Lotte Group aims to grow Pepero biscuits into $746 mn brand

Shin Dong-bin, Chairman of Lotte (second from the right), inspecting the Gillian production plant in Sint-Niklaas, Belgium. [Courtesy of Lotte Group]

Lotte Group announced plans to nurture its popular snack Pepero into one of the world’s top 10 brands by 2035 by maximizing synergy between its South Korean and Japanese operations.

According to Lotte Group on Sunday, Chairman Shin Dong-bin presided over a meeting in Warsaw, Poland, on September 3. There, he urged executives from both Korea and Japan to collaborate more closely to strengthen their position in the global market.

The decision to strengthen collaboration between Lotte’s Korean and Japanese operations comes in response to growing uncertainty in the global economic environment.

Rising inflation and supply chain disruptions have made it essential for food companies to adapt quickly.

For example, this year, Lotte Wellfood raised the prices of 17 products, including Ghana Chocolate, by an average of 12 percent due to the sharp increase in cocoa prices.

By jointly procuring materials and launching coordinated global marketing campaigns, Lotte aims to reduce costs and boost profitability.

A key focus of the latest meeting was the plan to elevate Pepero, the group’s flagship product, into a global mega-brand with annual sales of 1 trillion won ($746 million).

Lotte’s plan is to position Pepero as a top 10 global brand and the number one confectionery brand in Asia by 2035. To achieve this, Lotte will increase market share in countries where it already has a presence, such as Vietnam and India, while jointly exploring new high-potential markets.

Pepero is currently sold in over 50 countries, including the U.S., Southeast Asia, and the Middle East, with total sales reaching about 200 billion won.

Last year, international sales of Pepero totaled about 54 billion won, up 90 percent from 2020, when Lotte launched its first global marketing campaign for Pepero Day.

In the first half of this year, Pepero’s exports reached 32.5 billion won, up 30 percent from the same period last year, surpassing domestic sales for the first time.

To support its global ambitions, Lotte is investing about 33 billion won in its first overseas Pepero production facility in Haryana, India, which is expected to begin operations in the second half of next year.

In addition to chairing the meeting, Shin toured Lotte’s European production facilities to explore ways to maximize the synergy between the two operations.

Shin and other senior Lotte executives visited the Guylian factory in Belgium and the Wedel plant in Poland to discuss ways to enhance production efficiency and competitiveness.

Lotte Wellfood acquired Guylian, one of the world’s top three chocolate brands, in 2008, while Japan’s Lotte took over Poland’s Wedel in 2010.

In the United Kingdom, Shin met with world-renowned architect and designer Thomas Heatherwick to discuss design strategies.

Accompanying Shin on this trip were key Lotte executives from both Korea and Japan, including Lee Young-goo, head of Lotte’s food division, Lee Chang-yeop, CEO of Lotte Wellfood, Shin Yoo-yeol, head of Lotte Corporation’s Future Growth Office, and Kenichi Tamatsuka, CEO of Lotte Holdings.