Increased Bread Spending in Every Household... Convenience Store Top Two Battle for Premium Bread Market

CU Declares Premium Bread for the First Time in the Industry
GS25 Preparing to Launch in January Next Year
Monthly Average Household Spending on Bread and Rice Cakes
Increased by 58% Over 5 Years as of Q3
December Sees Sharp Rise in Bread Consumers as Meal Replacements

[Asia Economy Reporter Cha Min-young] The two giants of the convenience store industry, GS25 and CU, have launched a direct competition with their own premium bread. As the number of convenience store outlets approaches 50,000 across the top four brands, the need for differentiation from competitors has increased. They are accelerating menu development to capture demand for high-end products, moving away from existing low-priced items.

According to industry sources on the 28th, GS Retail will introduce its own bread brand 'Bredique' in January next year, selling it at convenience store GS25 and supermarket GS The Fresh. Bredique is a brand that embodies the meanings of 'bread,' 'boutique,' and 'unique,' aiming to be a high-quality bakery specialty brand. GS Retail plans to launch more than 50 types of bread segmented into five categories?meal replacements, lunch packs, refrigerated bread, prepared bread, and refrigerated desserts?by the end of March next year.

Taking a step ahead, CU was the first in the industry to challenge premium bread, focusing on 'healthy bread.' They plan to release about 10 differentiated products, including healthy breads such as ciabatta, focaccia, and whole wheat bread, paired with sets of jams and sauces. The first product is 'Chandalf Bread,' which includes two types: herb bread rich in herbal aroma and grain bread containing brown rice, oats, and millet. The set emphasizes a healthy taste and image by including Chandalf jam, a French jam made by simmering 100% fruit without artificial sweeteners.

As bread's status rises, surpassing the traditional staple food of rice, convenience stores have turned their attention to the related market. According to the Household Income and Expenditure Survey by Statistics Korea, the average monthly household expenditure on bread and rice cakes increased by 57.9%, from 19,000 won in 2015 to 30,000 won as of the third quarter of this year. During the same period, consumption of grains including rice rose only 22.2%, from 18,000 won to 22,000 won. At GS25, bread category sales grew at an average annual rate of over 15% from 2015 to 2020, maintaining an upward trend.

Especially with the COVID-19 pandemic increasing the number of customers visiting convenience stores in their local neighborhoods, sales of meal replacement breads surged. According to CU, from the 1st to the 21st of this month, sales of meal replacement bakery items such as sliced bread, morning rolls, and croissants increased by 115.1% compared to the previous year. During the same period, CU's overall bakery sales grew by only 10%.

A GS Retail official explained, "We judged that bakery products are gradually becoming a staple for customers, so we decided to introduce premium bakery items with the mindset of offering the most delicious bread as close as possible." A BGF Retail official, which operates CU, said, "Convenience store bakeries have mainly offered snack breads like cream bread and pizza bread, but recently, sandwiches and mild breads for cooking have become a trend. We plan to continuously introduce premium breads that were difficult to find at convenience stores."