CJ Freshway Secures Contracts with 7 Major Franchises Despite COVID-19 Recession

CJ Freshway employees are focusing on product development.

[Asia Economy Reporter Lim Hye-sun] CJ Group's food ingredient distribution and group meal specialist company CJ Freshway is achieving mutual growth with its clients by continuously securing large franchise contracts.

Despite the challenging business environment caused by the spread of COVID-19, CJ Freshway secured contracts with seven large franchise brands with monthly sales exceeding 100 million KRW last year. Among them was 'Onsen,' a name made popular through a major broadcast network's popular program.

Last year, as the dining-out industry, a front-line sector, froze due to the spread of COVID-19, many franchise brands suffered significant damage. In fact, the number of dining establishments that closed in the fourth quarter of last year, when strict social distancing measures were implemented, reached about 20,000 nationwide, with a closure rate of 116%.

In this situation, CJ Freshway's success in securing contracts with numerous large franchise brands was due to its customer-tailored food ingredient supply. For dining-out franchises, the unit price of handled products is low and the variety is large, making it difficult to secure profitability through economies of scale. This is the first difficulty encountered when starting a dining franchise.

CJ Freshway resolved clients' difficulties by supplying a wide variety of small-quantity food ingredients. Moreover, it did not stop at simply delivering raw materials but strived to supply customized food ingredients tailored to clients' menus. Given that the menu directly relates to the brand's competitiveness in the food service industry, this was an essential concern for mutual growth with clients.

CJ Freshway supplies specially blended frying oil, exclusive sauces, and specification-matched food ingredients through its own infrastructure such as Songrim Food and J Farms. In fact, CJ Freshway co-developed a special powder with 'Onsen.'

Additionally, it is making multifaceted efforts to strengthen client competitiveness through regular hygiene and safety inspections, franchise service checks, and new menu development.