Heodak-Kyochon, Successful HMR Results... 15x Sales Growth in 6 Months

Heodak Co., Ltd. (Co-CEOs Kyunghwan Heo and Juhyung Kim) and Kyochon F&B Co., Ltd. (Chairman So Jinse) announced major achievements about six months after signing an MOU and starting a joint online home meal replacement (HMR) business.

Heodak signed a business agreement with Kyochon in July last year focusing on the HMR joint business, aiming for 10 billion KRW in sales in the first year and 30 billion KRW in annual sales by 2022, promoting comprehensive cooperation including joint product development and production.

According to the data, online sales, which were about 60 million KRW in the first month of the business, increased approximately 15 times to around 900 million KRW per month within six months, and the number of handled items rapidly expanded from 10 to 62. Cumulative sales volume surpassed 1.76 million units, achieving results higher than the initial target.

Heodak’s Deputy General Manager Hyeyoung Lee said, “The past six months, which were a time to verify the business potential, involved the first collaboration between companies with different market areas, so we operated focusing on stability, which caused some inconvenience to customers due to stock shortages. However, we believe the collaboration in the strengths of both companies, online and R&D, was successful. Considering the current sales trends and repurchase rates, we expect to achieve results exceeding the projected targets.”

Meanwhile, Heodak developed and implemented an AI system specialized in demand forecasting and operations across the business based on investment from Kakao Ventures in 2019. In 2020, recognizing these capabilities, Heodak attracted a second round of investment from IBK Industrial Bank of Korea and selected NH Investment & Securities as the lead underwriter. Sales have also shown nearly 200% annual growth, reaching 8.4 billion KRW in 2018, 17.4 billion KRW in 2019, and 34.5 billion KRW in 2020.

Following the announcement of successful business results, Heodak plans to complete HMR product planning with its second joint venture partner, Saeng Augustin, within the first half of the year, and is known to start joint HMR businesses with at least six brands this year, including Pizzaettang.