Ladies and gentlemen, thank you for joining us today. Let us begin the conference call for Q1 2022 earnings report of CJ CheilJedang. We'll first have CJ team's presentation, followed by Q&A with the investors dialed in for today's call. For anyone with a question, please press star and the number one. We'll now begin CJ CheilJedang's presentation. Ladies and gentlemen, I am Jun Seong , Head of IR Team and Finance Strategy. We'll now begin the Q2 2022 business reports for CJ CheilJedang. Let me remind you that Korean to English simultaneous interpretation will be provided for foreign investors. Let me first introduce the CJ team.
We have Mr. Kang Kyoung-Suk, Head of Finance Strategy, Mr. Ansan Jung, Head of Finance Planning, Mr. [Kim Jung-Un], Head of Food Korea Business Management, Mr. Cho Jae-beom , Head of Food Global Business Management, Mr. Han Kyong-Wook, Head of Bio Business Management, and Mr. Hwang Hyeon-ju, Head of Feed&Care Business Management. Mr. Kang will first walk you through the business results, followed by sharing of progress on key strategy execution and outlook by respective presenters. We will move on to Q&A.
Ladies and gentlemen, I am Kang Kyoung-Suk , CFO of CJ CheilJedang. Today's agenda includes Q2 highlights, earnings analysis by business unit, key indicator analysis, and progress on key strategy execution, followed by Q3 outlook. Let's flip to page five. In Q2, CJ CheilJedang achieved 22% growth in sales year-over-year and 4% in operating profit. In food, despite increasing cost pressure in Korea, rise in sales of key strategic products overseas led to both quantitative and qualitative growth.
We have been able to see continuous increase in market share as well as sales of key strategic products such as mandu and pizza. In bio, thanks to a favorable market, bio achieved record high quarterly profits with strategic sales in high margin markets and continued growth in specialty products. Please turn to the next page. Let's now look at Q2 results excluding CJ Logistics. Thanks to consistent growth across all business units with food at 18%, bio at 44%, and F&C at 7%, CJ CheilJedang achieved sales of KRW 4.5942 trillion, which is up 22.3% year-over-year.
Despite a high base in Feed & Care, we have seen continuous growth, improvement in profit structure across all business units, leading to OP of KRW 393.4 billion, which is up 4% year-over-year. For net profit, due to decline in non-operating expenses, net profit stood at KRW 200.1 billion, down 9% year-over-year. When including CJ Logistics, sales grew 19% year-over-year to KRW 7.5166 trillion and KRW 504.3 billion in operating profit. Next, on to page eight. Let's look at performance of each business unit. First, food. Sales grew 18% year-over-year. In Korea, we focused on growth channels in line with changes in consumption patterns and continued growth by expanding core and new products that meet market needs.
Sales in Korea grew 16% year-over-year to KRW 1.3896 trillion. For overseas, we expanded online and offline coverage of global strategic products or GSPs based on Bibigo brand awareness and strengthened product lineup with new flavors catering to diverse occasions. Overseas grew 20% year-over-year to KRW 1.2167 trillion. OP grew 29% year-over-year to KRW 167.7 billion. In light of unfavorable business environment and cost pressure in Korea, there has been continued efforts to improve profit structure across all value chains and efficiently allocate resources. There has been pricing actions for certain products as well.
For overseas, we accelerated global expansion and took pricing actions for key products along with streamlining of cost structure to offset cost pressure and enhance profitability. In particular, thanks to improved profitability in the U.S., OP grew more than 60% in food overseas. If you look at the bar graph on the next page, OP margin in Q2 was 6.6%, including Schwan's PPA, and 6.4% when including the PPA. Next is more details on food sales in Korea. Product-wise, we focused on core products and demand for eating at home, along with continuous stream of new product launches to cater to consumer and market needs. Channel-wise, we focused on growth channels, namely digital B2B and convenience stores for processed food. Q2 sales in Food Korea stood at KRW 1.3896 trillion.
Now if you look at page 11, and now more details on overseas sales. In the US, we focused on scaling of GSPs through Bibigo platform and driving growth led by Asian category. As a result, we grew 21% compared to the same period last year to KRW 917.1 billion. For Asia Pacific and Europe, we continued growth thanks to expanded sales of K-food and growth channels. In China, with growth of K-food, namely mandu and chicken, and expanded coverage at B2C and digital, China saw growth of 32%. Japan focused on strengthening brand equity of Micho and Bibigo, resulting in 16% growth. Europe also grew 28%. For the region as a whole, it grew 19% compared to the same period last year to KRW 299.6 billion.
Q2 food overseas sales stood at KRW 1.2167 trillion. Next is bio. Riding on a favorable market, bio focused on strategic sales in high margin markets and continued growth of specialty products, resulting in record high quarterly profits. Sales grew 44% year-over-year to KRW 1.3197 trillion, and OP grew 15% from the same period last year, with quarterly OP standing at KRW 222.3 billion. Product-wise, in ANH, we focused on sales of key amino acids such as lysine in high price regions and expanded sales of differentiated formats such as liquid and granular, resulting in stable earnings. Trading demands through technical marketing and internal production accelerated growth of specialty amino acids.
For HNH, despite lackluster demands from the lockdown, we have been able to maintain an upper hand in pricing decisions for nucleotides enabled by stable production and supply, leading to gains in profitability. For TasteNrich, we engaged in a strategic partnership with key accounts and increased output, resulting in rise in both price and sales volume. With increasing demand in North America and sports nutrition, we have seen high growth in food amino acids. For Selecta, SPC is now proactively positioned as a high margin category, driving higher profitability, and by taking pricing actions amid rising demand for soybean oil, Selecta maximizes profits. If you look at the next page, Q2 OP margin is 16.8%, with sales of high value-added specialty products accounting for 13% in sales, maintaining a two-digit trend. Next on to Feed&Care
With continued cost pressure and limited rebound in livestock prices, price spreads narrowed. Nevertheless, to respond to changes in external environment, F&C focused on taking pricing actions and profit improvement. For sales, it grew 7% year-over-year to KRW 668.2 trillion, largely driven by increase in feed sales, thanks to pricing actions in key markets and expanded volume in Vietnam. For operating profits, it declined by 94% year-over-year to KRW 3.4 billion. Despite rising input costs and challenges in maintaining high level of price spreads, F&C is trying its best to minimize cost structure through continuous efforts. Product-wise, for feed, F&C is focusing on addressing cost pressure with efficient expense management and pricing actions. It is also working on continued growth enabled by quality, competitiveness, and sales expansion of high margin livestock to maintain profitability.
For livestock in Vietnam, despite temporary recovery in market price, cost pressure continued. With rise in hog pricing since July, margin improvement is expected. In Indonesia, delay in the Indonesian government supply control with aim to curb inflationary pressure led to sharp decline in DOC price, but efforts are taking place to minimize damage. Let's now turn to performance of CJ Logistics on page 16. With a favorable global market and profit-driven management, CJ Logistics achieved profitable growth. Q2 sales grew 14% year-over-year to KRW 3.1369 trillion, and OP gained 28% year-over-year to KRW 116.1 billion. On page 19, you can see SG&A and all operating income expenses excluding CJ Logistics. For SG&A, labor costs increased by KRW 69.2 billion and transportation costs by KRW 56.8 billion.
With cost-effective execution of resources, however, we achieved SG&A to sales ratio of 22%, down by 0.3 percentage points from the prior year, and non-operating income expenses declined by KRW 68.7 billion year-over-year to KRW 109.2 billion. If you look at the next page, when including CJ Logistics, SG&A non-operating income expenses are largely affected by performance of CJ CGV, so I'll skip the details. Next is key issues and outlook. First, we'll begin with the U.S. food business that will be presented by JB Cho of Food Global Business Management.
Thank you. This is JB Cho of Food Global Business Management. Inflation, slowing economy and other unfavorable econ conditions continue, but product innovation and our core competency drove up strategic sales, building higher market share of key products. In the U.S. grocery channel, mandu's market share as of July 2022 was 40%, widening a gap with the number two player. Differentiated taste and quality, as well as Schwan's DSD, have supported continued growth of distribution and shelf share. It's worth noting that mandu and other Asian foods are priced 23% higher than pizza, so the growing share of Asian food is helping Schwan's consumer brands achieve higher ASP. Mandu also grew in the K-12 channel by 162%, leading the momentum in food service as well. Next is update on pizza market share.
After the acquisition of Schwan's frozen pizza market share has continued to grow. Represented by Fully Loaded pizza, innovation for premiumization continues, and this with DSD-powered sales expansion and strategic pricing action, have yielded a year-to-date market share of 17.2%, a 0.9 percentage point growth year-on-year. This narrowed the gap with the number one brand to the 5 percentage point range. With this, Schwan's total market share recorded 22.6%, showing continued upward trend. Now, if you move to the next page, we'll cover one of food business' growth engines, our plant-based business. The plant-based meat and ready meal markets globally grew from 2016 to 2020 at the average pace of 14%, which is now worth KRW 7.4 trillion.
U.S., U.K., and Germany take up 49% of the total worth. This trend will likely to continue, and that's indicated by still low conversion to plant-based into processed meat and ready meal segments. For snack biscuits and milk, the plant-based takes up 10.9% and 9.4%, making the overall conversion 10%. The plant-based products in processed meat and ready meal take up only 3.1% and then 0.6% respectively. With this, we expect both the conversion and plant-based markets will grow continuously. I'd like to highlight some of our competencies in plant-based food. First is competency in TVP manufacturing. Using in-house developed equipment to process soybeans, peas, and wheat protein through a high temp, high pressure injection process will deliver an elastic texture and juiciness, just like animal meat.
Even after heat treatment, the meat-like texture stays intact, which is perfect for Korean soup and stew menu items. For flavors, we apply CJ BIO's premium clean label flavoring ingredient, TasteNrich, to reduce off flavor and deliver the savoriness. Our experience with bringing K-food to overseas markets and global manufacturing footprint will support our journey to broaden the reach of our plant-based innovations. Based on our competencies, we'd like to start in Korea to bring plant-based offerings while addressing existing pain points relating to taste and quality, as well as menu diversity to become a leading plant-based brand.
We plan to add more PlanTable items, enter the B2B market, expand into categories like plant-based oil as well as overseas markets like U.S. and Europe, as well as halal market to achieve KRW 200 billion in sales by 2025, where the global sales will take up 70%. Moving on to the structural change in bio business unit, I'll hand it over to Mr. Han Kyong-Wook , bio business unit CFO.
Thank you. I am Han Kyong-Wook , bio CFO. Flexible manufacturing for lysine sales focused on high margin regions, format diversification are part of bio's ongoing structural change, which coupled with aggressive specialty market development, have eased the impact of unfavorable conditions.
The lysine before 2020, offering all formats in all markets was the main strategy, but after 2021, specialty amino acids, including other kinds, have become available for production by the same equipment used for lysine manufacturing, which now allows more flexible manufacturing. With this, we've redirected our focus on sales in high margin regions. Diversified formats also have helped the customer lock in high margin products like tryptophan and nucleotide and specialty products like arginine and TasteNrich have growing fast. The entire bio portfolio, lysine share has declined up until 2020, but in 2021, thanks to the global hog market upcycle, the share went up, and now it stands at 28% as of the first half 2022.
Our performance is led by markets where we have market dominance such as North America, Brazil, Indonesia, and Europe. The impact of potential market contractions in the future will be limited compared to the past. For specialty products, arginine, valine, histidine are pioneering trends in the markets, thanks to our technical competency. The existing lysine manufacturing lines have been transformed to manufacture specialty amino acids as well, which drove up capacity, and we continue to block competitive entry while strengthening cost leadership. Our premium flavoring ingredient TasteNrich grew six times in sales during 2021, and it grew 150% in the first half of this year, continuing its momentum for fast growth. Going forward, clean label and plant-based food will see growth in demand, which will support the fast growth of TasteNrich.
Specialty products sales grew from KRW 38.3 billion in first half of 2019 to KRW 171.4 billion in Q2 this year, which was fivefold growth. Their contribution to 2022 sales is likely to exceed that of lysine in 2021. I'll now cover ESG updates. To embrace the diversity, equality, and inclusion, transformation in the HR system is in progress to promote DEI to create a culture for mutual growth. To ensure we have top talent who will lead future growth through innovation, programs have been set up for diverse opportunities, fair competition, outstanding performance, and exceptional incentives. We've streamlined job grades, introduced a promotion application system, exceptional incentive program, and more to transform the HR system in order to support everyone's growth, work engagement, and create a better working environment.
Employees will be given opportunities in a leveled field to unleash creativity and potential, which will lead to a culture anchored to DEI. Another effort is to expand the healthy and sustainable product for us and future generations. This year, we launched alternative dairy product, ALTIVE Plant Milk. ALTIVE Plant Milk is a plant-based high protein, high calcium drink made with brown rice and peas blended through CJ's proprietary formulation. The idea first started by millennials and Gen Z employees in their twenties and thirties. On a related note, CJ Feed&Care launched two low methane feeds. These feeds reduce 37% of animal methane compared to other feeds without compromising productivity. This is our start to lead ESG efforts in the feed and livestock industries. Next is Q3 outlook.
For food in Korea, we'll focus on on-trend product expansion, growing channels, and new opportunities presented by new consumption patterns, and we anticipate sales will continue to grow. Prices of input ingredients such as grains will continue to increase to weigh on inflationary pressure, but value chain-wide profit structure transformation, Chuseok gift set sales drive, focus on growing channels, prioritizing channels and products benefit from economic reopening and targeting at-home demand during economic slowdown will altogether mitigate adverse impact on margin. In the US, premium pizza launch, DSD-enabled market share growth, distribution and ASP growth of GSP in the grocery channel and sales network and Asian menu expansion to support the B2B sales growth will continue to support the current momentum. In Japan, as the peak season is here, Micho and mandu sales will see high growth.
In China, we'll focus on raising brand awareness among younger generations and on offline coverage with new product launch to keep growth trends. For bio, animal nutrition will see a slowing market for lysine and F&C compared to the last quarter, but still prices will remain higher than the same time last year. Stronger sales of tryptophan and continued growth of specialty amino acids will improve performance year-on-year. Human nutrition will benefit from the high season started from August and from China's economic stimulus measures as demand for nucleotide picks up again. Also, broader sales coverage and productivity improvement of TasteNrich and more will help recover performance. Feed&Care with low base effect in last year will start to gradually reflect ingredient price inflation and feed pricing.
With rebound of livestock stock prices, such as hog price in Vietnam, we expect a higher operating profit year-on-year. In summary, CJ CheilJedang's Q3 sales will increase by mid-10% and operating profit margin will be around 8%. That's the end of the prepared presentation, and we will now take questions. Questions in Korean will be translated simultaneously and English consecutively.
Let us begin the Q&A session. For those with a question, please press star and the number one. If you want to cancel, press star and the number two. We have the first question from Hanwha Investment & Securities, Ms. Han Yu-jung.
Thank you for the opportunity. I have three questions. The sales growth of Korea Food is in single digit. I would like you to separate between P&Q. As for Schwan's, I would like to talk, I would like to know about sales growth by channel. And for Schwan's PPA, it seems like it has declined substantially. Has there been any changes in the schedule?
Regarding the sales, I mean sales growth of Korea Food business by P&Q. In Q2, processed food sales grew 7% and ASP. Seventy-three percent came from increasing price and the remaining from increasing volume. As for ingredients, 95% of it came from price increase and 10% from volume increase. If we add that all together, the 16% growth, 85% came from increase in price and the remaining 15% came from increase in volume. As for the Q2 results of Schwan's, we have this business unit called Consumer Brands, and it grew 70% in dollar terms. As for food service, which is B2B, it grew slightly higher by about 27%.
We have been continuously increasing our market share with expanded sales of GSP and strategic pricing actions. We have been able to see high growth in many of the markets and areas that we play in. As for pizza, I mean, there has been launch of new products like Fully Loaded and expanded sales using DSD and increased pricing actions. As mentioned in our previous results report, we had been able to continuously raise our share of Red Baron in B2C. In the second quarter, we have seen continuous growth of 20% in sales. As for Schwan's PPA, in the first quarter, it was KRW 7.3 billion, and in the second quarter, it has slightly declined to about KRW 5 billion.
For the third and fourth quarter, it would be subject to the foreign exchange rate, but it's going to be about KRW 5-6 billion in the remaining two quarters. We'll take the next question.
We have the next question from Mr. Jaewon Hwang of Citi Securities.
I'm Hwang, Jaewon Hwang from Citi Securities. I have a question on processed foods. For starters, in terms of operating profits for quarter-over-quarter, excluding Schwan's, if you look at processed food performance in overseas, there seems to be substantial growth there. I'd like to know what were the key drivers behind such growth? My second question is, we just talked about food ingredients and Korea food business. For overseas, in the second quarter, we have to think about. I would like to know about the mix of contribution between P&Q as well as foreign exchange rate. In the second quarter, I think, you know, the performance has been pretty good for processed food.
We have to think about the commodity price inflation, but it is now, you know, averaging down. In the first quarter call, in your second quarter outlook, you've also put in these elements. You know, I didn't see any additional pricing actions in the third quarter. Whether if it's Korea overseas, I would like to know whether you are planning any additional pricing actions in the remaining quarters. If so, I would like to know where the highest potential for pricing action would be among the regions.
For overseas, you mentioned that there has been a lot of increase in operating profits. There has been, you know, increase in commodity as well as labor and transportation cost increase.
We have been working very hard to improve productivity, and we've also made sure that we had efficient advertising and strategic allocation of resource, and that had led to increase in profitability. We have substantially lowered promotion, but we are still seeing very robust sales growth. For CJ Foods in the US, a lot of the promotions in Costco, such as MVM, there had been a lot of reliance on that. In the first half, we have lowered such promotion, but nevertheless, we have seen increase in regular sales with better profitability. We feel that there is, you know, robust growth in our products as well as for our brand awareness.
In terms of the dynamics between price and volume, for the U.S., for B2C, in terms of dollar, there has been 17% growth, and about 20% came from increase in volume, and the remaining 80% came from pricing actions. As for B2B, in terms of dollar, it grew 27% and about 30%, slightly over 30% came from increase in volume, and the remaining from pricing actions. As for China and Japan, we didn't have a big pricing action, you know, so most of the increase came from increase in volume. As per your question, I mean, as for your comment that there is increasing cost pressure from commodity inflation.
We have been making diverse efforts such as cost saving, and in inevitable cases, we took pricing actions to offset such cost pressures. In the first half, if you think about, for the expected input costs throughout the year, we took that into account, and we have incorporated that into pricing actions. We've took revisions along the way, and that had been reflected in the numbers. In the second half of the year, of course, you know, there could be higher cost pressure than expected, so we would have to see. To a certain extent, most of the key increases have already been taken into account in the first half of the year. There would be some products where we would see higher labor costs.
Of course, if that's the case, there could be additional pricing actions in the second half of the year. In terms of regions, for Korea and the U.S., there is relatively high cost pressures for those two regions. For China and Japan, the cost pressure is not as high. For these regions, we feel that the pricing actions would be rather partial compared to U.S., to the U.S. and Korea.
Just one reminder is that when you ask questions, because we have Korean to English simultaneous interpretation, please pace yourself. That would be very helpful in providing better communication. Next question, please. We have the next question from Ms. [Kim Mi Hyun] of Morgan Stanley.
Thank you. I have three questions. First is, excluding Schwan's, CJ America has shown substantial growth from the end of last year.
In terms of expanding our facings in stores, we feel that there would be a lot of, you know, internal initiatives as well, leading to stronger growth in sales. I would like you to elaborate on that. Second, in bio, it feels like there is a lot. You mentioned there's a lot of fundamental changes taking place in bio. Right now, your margin is very good in bio. I would like to know how much this is. How long this is going to be sustainable?
Along with the commodity cycle, if we think in line with the commodity cycle, our peak, the peak margin, I feel that this is the peak margin. I would like to know, you know, how much fall we should anticipate or what kind of direction it's going to take in the future. Finally, for Selecta, as mentioned in the previous disclosure, and I know that you're continuing your investment in Brazil, so it may not be relevant to Selecta, but still this is about Brazil. My question is that, you know, Selecta's business, both in terms of sales and operating profits, it has seen substantial improvement. In the long run, I would like to know what kind of strategic significance Selecta would have to CJ CheilJedang's overall business.
As for CJ Foods America, in the first and second quarter, the sales growth in the first half of the year has been very robust, like you mentioned. If I tell you about the drivers in terms of product, CJ Foods, we have this thing called GSP or Global Strategic Products. We are putting a lot of focus on GSPs. If you think about...
I mean, specifically these are, for mandu chicken and processed rice, we are seeing extremely high growth. For the past two-three years, we have accumulated, capacities expanded, and we have also expanded across channels as well. That was one of the key drivers. At CJ Foods, we are now focusing on. We have seen strong sales growth in Costco. As mentioned during the presentation, in the past at Costco, we relied a lot on promotion schemes such as MVM. This is basically providing vouchers to customers. That helped us raise awareness of mandu at the beginning. As we rode through the era of pandemic, along with MVM, we have also been able to increase sales in regular channels as well. Second driver would be the ambient grocery channel.
As mentioned earlier, we have been expanding distribution of processed rice as well as noodles and seaweed as well as K-sauce. We have seen strong growth across all these products. Along with our performance in Costco and growth, we have seen growth across all different channels, including Costco, grocery, as well as ethnic. In the second half of the year, we aren't expecting expanded sales as well. As for the BIO's margin, in the short term for the third quarter, we feel that's going to be similar to the same period last year. In the long run, we feel that we would be able to maintain a two-digit OPM. That would be our goal. Just to elaborate on this, there has been decline in grain prices.
The prices for lysine and feed additives are weak for the time being, but for the U.S., Brazil, and European Union as well as China, we have very strong market presence there. We would be expanding sales there. By differentiating the formats, we would be minimizing the impact of fluctuations in the market. The pandemic has slowed down in China. The lockdown has hopefully slowed down in China. We would be continuing growth of specialty products such as TasteNrich so that we are expecting similar operating margin in the third quarter as well. Compared to the past year, of course, you know that trend of increase is going to continue. In the long term, as mentioned earlier, we are expecting about two-digit trend for operating profit margin. On to Selecta business.
After acquiring CJ Selecta, we have been looking into non-GM soybean sourcing. We had secured differentiated competitiveness there. In our existing feed additive business, we have our existing sales competency. As a result, we have been able to raise their profitability. Based on such differentiated competitiveness and market presence, we will continue to leverage CJ Selecta as a cash cow for our company. As for soybean oil business, based on our existing sales competency, we would like to further differentiate ourselves so that CJ Selecta can be nurtured as a key element of CJ's business. We'll take the next question.
Next question is coming from Kiwoom Securities, Mr. Park Sangjun.
Thank you for the opportunity. I have one question. If you look at the sales of processed food in South Korea, do we see that sales has declined from the past and also HMR category sales has been weakened. How do you see the potential for growth for processed food in Korea? What's your target?
For Q2. We see how we're entering into the endemic era, so we saw a decline in at-home consumption. Still out-of-home portfolio, we're expanding our out-of-home portfolio, so we think that we can respond to consumption reasonably. Hetbahn , we have to improve our penetration, but our goal. Our goal is to reach and maintain this double digit growth momentum. Next question.
The next question is by Mr. [Kim Jong-wook] from Meritz Securities. Please go ahead.
Thank you for the opportunity. I have three questions. First is regarding Bio. Just like you did for food business, could you actually elaborate on the P&Q factor for sales growth or by category and by product? Could you elaborate on profitability? The second question is, more recently, we see that spot prices are coming down for raw ingredients. If that could be reflected at the end of your performance, then where and when do you see that coming? Third is regarding plant-based. What do you see as the areas of synergy with your existing businesses? I think overseas markets are important for you because I see that the numbers in Korea are still small for a plant-based business.
On your first question, regarding P&Q factors for BIO sales growth, most of growth for the last quarter has come from pricing.
Mostly amino acids for feeds and contribution to profitability, lysine, Selecta and specialty products and nucleotides and then descending order contributed to profitability. Next is price trends for ingredients. Right now, because of the Ukraine crisis will continue. The futures price remained up till June, but it declined after the June timing. On refined sugar, because of oil price increase and also Brazil's manufacturing land development has declined. Then also we see that grain prices will improve, but still there are some climate-related risks in the United States.
Because of, there's an FX impact, but we will still have to see and monitor whether input costs could actually come down. If prices are stabilized continuously, the actual prices are reflected into actual input cost with the lead time of six months. We believe that the impact will show on our performance by fourth quarter 2023. You asked a question relating to areas of synergy with our plant-based business with existing businesses. Plant-based products use soybeans and then grains, and then we do have a competency in food ingredients. We believe that is one synergy. Also for flavor, we can use Bio's TasteNrich.
There's, you know, a potential for group-wide synergy, for example, with CJ Freshway for B2B entry. For overseas markets, US and Europe are our key priority markets. We do have infrastructure in Europe, so we are going to go for a key flavor, which we'll be good at. That's our current direction set for plant-based business. The last question has been answered by Mr. [Jeong Hyun-hak] from plant-based team. We'll take one more question.
The next question is from Ms. Christine Cho of Goldman Sachs.
Thank you for the opportunity. As you mentioned during your presentation in bio, you mentioned that through diverse efforts you have been able to improve the margin. For Feed&Care, I would like to know whether there are similar level of efforts taking place to improve margin. I would like to know how you would see the long-term profit margin of Feed&Care.
Here's my answer to your question. In the second quarter, if you look at Feed & Care as a whole, this is a peak season for input costs. From August and September, if you look at feed, we are expecting significant improvement in profitability. There are some, we have continuously taken pricing actions in the first two quarters, but we would be having additional pricing actions in the remaining quarters. We would see improvement in the price spread. As for livestock, the hog price in Vietnam, it was the lowest in the fourth quarter of last year, and it has been climbing back up. In the third quarter, whether it be supply side or the average sales price, there has been declining supply because of spread of disease.
They have impacted prices, and that's going to take material impact in the third quarter. Compared to the second quarter, in the third quarter we would see certain improvement in profitability. We'll now wrap up today's call. I'd like to thank you everyone for your time.