CJ Foodville Breaks Through the "Graveyard" of U.S. Franchises... Nearing Return to the "1 Trillion Won Club"

Performance Recovery Ahead of Georgia Plant Launch
Tous Les Jours, Once Rumored for Sale, Accelerates Global Restructuring
Global Expansion Gains Momentum with Lee Geonil Serving as CEO of Both CJ Freshway and CJ Foodville

Thanks to the strong performance of its overseas business, CJ Foodville is on the verge of recovering annual sales in the 1 trillion won range this year for the first time in eight years. Once referred to as the “problem child” of CJ Group, the company has undergone a dramatic transformation through bold restructuring and a reorganization of its North American operations. In particular, there is an assessment that the recent appointment of Lee Gunil, CEO of CJ Freshway, as the concurrent CEO of CJ Foodville, has laid the foundation for the company to emerge as a key pillar in the group’s global food business.

According to industry sources on October 24, CJ Foodville is highly likely to achieve annual sales of 1 trillion won again this year. After recording 1.2589 trillion won in sales in 2017, CJ Foodville saw its revenue plummet to 617.3 billion won in 2020, hit hard by the sale of its franchise caf? Twosome Place and the direct impact of the COVID-19 pandemic. Since 2015, the company had been posting losses, making it the “top priority for restructuring” within the group, and rumors of a possible sale of Tous Les Jours persisted.

However, since 2019, the company has closed down overseas subsidiaries with low profitability and reorganized its business to focus on regions with high growth potential, such as the United States, Indonesia, and Vietnam. This went beyond simple restructuring, as the company pursued a “selection and concentration” strategy to strengthen its global competitiveness.

Currently, CJ Foodville operates approximately 580 Tous Les Jours stores across nine countries, including Indonesia, Vietnam, Mongolia, and Cambodia. The results in the U.S. market are particularly noteworthy. Despite being known as a “graveyard” for domestic franchise companies due to fierce competition, CJ Foodville’s U.S. subsidiary succeeded in turning a profit for the first time among its overseas subsidiaries in 2018. Sales rose from 36.8 billion won in 2019 to 137.3 billion won last year, setting new record highs for six consecutive years and driving the overall recovery in profitability.

Tous Les Jours currently operates about 170 stores in 28 U.S. states. The company has set a goal of reaching 1,000 stores by 2030. The key infrastructure supporting this growth is the new factory in Gainesville, Hall County, Georgia, scheduled for completion at the end of this year.

CJ Foodville is investing about 120 billion won to build a large-scale production facility on a 90,000-square-meter (22,225-pyeong) site. Once completed, the plant will be able to produce more than 100 million units of frozen dough and cakes annually. This is expected to not only strengthen the local supply chain and reduce logistics costs, but also serve as a foothold for expanding distribution networks throughout the southeastern United States. Industry insiders say, “The Georgia plant will be a watershed moment for CJ Foodville’s global business.”

CJ Foodville’s aggressive overseas strategy is closely linked to the limitations of the domestic market. The bakery sector is designated as a suitable industry for small and medium-sized enterprises, with new store openings limited to within 5% per year. Meanwhile, competitor SPC Group is also investing about 230 billion won to build the largest bakery plant in North America in Texas, aiming for completion in 2027, and is expanding its presence in the local market with Paris Baguette at the forefront. The competition for leadership in K-bakery is intensifying.

CJ Group is actively supporting CJ Foodville’s transformation. This is evidenced by the appointment of Lee Gunil, who has extensive experience in food material distribution and global business, as the concurrent CEO of CJ Freshway and CJ Foodville. CJ Freshway is responsible for food distribution within the group and has built global supply chains in hotel and dining channels. Lee’s dual role is expected to accelerate CJ Foodville’s overseas expansion strategy. An industry official commented, “CEO Lee Gunil gained experience in global sourcing and logistics innovation during his time at Freshway. His expertise is expected to create tangible synergy in accelerating CJ Foodville’s entry into North America and expanding into Southeast Asian markets.”

Another industry source said, “If you recall the time when CJ Foodville was plagued by rumors of a sale, the current changes are dramatic. Within CJ Group’s food portfolio, CJ Foodville is now establishing itself as a core pillar driving overseas growth.”