Snack Business as the "Second Core Business"
Snack Segment Accounted for 12.5% Last Year
Rising Expectations from the "Jennie Effect" and "Melon Kick Sensation"
Nongshim has set its sights on the snack market. In an effort to reduce its reliance on its main business, instant noodles, the company has designated snacks as its "second core business" and is expanding its marketing efforts both domestically and internationally. The strategy is to increase its market share in the global snack sector?which is the largest segment in the processed food industry worldwide?and thereby strengthen its corporate competitiveness.
Jennifer introducing Banana Kick on the American talk show 'The Jennifer Hudson Show.' Screenshot from YouTube
According to industry sources on June 9, Nongshim recently announced plans to actively foster its snack business as part of its corporate value enhancement strategy. The company aims to nurture snacks as a new growth pillar and achieve consolidated sales of 7.3 trillion won by 2030.
Nongshim has recently focused on the fact that snacks represent the largest segment in the global processed food market. According to Korea Customs Service export statistics, bakery product exports from January to November last year reached a record high of $404 million (about 592.2 billion won), up 8.3% from the same period the previous year. Of this, snacks accounted for 72.5%. Market research firm Euromonitor also reported that the global snack market reached $680 billion (973 trillion won) last year, growing 3.7% year-on-year, and is expected to surpass $700 billion (1,001 trillion won) this year with an additional 3% growth.
Currently, Nongshim produces instant noodles, snacks, and other products (including food and beverages). As of last year, their sales composition was 71.5% from noodles, 12.5% from snacks, and 16.0% from other products, making snacks the smallest segment. Nongshim's snack exports last year amounted to only 29 billion won, just one-tenth of its noodle exports, which reached 246.7 billion won.
However, the situation is different this year. There is growing optimism about a rebound in Nongshim's snack business. In particular, in March, Jennie, a member of the girl group Blackpink, appeared on an American talk show and introduced Nongshim's "Banana Kick" as her favorite Korean snack, which has led to a significant increase in export volumes. After Jennie introduced Banana Kick on the American talk show, Banana Kick's export volume to the United States rose by 69% compared to the previous month. Anticipation for increased sales even boosted Nongshim's market capitalization by about 264 billion won, rising from approximately 2.33 trillion won before the video was released to 2.594 trillion won immediately after.
Melon Kick, the "younger sibling" of Banana Kick, is also creating a sensation. In its first week after launch, 1.44 million bags were sold, and sales reached 3.5 million bags within a month, making it extremely popular. It ranked first in snack sales at major convenience stores and large supermarkets. Notably, thanks to the Melon Kick effect, sales of the original Banana Kick also increased by more than 50% year-on-year. Starting in the second half of the year, Nongshim plans to target the United States, Japan, and China with Banana Kick and Melon Kick. The company also plans to launch another fruit-flavored Kick series product within this year.
Jennifer introducing Banana Kick on the American talk show 'The Jennifer Hudson Show.' Screenshot from YouTube
"Bbangbujang" is another flagship snack Nongshim is promoting alongside the Kick series. Bbangbujang is a snack version of the salt bread that gained popularity in Japan and has become a favorite among Japanese tourists, creating a phenomenon. Bbangbujang has already entered the Japanese market and is currently being produced and sold in China as well.
The company is also strengthening its "retro marketing" by reintroducing discontinued popular products. This year alone, Nongshim has relaunched "B29" and "Cleopatra Potato Chips," which were discontinued after being released in 1981 and 1980, respectively. In particular, Cleopatra Potato Chips has expanded its product lineup by introducing "Salt & Olive" and "Salt & Gim" flavors in succession.
Having already confirmed the growth potential of products like Banana Kick and the Bbangbujang series in both domestic and international snack markets, Nongshim plans to further expand its overseas production and distribution networks. In the long term, the company is expected to establish overseas production bases through strategic investments and pursue partnerships with leading local companies.
Nongshim stated, "We will solidify the snack business as Nongshim's second growth engine," and added, "We will continue to expand our lineup with a diverse range of products."
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