Average 20% Growth Over 4 Years... Market Size Expected to Surpass 100 Billion Won
New Concept Hot Dogs to Captivate Consumer Tastes Flood the Market
[Asia Economy Reporter Lee Seon-ae] Competition in the hot dog market is fierce. While CJ CheilJedang continues its dominance, Pulmuone, Shinsegae Food, and Lotte Food are accelerating their efforts with aggressive marketing.
According to Nielsen Korea on the 5th, the domestic frozen hot dog market size has steadily grown from 39.5 billion KRW in 2016, 53.1 billion KRW in 2017, 59.4 billion KRW in 2018, to 67.6 billion KRW last year. This year, thanks to the expanded distribution of air fryers, it is expected to exceed 80 billion KRW. The industry anticipates that the demand for snacks at home will increase due to the untact (contactless) consumption trend, making growth to 100 billion KRW possible.
◆The first crispy hot dog...Gourmet leads the market= Accordingly, fierce marketing battles are underway among related companies. The market is led by CJ CheilJedang. CJ CheilJedang’s 'Gourmet Hot Dog' captured a 20% market share in its launch year of 2016, entered 30% the following year, and surpassed 40% this year. In particular, in April, it recorded an all-time high market share of 45.7%, widening the gap with second-place Pulmuone by more than 20%, establishing an unrivaled number one position. The secret lies in the taste and quality of the handmade-style hot dog enjoyed in dining out. The appearance of the crispy and chewy 'Gourmet Hot Dog' was fresh in the frozen hot dog market, which had only soft bread-wrapped sausages.
The product portfolio has also been continuously expanded to satisfy consumer tastes. Last year, CJ CheilJedang launched 'Gourmet Big Crispy Hot Dog' and 'Gourmet Potato Cheese Hot Dog,' increasing the lineup to four types alongside the existing 'Gourmet Crispy Hot Dog' and 'Gourmet Cheese Crispy Hot Dog.'
CJ CheilJedang developed a dedicated cooking method for air fryers to expand market share and quickly renewed the packaging by adding air fryer cooking instructions and emblems on the front and back of the product packaging after development.
CJ CheilJedang plans to continue aggressive marketing. With the upcoming summer vacation in July and August, it expects the proportion of 30-40-year-old housewives purchasing Gourmet Hot Dogs as snacks for their children to increase further, focusing on large mart tasting events, online special promotions, and various marketing activities. Sales recorded 7 billion KRW in the launch year, grew more than sixfold to about 45 billion KRW last year, and the target for this year is set at over 50 billion KRW.
A CJ CheilJedang official said, "Gourmet Hot Dog, created based on CJ CheilJedang’s frozen food R&D capabilities and know-how, has become a hit product enjoyed by various age groups," adding, "We will nurture it as a representative brand and product leading the trend of 'bringing dining out menus home'."
◆Fierce ranking battle...Competitiveness through 'product differentiation'= The battle for 2nd to 4th place rankings is intense. Last year, Lotte Food was 3rd and Shinsegae Food 4th, but the order changed in the first quarter of this year. Based on first-quarter estimates, the market shares are CJ CheilJedang 41.5%, Pulmuone 21.5%, Shinsegae Food 7.5%, and Lotte Food 7%.
Shinsegae Food’s 'Olban Chal Hot Dog,' launched in 2018, has surpassed 15 million units in cumulative sales. Especially from January to April, monthly sales of 'Olban Chal Hot Dog' more than doubled (147%) compared to the same period last year, ranking first among about 10 types of frozen hot dogs sold at Emart Traders.
A Shinsegae Food official said, "It satisfies three factors simultaneously: restaurant-level taste, easy cooking, and reasonable price, gaining consumer approval," and analyzed, "The recent impact of COVID-19 has also influenced the increase in sales, as consumers prefer frozen hot dogs that can be safely and conveniently cooked in a microwave without separate preparation."
Expanding the product lineup with new products emphasizing differentiated taste and texture to target diverse consumers was also cited as a reason. Following the first hot dog product 'Olban Chal Hot Dog' in 2018, Shinsegae Food introduced last year the 'Olban Mozzarella Cheddar Chal Hot Dog,' which offers the flavor of two types of cheese?mozzarella and cheddar string?inside the hot dog bun, and the 'Olban Crunchy Chal Hot Dog,' which has a crispy bread crumb coating on the dough surface and a juicy sausage inside, targeting cheese enthusiasts and traditional hot dog fans.
A Shinsegae Food official said, "We will continue to introduce various frozen hot dog new products reflecting customer preferences and strengthen marketing activities."
Lotte Food also plans to increase market share by preparing new concept products. Lotte Food’s 'La Cuisine Cube Potato Hot Dog,' launched in July last year, sold 1 million units within seven months and gained popularity. This product uses fresh Idaho potatoes from the U.S., which have low moisture content and high solid content, offering a savory taste with a crispy exterior and soft interior texture. The 'La Cuisine Milk Hot Dog,' relaunched last year, is also popular due to the recently increased interest in health concepts. In December last year, Lotte Food expanded the category with mini hot dogs aimed at bite-sized snacks, further expanding the health concept hot dog market.
Pulmuone is also focusing on product diversification, following the launch of 'Saenggadeuk Mozzarella Hot Dog' in June 2017 with the release of 'Saenggadeuk Olbareun Hot Dog' containing vegetables. An industry insider said, "As various modifiers such as cube potato, potato, crispy, mozzarella, chal, milk, olbareun, and mini have been attached to hot dogs launched in the past 3-4 years, it proves that new concept product launches are active," adding, "With the expansion of air fryers and untact trends, the hot dog market is expected to continue growing, making competition for market dominance fierce."
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