Staff Writer
Feb 14, 2020

The success story behind LOTTE's food business

A ‘Big-Brand’ marketing strategy, astute localisation and a real-time market monitoring system combine to make the success story that is LOTTE’s food business.

The success story behind LOTTE's food business
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As covered in our previous post, the LOTTE Group is mainly divided into four sectors (Food, Retail, Chemical, and Tourism/Service). Among these four, LOTTE Food is perhaps most well-known for it is confectionary and beverages but it is boundaries expand far beyond the two.

While the group’s Food Business initially started in 1967 as LOTTE Confectionery, it has since grown into a leading food company with a diversified product range to include confectionery, beverages, liquor, food materials and dining. Represented by its best-selling products such as LOTTE Choco Pie and PEPERO, LOTTE Food Business Unit is composed of industry leading sub units, including LOTTE Confectionery, LOTTE Chilsung Beverages, LOTTE GRS (Global Restaurant Service), LOTTE Food, LOTTE Nestle, LOTTE Asahi Liquor and LOTTE R&D Center—the latter being the company’s research and development unit for new food products.

One key element to the company’s long-standing success is perhaps it doesn’t only aspire to provide well-received products, it also aims to pioneer the culture of consumption itself. 

Consumers who have grown up on—and with—LOTTE confectionery products and franchises have fond memories deeply etched into their conscience which is then passed onto their children. This culture has allowed LOTTE to hold a place in every consumer’s heart as a Lifetime Friend. In Asia specifically, LOTTE is more than a product or a brand. So much so that consumers in Korea have dubbed November 11th ‘PEPERO Day’ as the ‘11’ in the date resembles two PEPERO sticks. In some countries, Xylitol Gum, PEPERO, Ghana Chocolate, Chilsung Cider and other LOTTE products are more than brands--they’ve become synonymous with their product groups. 

One key element to the company’s long-standing success is perhaps it doesn’t only aspire to provide well-received products, it also aims to pioneer the culture of consumption itself

Global Expansion

In recent years, the company has increasingly looked ‘outwards’ to make a mark in the global F&B scene. Through its M&A strategy based off of its success in the Asian market, LOTTE is now a force in Russia, India, Philippines and Europe. In Vietnam, by successfully developing various menus tailored to the local taste bud, LOTTE has acquired more stores than global fast food brands such as McDonald’s and KFC. 

LOTTE’s success story of branching out into the global chocolate market through the acquisition of the Belgian Chocolatier premium brand Guylian is well known, but it’s far from the company’s only acquisition. In 2014, it created a joint venture with Nestle, the number one food conglomerate, and in 2017, it acquired Havmor, the most popular ice-cream brand in India. LOTTE’s recent acquisitions include the ‘Mayson’, Myanmar’s number one confectionery conglomerate. 

Beyond its success in East Asia, LOTTE is rapidly growing in value by becoming a global brand trusted and loved by the markets it is in.

With Smart Data System, LOTTE’s real-time based food market monitoring system, useful consumer data are generated, which are turned into insights, eventually finding their way into what consumers see on supermarket shelves

Research & Development, Vision for the Future

To create mega brands such as PEPERO and Xylitol Gum, LOTTE has been relentless in the pursuit of research and development excellence. 

With Smart Data System, LOTTE’s real-time based food market monitoring system, useful consumer data are generated, which are turned into insights, eventually finding their way into what consumers see on supermarket shelves. In Korea, the trend analysis AI system LCIA has successfully delivered satisfactory products such as PEPERO CACAO NIPS, PEPERO NUDE CREAM CHEESE. 

Meanwhile, the LOTTE R&D center is leading food culture with new product development, food tech application, as well as safety measures to give consumers a peace of mind. 

The ever changing global food industry is a challenge for all F&B companies, big or small, but LOTTE seems well-poised to face that challenge head onby staying true to its philosophy: to continue to provide tasty, safe and healthy foods to its consumers. 

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