![Paldo cup noodle products on display at a hypermarket in Seoul on Aug. 23. [Yonhap]](https://wimg.heraldcorp.com/news/cms/2026/09/23/rcv.YNA.20260823.PYH2026082304070001300_P1.jpg)
Even as foreign investors continue to sell Korean stocks broadly, their selective buying of food and beverage shares stands out. Unlike other recently strong sectors, food and beverage stocks have attracted growing foreign ownership even as share prices pulled back — a dynamic analysts attribute to rising expectations of earnings improvement driven by price hikes and easing raw-material costs.
Foreign ownership of the food, beverage and tobacco sector stood at 11.98 percent, up 1.30 percentage points from the previous month, according to Korea Exchange. Securities stocks rose 0.73 percentage points, chemicals 0.67 percentage points and construction 0.42 percentage points. Among major sectors that saw increased foreign ownership recently, food, beverage and tobacco posted the largest gain.
Of the 20 stocks in the food, beverage and tobacco sector, 19 are food and beverage companies, with KT&G being the sole exception. The group includes major food makers such as Orion, Nongshim, Samyang Foods, CJ CheilJedang, Lotte Chilsung, Lotte Wellfood and Ottogi. Since August, foreigners have net purchased 177 billion won ($130 million) worth of shares in the sector.
The buying is widely seen as a preemptive move ahead of anticipated earnings improvement. Over the same period, the food, beverage and tobacco sector index fell more than 9 percent from the prior month. The index climbed to 5,115.13 at the end of August before dropping to 4,624.47 on Tuesday. Foreigners were effectively building their positions in food stocks as prices declined.
Industry analysts say the sector is entering a period where price hikes and lower input costs are converging to lift earnings. Major food companies raised prices in succession from late July through August — Lotte Chilsung hiked prices on 44 products across 12 brands by an average of 5.3 percent, and CJ CheilJedang raised prices on eight product categories by an average of 8 percent. Nongshim lifted prices on 43 brands by an average of 5.8 percent, while Pulmuone raised prices on 30 products by an average of 6.7 percent.
"If the effect of price hikes coincides with cost stabilization, the improvement in earnings could be substantial," said Jo Sang-hun, a research analyst at Shinhan Securities. "Because higher selling prices are being maintained while cost pressures remain limited, price increases can translate into profit improvement rather than just higher sales." He added that crop conditions for key raw materials such as soybeans and corn are favorable, and Chinese pork prices remain low, reducing concerns about margin erosion.
However, a stronger won does not affect all food and beverage stocks in the same way. Companies with a high proportion of overseas sales face greater currency translation pressure when the won strengthens, meaning sensitivity to exchange-rate moves varies by company.
"The food and beverage sector has long been seen as a beneficiary of won strength because it relies heavily on imported raw materials, but as overseas sales grow, the exchange-rate impact is diverging by company," said Kwon Woo-jeong, a researcher at Kyobo Securities. "Investors should pay attention to food stocks with a high domestic revenue share — such as Lotte Wellfood, where a 10-won strengthening of the won is estimated to improve annual operating profit by about 2.5 billion won."
kacew@heraldcorp.com
