiveness of its core fermented milk products, particularly Will, and actively pursuing entry into overseas markets.
Will is hy's flagship product, selling 200 million units annually and generating sales of 33 billion won. The cumulative sales have surpassed 6.3 trillion won. It is reported that the product has been improved 10 times since its launch. Will contains the proprietary plant-derived patented probiotic 'HP7' developed by hy. HP7 refers to seven strains of probiotics selected for their high binding affinity to Helicobacter pylori. It plays a role in expelling Helicobacter bacteria from the body.
As the leading domestic company in fermented milk, hy expresses confidence in its technology and quality. The company holds over 5,000 strains of bacteria. Researchers collect samples nationwide, sourcing good probiotics for research and development. It is characterized by securing Korean probiotics separated from kimchi, traditional fermented sauces, and salted fish. Previously, hy successfully localized probiotics domestically for the first time after establishing its Central Research Institute in 1976.
After launching Will in the Chinese market last year, hy recently placed the product in H Mart, a major Korean supermarket in the United States. Notably, the U.S. fermented milk market is valued at 17 trillion won, eight times larger than the Korean market. The export products feature special packaging with the face of brand model Son Heung-min. A hy official noted, 'In the second half, we plan to enter the Southeast Asian market, including Thailand,' adding that while complete products are exported to China and the United States, local production methods are also being considered for Southeast Asia.