Military canteens become sizzling new market for food firms

A soldier of the Republic of Korea Army's 9th Infantry Division in Paju, Gyeonggi Province, eats a canteen meal, June 2021. Yonhap

Military camps in the country have become a rising market for food service firms that cater canteen meals to soldiers.The market was previously off-limits to large cafeteria operators due to government regulations. However, those regulatings are being lifted this year, according to industry watchers Sunday.The government earlier this year allowed private firms to operate military camp canteens.Prior to this, the market remained open only to small-to-medium-size firms and had been dominated by experienced medium-size companies like Pulmuone Food & Culture and Dongwon Home Food.The canteen market, since the change, has seen food service firms of all sizes competing in bids tendered by different military camps and training schools.Two recent tenders were won by large firms. On April 9, the 20th Fighter Wing under the Republic of Korea (ROK) Air Force sold its canteen operating rights to Ourhome.The contract conditions the ROK Air Force set were five years of canteen service for 42.7 billion won ($31 million). The industry watchers expected that the bid, following a negotiation, would be compromised at a price of around 90 percent of the tendered value — 38 billion won.

The other large canteen operator that took a share in the market is Samsung Welstory. According to the Defense Acquisition Program Administration, Korea Military Academy in Seoul on March 22 selected the food service arm of Samsung Group as an exclusive contractor for its canteen service.The three-year deal is worth 12.7 billion won. The company marked the country’s first case in which a large private firm sealed a deal with a military entity for canteen service.The academy’s bid had attracted 10 local food service companies, the most number the industry has seen, according to market experts. The companies included large-size firms like Shinsegae Food, Hyundai Green Food, Ourhome as well as medium-size firms.The year has also seen other canteen service deals won by smaller-size firms. The canteen service bid of the ROK Air Force’s 19th Fighter Wing went to Dongwon Home Food for 43.8 billion won on March 21, while Pulmuone Food & Culture won a 33.6 billion won bid tendered by ROK Marine Corp’s Camp 3283 on March 7. Pulmuone also nabbed other deals tendered by the ROK Navy’s Camp 7001 (19.5 billion won) and the ROK Air Force’s 11th Fighter Wing (41.5 billion won) in February and January, respectively.

Heated competition in the market comes after the government had decided to spend more on canteen meals.After encountering public criticism for the poor quality of military canteen meals revealed by service members’ online posts with photos in 2022, the government increased the unit price for canteen meals per soldier per day from 11,000 won to 13,000 won. This year, it was raised again to 15,000 won.More money means better ingredients and higher-quality meals. Ourhome, for example, said it will serve grilled eel and pork cutlets from the Japanese food franchise Saboten to the 20th Fighter Wing, items that have never appeared in military canteen dishes before.The military canteen market is attractive to food service companies because it provides a consistent revenue stream over a long period of time.Market experts said some of the companies have begun targeting the Korea Army International Defense Industry Exhibition 2024 in October in Gyeryong, South Chungcheong Province, to promote themselves to the top brass who will be in 토토사이트 attendance.

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