[Reporter’s Notebook] How Was Shuka World's "990-Won Salt Bread" Possible?

Photo by Midam Heo

"Setting the price of bread is not a simple matter."

During an interview for the feature article "The Secret of Bread Prices," Choi Jiwoong, Secretary-General of the Korea Bakery Association, responded this way when asked why bread prices in Korea are higher than in other countries. He explained that the cost of ingredients varies depending on whether butter or margarine is used, and that there are many factors to consider, such as labor costs and rent. He added, "As consumer tastes become more sophisticated, customers avoid bakeries that use cheap ingredients."

On August 30, the economic YouTuber Shuka World collaborated with the spatial design company Glow Seoul to open a pop-up store called "ETF Bakery," where they held an event selling salt bread, bagels, and baguettes for 990 won each. The response from customers was enthusiastic. People lined up hours before opening, cheering for the unprecedentedly low prices.

However, independent bakeries expressed frustration, saying that they may appear to be making excessive profits. With over 19,600 bakeries operating in Korea, the industry has long been a "red ocean." Due to intense competition, individual stores are forced to develop unique menus and use premium ingredients such as high-quality flour and butter in order to compete on quality and survive.

In contrast, the secret behind Shuka World's ultra-low-priced bread is minimizing the use of expensive raw materials such as dairy products, reducing fixed costs, and pursuing a high-volume, low-margin strategy. The "990-won salt bread" lowered production costs by using both butter and margarine, and labor costs were reduced by simplifying the shape and packaging of the bread. Most importantly, Shuka World was able to lower prices because they secured sufficient sales volume and produced enough to meet demand. Shuka World stated, "Our daily production limit is 2,000 pieces," but added that they would consider expanding production if demand continues. Ultimately, lowering bread prices requires mass production, but for independent bakeries, it is virtually impossible to mass-produce bread using low-cost ingredients as Shuka World does.

While consumers feel burdened by prices, it is clear from profitability alone that independent bakeries are not making excessive profits. According to a report by the Fair Trade Commission, the operating profit margin for bakery specialty stores in 2022 was 6.3%, lower than that of chicken restaurants (9.5%) and coffee shops (7.2%). The industry's point is clear: the "990-won salt bread" is an experiment that a well-known YouTuber can attempt for a short period, but it is not a sustainable pricing structure for ordinary bakeries in the long term.

Shuka World's "990-won salt bread" highlighted just how differently consumers and the industry view bread prices. With consumption rising but prices continuing to increase, it seems difficult to arrive at a price that both consumers and producers can agree on. However, the debate over bread prices should not end as a mere episode of confusion. To compete with large bakeries, it is essential to offer menus that showcase unique flavors and techniques. By analyzing consumer needs down to the smallest detail-such as low-carb bread and vegan bread-and developing distinctive menus, bakeries must go beyond value for money to achieve exceptional value for money and stand out in the market.