LOTTE Wellfood is showcasing business activities that look different from before. Unlike the past, when it managed conservatively with no big changes and did things the same way, it is actively expanding overseas and rolling out various kinds of marketing. In that process, the product that delivered good results is Kancho, which marks its 40th anniversary this year.
According to related industries on the 12th, Kancho's sales volume over the past month increased about threefold from the same period a year earlier. The "Find the name" event, which randomly engraved names on individual cookies and had people search for the names of their loved ones, proved effective. A total of 504 names are engraved on individual Kancho cookies, and as short-form videos searching for one's own name were posted on social networking services (SNS), word of mouth spread.
According to the three convenience store chains (GS25, CU, 7-Eleven), the average daily sales of Kancho at GS25 and CU roughly tripled from a year earlier, while 7-Eleven saw a 1.5-fold increase. LOTTE Wellfood is also running its production line more extensively, from two days a week to six, as inventory is being depleted faster than usual.
It is also taking a more aggressive approach to overseas marketing. LOTTE Wellfood took part in Anuga, the world food trade fair in Germany held on the 4th, to promote Pepero and other products. This is the first time LOTTE Wellfood has participated in Anuga. The move reflects its intent to promote LOTTE Wellfood snacks in overseas markets.
Not only marketing at home and abroad but also the management stance has changed somewhat. LOTTE Wellfood implemented its first voluntary retirement program since its founding in April. Although the annual salary is somewhat lower, the length of service is longer than at competing food companies, so the perception that "LOTTE Wellfood is a stable workplace" had been strong. Now LOTTE Wellfood has begun to carry out restructuring to improve expense efficiency. This is also a change that has come from operating the corporations in a different way than transfer.
The shift at LOTTE Wellfood began after Shin Dong-bin, chairman of the Lotte Group, repeatedly stressed the "nurturing of mega brands" at LOTTE Wellfood. In fact, LOTTE Wellfood was not a subsidiary that drew great attention, overshadowed by major affiliates such as Lotte Shopping and LOTTE Chemical. But as the chemicals business struggled and the department store and mart businesses suffered from weak domestic demand, attention shifted to LOTTE Wellfood, which generates stable revenue, leaving it little choice but to change.
A Lotte Group official said, "Starting with the group's management strategy meeting (VCM) in the second half of last year, tough calls for change began to emerge." The meeting discussed topics such as when the most recent case of a new product drawing attention was and what the strengthening strategies are for existing brands.
Shin Dong-bin, chairman of the Lotte Group, also presented "strengthening the brands of core products" as a key task at this year's second-half VCM. In February, Shin visited India for the first time in nine years to inspect a LOTTE Wellfood plant and attended the completion ceremony for the new Havmor Pune plant. After returning from the India trip, he headed straight to the LOTTE Wellfood board of directors. Multiple Lotte Group officials said LOTTE Wellfood is in a situation where it must deliver results under the special attention of the chairman and the holding company.
A LOTTE Wellfood official said, "At first, the attention felt burdensome and bewildering, but as a sense of tension formed within the organization, it is now running with momentum."
Chuseok has passed, and it is now the time to harvest and present the year's results. It also means it is time for LOTTE Wellfood to announce, one by one, what it achieved this year. These days, attention is turning to the results LOTTE Wellfood has achieved over the past busy year and its plans for next year.