CU Begins Full-Scale HFF Sales After Securing Permits for 6,000 Stores

Launch of Health Functional Foods with Chong Kun Dang and Dong Wha Pharm
All Products Priced at 5,000 Won or Less
"Health Functional Foods Emerging as a Key Growth Driver for Convenience Stores"

CU, the convenience store chain operated by BGF Retail, announced on July 28 that it has completed the acquisition of permits to sell health functional foods (HFFs) at approximately 6,000 stores nationwide and will begin selling these products.

Earlier this year, CU conducted preliminary promotions about HFF operations to its franchisees through a product convention. As a result, about 6,000 stores, representing 32% of all CU locations, acquired the necessary permits for HFF sales this month.

BGF Retail's convenience store CU announced on the 28th that it has completed obtaining sales permits for health functional foods (health supplements) at over 6,000 stores nationwide and will begin selling health supplements. Photo by BGF Retail

The HFFs being introduced this time are a total of 11 products developed in collaboration with pharmaceutical companies Chong Kun Dang and Dong Wha Pharm. These products are characterized by their small-quantity, small-package formats, each containing a 10-day supply.

Chong Kun Dang's HFFs are released under the "Health Project 365" brand and include nine types, such as brain memory, women's health, eye health, and bone health. In partnership with Dong Wha Pharm, CU will offer two types under the "Maglab for Stress, for Energy" line. The stress-relief product contains Rhodiola rosea extract, known for fatigue recovery, while the energy product contains three types of vitamin B complex for energy replenishment.

CU, after discussions with the pharmaceutical companies, set the price of all products at 5,000 won or less. By enhancing accessibility and price competitiveness, CU aims to expand the market base for HFFs in convenience stores. Currently, CU offers around 70 health-related products.

The reason the convenience store industry is expanding into HFFs is that consumer interest in health has been rising, driven by trends such as slow aging and healthy pleasure, which has led to a steady increase in demand for related products. In fact, CU's year-on-year sales growth rates for health foods were 5.3% in 2021, 27.1% in 2022, 18.6% in 2023, and a significant 137.2% last year. In the first half of this year (January to June), sales increased by 85.0%, rapidly establishing HFFs as a new growth engine for convenience stores.

CU plans to continue introducing small-quantity, high-quality, and reasonably priced HFFs by partnering with various pharmaceutical companies and health food specialists in the future.

Park Hyungkyu, BGF Retail's processed foods team MD, said, "CU has anticipated the continued growth of the convenience store healthcare market and has prepared for HFF sales more quickly and systematically than anyone else. With the launch of HFF sales, we are also running bold discount promotions, which we believe will provide customers with valuable opportunities to use their coupons for healthy purchases."