CJ Freshway posts 6.7% sales growth in Q3 amid online expansion

CJ Freshway said Thursday its third-quarter consolidated sales rose 6.7 percent year-on-year to 961.4 billion won ($717 million). Gross merchandise value for the same period climbed 16.9 percent to 1.44 trillion won. The company attributed the top-line growth to its online food ingredient distribution and institutional catering businesses.

Operating profit fell 29.2 percent to 23.8 billion won, though the company remained in the black. CJ Freshway said the decline reflected investment in platform growth and the expansion of its customer and seller base, adding that key businesses maintained their growth momentum despite a prolonged slowdown in the dining-out sector.

Sales in the food service ingredient and food raw material distribution segment reached 446 billion won in the third quarter. Online business sales surged 226.6 percent year-on-year. The quarterly GMV of Sikbom — the company's online food ingredient platform — hit 113.5 billion won, surpassing 100 billion won in a single quarter for the first time.

CJ Freshway has been building Sikbom's platform competitiveness by broadening its product lineup and expanding logistics services. The number of integrated-delivery products more than doubled from a year earlier, and per-store purchase amounts rose 14.3 percent. The company said growth in transaction volume was driven by stronger online-to-offline capabilities combining its nationwide logistics infrastructure with the Sikbom platform.

The food raw material segment posted 15.7 percent sales growth year-on-year, led by core products such as dairy. The franchise channel within the food service ingredient segment also grew 9.4 percent, as distribution volumes expanded across both new and existing clients.

The catering business recorded third-quarter sales of 509.3 billion won. The institutional catering segment grew 6.3 percent year-on-year, driven by corporate cafeterias and hospitals. Sales of Freshmeal On — a kitchen-free catering model with no location restrictions — jumped 52.5 percent from a year earlier. The catering ingredient distribution segment continued to grow, led by the kids and school sectors.

In the fourth quarter, CJ Freshway plans to strengthen Sikbom's product and logistics competitiveness and focus on expanding its customer and seller base to grow transaction volume. In the catering business, the company will continue restructuring its portfolio around profitability and improving operational efficiency to pursue profit-driven growth.

Im Seong-cheol, chief financial officer of CJ Freshway, said online GMV through Sikbom surpassed 100 billion won in the third quarter — just six months after the platform's acquisition — confirming the growth trajectory of the online food ingredient distribution market. "We will refine our CRM-based marketing activities and accelerate online business growth through stronger product competitiveness and logistics services to upgrade our revenue model," he said. Im added that the results of company-wide profitability improvement efforts would become visible from next year, and that the company would also enhance operational efficiency in existing businesses, including the kitchen-free model, to sustain solid growth beyond the online segment.