The COVID-19 pandemic over the last 2 years has led to enormous changes, not only in the retail environment, but also in shoppers’ behaviours and attitude towards brands.
Moreover, as social distancing has been lifted recently, the domestic market can expect more diverse and new competition, with changes in consumer purchasing behaviour that are different from those before and throughout the pandemic period. By dealing with these changes in the market, we can expect to see better performance during this period of social upheaval.
In 2021, when the impact of COVID-19 was somewhat decreasing, there was no change in Top Rank compared to 2020, but Ottogi Ramen’s CRP decrease was relatively large. On the other hand, processed food brands Chungjungone and Bibigo, which are ranked in Top 2 and Top 6 respectively, have shown positive performance as the influence of exogenous variables has decreased, but the penetration, as well as the purchase frequency, have increased stably.
In addition, due to the increased interest in health after the COVID-19 issue, dairy brands, Seoul Milk and Masinnen Milk showed an increase in CRP due to influx of buyers. Will, however, showed a significant decrease in CRP due to a decline in purchase frequency, even though it was a dairy product. It’s clear there are vast differences in consumers’ purchasing choices, even within the same vertical of health-related food products.
Since the appearance of COVID-19 in 2020, Korean consumers’ interest in health has grown, which has led to the growth of health supplements and expansion into various categories, including health-related functions. Many brands approached personalized markets by launching new products such as protein drinks, vegetable drinks, vitamin drinks, lactic acid bacteria drinks, and sugar-free/low-calorie drinks. In terms of CRP standards, it’s easy to observe the recent rapid growth of brands centered on yogurts, such as Danone, Maeilbio, Denmark, and Bulgaris. Pepsi and Coca-Cola, which have appealed to consumers via their zero-sugar or zero-calorie products, are also in the top growing brands.
In addition, snack brands (Pepero, Ace) that used to be centered in Out of Home market also performed well in the household market during the COVID era. Among processed food brands, Bibigo showed positive results with an increase in CRP and a stable penetration, and Yangban showed achievement by expanding to HMR apart from Gim (roasted seaweed).
There is no change in ranking within the Top 5 in Beverages, but Maxim, which benefited from the growth of the household market, along with working from home in the early days of the pandemic, is now showing a decrease in CRP. In addition, Coca-Cola, focusing on carbonated beverages, maintained its Top 1 position as the penetration and frequency increased together, yet Chilsung Cider’s CRP decreased noticeably within the Top 5 brands. In preparation for returning to a normal lifestyle after COVID-19, it is time to think about how to gain consumers’ purchases.
Seoul Milk maintains its strong CRP Top 1 position in the Milk and Dairy Substitutes market, while maintaining a steady penetration and purchase frequency. While the Top 3 position has not changed, Denmark entered the Top 5, rising 2 rankings through a CRP increase. On the other hand, Sowanamoo’s competitiveness was weakened as its penetration and purchase frequency both decreased, and subsequently it fell by one place.
There was no change in ranking within the Top 5 in Food in 2021, when the influence of COVID-19 had relatively decreased. However, Ottogi, which ranks first, showed decrease in both buyers and frequency compared to 2020, whereas CRP of Chungjungone and Bibigo increased. And, in spite of disappearing exogenous variables, we judge that Chungjungone and Bibigo have performed well in the market to some extent.
Overall, the home care market has grown based on paper products and kitchen detergents through the increased time spent in households due to the pandemic. Products such as laundry detergent and fabric softener are recovering again as they have returned to normal purchasing behaviour from 2021. In the midst of these changes, Saffron’s CRP, which had a positive performance in fabric softener within Top 5, increased by one ranking, while Downy’s CRP decreased by one ranking.
Kleannara showed an upsurge due to panic-buying of paper products in the early days of COVID-19. But after 2021, due to stocks within homes, and no additional subscription momentum, its CRP declined substantially, but the ranking did not change significantly.
Miseenscene placed in the Top 5 with a rise of three places in the rankings. Among the Top 3 brands with no change in the ranking, CRP of feminine product brand, Good Feel, and personal care product brand, Lg Body Care decreased compared to 2020 due to the impact of COVID-19, such as many restrictions on outdoor activities, and we saw a tendency of buyer attrition.
CJ CheilJedang was established in 1953, with its core business areas ranging from Food & Food services such as sales and production of sugar, flours, cooking oil, seasoning, Jang (soy sauce, red chili paste, etc), processed meat, fresh food, processed rice, frozen food, HMR, and health functional food to Bio such as sales and production in Amino Acids and Animal Nutrition. The company is also widely recognized as the pioneer of the processed rice market in Korea.
CJ CheilJedang continues to hold its position as the market leader of the HMR. Processed rice, canned ham, frozen food, noodle, and Korean soup&stew were the top 5 categories that showed the highest growth rates in the recent year, also a driving force for CJ CheilJedang to maintain its No.1 position in the HMR market.
The main reason for the #1 CRP rank for CJ CheilJedang is the buyer pool which amounts up to 98.9%. This was mainly attributable to the diversified portfolio it offers to consumers. The company continuously strives to lead the HMR market by launching new products that reflect the market trend. As of the year 2021, the company launched more than 150 products. New product development mainly evolved around HMR meals turning more nutritious, convenient and diversified.
An outbreak of COVID 19 accelerated consumers’ interest in health, and as consumers entered the With-COVID era, time spent at home decreased, which increased the demand for a more convenient meal. Also, home-cooked meal in Korea is not only limited to Korean dishes anymore, but also Western, Chinese, and other authentic cuisines. CJ CheilJedang launched products that reflect this trend. One example would be the “Gourmet” brand. Providing convenient meals with the Chef’s know-how and recipes from all over the world, “Gourmet” strives to offer convenience and a special experience of gourmandize to consumers. As of the year 2021, “Gourmet” took further steps to expand its product line to Chinese cuisine following its popularity of Western cuisine. By offering a wide arrange of Chinese cuisine product lines, “Gourmet” had a positive performance, especially with its Chinese fried food such as Crispy Sweet and Sour Pork and Kkanpunggi.
Distribution-wise, CJ CheilJedang exhibited a presence by placing more products and focusing on e-commerce platforms during the COVID era. The company particularly focused on e-commerce platform that offers fast delivery service such as Coupang, Market Kurly, and SSG.COM.
In conclusion, CJ CheilJedang is the company we have chosen to watch out for, as they continuously innovate themselves to be keen on the market trend and develop the right direction to gain ground in the market.
1. What do you think differentiates your company in the face of fierce competition? Since its foundation, CJ CheilJedang has been leading the Korean food industry for the last 70 years by offering innovative products and brands tailored to customer lifestyles and needs. Starting with Korea’s first sugar production, we always have been at the forefront of challenges and innovation. Among many beloved brands, our portfolio includes the broth powder brand Dasida, which has revolutionized the culinary landscape, the instant rice brand Hetbahn that opened the doors for HMR, as well as bibigo Mandu which brought about a paradigm shift in the dumpling category. This was possible because of CJ CheilJedang’s Only One culture, where we challenge ourselves to be the best and constantly ponder to discover new, different paths. As a leading food company in Korea, various capabilities including top-tier R&D, production infrastructure built around the world, and trend-leading power developed through steady research by specialized organizations played a key role in allowing the company to always pioneer the market.
2. Where do you see your company’s best growth opportunities? (location/nation, category, strategy) For a long time, CJ CheilJedang has been working on introducing authentic Korean food and taste to the world. With the recent rise of K-Culture and wellness trends around the world, the growth opportunities for K-Food are increasing. Therefore, CJ CheilJedang is aspiring to expand in the global market with the vision of becoming a global food corporation that enriches the lives of people around the world, going beyond Korea’s best food company. To reach this goal, we selected a set of global strategic products to foster in the global market such as Mandu, chicken, processed rice, kimchi, and Korean sauce with a focus on Bibigo, a global Korean food brand. Moreover, we have been investing in global expansion through global marketing, R&D, and renovating production infrastructure.
3. What was the biggest achievement of your company in 2021? Please tell us about your success story this year. 2021 was a successful year in which CJ CheilJedang introduced our signature brand bibigo to global customers. bibigo is loved by people around the world as a representative K-Food brand that adds modern values to the unique tradition of Korean dishes. Led by our core product Mandu, other key strategic products such as chicken and instant rice entered the global market and penetration increased. After bibigo Mandu accomplished global sales of 1 trillion won in 2020, bibigo has grown into a mega-brand with global sales of 2 trillion won in 2021. Our growth in the global market is driven by two factors. First, among a variety of Korean dishes, we strategically chose a set of products and focused on them. Second, we adopted localization strategies that considered each country’s food culture and consumer trends. In addition, bibigo is expanding its activities to promote K-Lifestyle and the brand’s defining element of ‘devotion’ to Korean cuisine to the world by officially sponsoring THE CJ CUP, part of the world-class PGA tour, and signing a sponsorship agreement with the prestigious NBA team, LA Lakers, as its first global marketing partner in 2021.
4. What do you consider important for a brand to grow in the FMCG market in Korea? The Korean FMCG market is changing from competition within the processed foods category to competition including the restaurant industry, delivery and take-away.
The rapid growth of the online market has led to insurgent brands having growing influence on each category, which has resulted in fierce competition in terms of brand building, requiring large resource investments and new ways of branding to differentiate the brand. For continued growth in this market environment, it is most important for brands to develop innovative products that can support sharp positioning. Also, forming an emotional connection with customers is crucial for transforming that innovation into practical consumer value.
When building an emotional connection with consumers the focus lies not only on traditional media but on creating a brand experience by following the target consumer’s journey through digital, OOH, consumer events, etc. Through that we are aiming to grow our brand by turning customers that are connected to our brand into brand ambassadors.
5. What consumer behavior was the most noticeable to you in the last 5 years? In 2017, CJ CheilJedang took the lead and pioneered the HMR market in Korea after much preparation. Consumers responded positively to its excellent convenience, and with a large influx of new customers, the HMR penetration in Korea increased dramatically. The fast growth of this industry owes to the so-called cost-benefit ratio beyond cost-effectiveness, that is, the taste quality exceeded customer expectations. Since the COVID-19 outbreak, consumer behaviors towards preparing and enjoying meals are changing quickly. The eating behavior is shifting from the conventional preparation of multiple dishes to a simple and delicious one-plate meal. The traditional eating situation, three meals a day, is gradually transforming into snacking forms that combine main meals and snacks. In order to meet these fragmentizing consumer needs, CJ CheilJedang is paying attention to menu diversity. Using the brand , we have extended the frozen HMR lineup. We are also expanding our sphere within consumer meals by building portfolios not only for main meals but also for side dishes like soup, chicken, and cutlets.
6. What would be the most noteworthy consumer behavior in the next 5 years? The 4 consumer keywords we are focusing on are Less effort, Individualization, Food Tech, and ESG. Under the prolonged influence of COVID-19, consumers now have a stronger need for efficient meal preparation through various alternatives rather than cooking for themselves. Therefore, products and services that provide convenience while offering diversified products in line with each personalized trend are expected to attract attention. In addition, different companies are increasing their investments in food and materials based on eco-friendly technology to secure new growth engines for the future. This implies there will be higher consumer demand for sustainable future/ethical consumption. Consequently, our company launched ‘bibigo Plantable Mandu’, a 100% plant-based, vegan certified product. This year, we are making various efforts to respond to changing consumer trends by expanding such trend-related lineups and expanding them to the global market.
