Korean native burger Lotteria is busy making final preparations for its entry into the 'home of burgers,' the United States, this month. The U.S. is the birthplace of famous burger brands such as McDonald's, Burger King, Wendy's, In-N-Out, Shake Shack, and Five Guys. Lotteria aims to compete in the local market with its 'Korean style.'
According to industry sources on the 7th, Lotteria will open its first store on the 14th in Fullerton, Los Angeles, USA. This location was originally occupied by the American chicken franchise KFC. Before the official opening, a soft opening event will be held from the 11th to the 13th.
Lotteria GRS has been preparing to establish a corporation in California by the first half of 2024 and has been getting ready to open its first store since early this year. The main menu items include bulgogi burgers and shrimp burgers. The plan is to establish a presence with 'Korean taste,' capitalizing on the popularity of K culture and K food in the United States.
◇ The bulgogi burger stepping into the hometown of the Big Mac
Lotteria's weapon is its identity as 'K.' The plan is to replicate the Korean Lotteria identity in the U.S. through the representative menu items such as bulgogi burgers, shrimp burgers, and Jeonju bibim rice burgers, as well as the brand image and interior design.
A Lotteria GRS official noted, "If American burgers are salty and deep in flavor, Korean burgers have a strong sauce taste difference. We received positive feedback from local consumers after attending the Chicago Restaurant Expo twice. We will differentiate ourselves in the local market by promoting K burgers."
Lotteria was launched in the domestic market in 1979. It was first established in Tokyo by Japan's Lotte Holdings in 1972 and entered Korea in 1979 through a Korean-Japanese joint venture. After Korean Lotteria acquired the management rights from Japanese Lotteria in 2004, the two operated as separate companies. This led to divided opinions on whether Lotteria is a Korean or Japanese brand.
However, since the Japanese Lotteria was sold to Zensho Holdings in 2023 and the brand name changed to 'Jetaria,' Lotteria is now recognized as a distinct domestic Korean burger brand.
In reality, Lotteria has secured its identity as a 'native burger' by introducing menu items tailored to Korean tastes, such as the bulgogi burger, shrimp burger, and rice burger. The bulgogi burger, which was released in September 1992, has sold over 1 billion units and maintains its position as the top-selling burger at Lotteria.
In addition, unique menu items such as squid burgers, ramen burgers, and king pork cutlet burgers have garnered attention. Cartoonist Lee Mal-yeon noted in his YouTube content (Chimchak Man) that Lotteria's flexibility and 100% transformation capability is a strong point.
Industry perspectives on K burgers' entry into the U.S. vary. There is a precedent where Mom's Touch, which entered the U.S. in 2017, failed to gain a foothold in the local market and withdrew from the business last year. However, interest in K food has been growing recently in the U.S., and several Korean food and beverage brands like Tous les Jours, Paris Baguette, BBQ, and Noted have entered and achieved success, raising interest in how Lotteria will perform.
◇ Lotteria GRS expected to surpass 1 trillion won in revenue this year... Accelerating global expansion
Due to market saturation in the burger industry and the impact of COVID-19, Lotteria GRS's revenue, which exceeded 1 trillion won in 2017, decreased to 683.1 billion won in 2020. The company has shown a steady recovery, achieving a revenue of 995.4 billion won on a consolidated basis last year. This year, the prevailing outlook is that a return to the '1 trillion club' is possible after eight years.
Eighty percent of the revenue comes from Lotteria. Lotteria operates over 1,300 stores in the country, with 90% being franchise stores. The company has determined that domestic growth has reached its limit structurally and is focusing on nurturing new restaurant brands and expanding concession businesses, which involve operating and managing food and beverage brands in multi-use facilities such as airports.
Lotteria's overseas expansion is also accelerating. Lotteria currently operates over 320 stores in countries including Vietnam, Myanmar, Laos, and Mongolia, where it has secured the number one position in the industry. The Lotteria Vietnam subsidiary, which was previously owned by LOTTE Corporation, has recently unified ownership and management by acquiring 100% equity. The expansion into Malaysia and Singapore has also been confirmed, alongside the store opening in the U.S. this month.
The global business is reportedly being directly managed by Shin Yoo-yeol, vice president and head of future growth at LOTTE Corporation, who is the eldest son of Shin Dong-bin, the chairman of the Lotte Group. Vice President Shin also attended the partnership contract signing ceremony for the local entry of Lotteria with Malaysia's Serai Group on the 5th at Lotte World Tower in Jamsil. Both parties agreed to open the first store in Malaysia by the end of this year and plan to establish 30 stores in Malaysia within five years.
An official from the Lotte Group said, "Since Vice President Shin is in charge of the group's global business, he is adding significance by participating in overseas expansions or inter-country contract signing issues."
Lotteria GRS aims to focus on securing brand recognition in the local market through its first store in the U.S. An official from the company stated, "The entry of Korean-style burgers into the U.S. mainland is very meaningful for the domestic franchise industry," and added, "The history of 'K burgers entering the U.S.' will have a positive impact on future expansions into other overseas countries."