Global Ambassador of Pepero NewJeans

Lotte Group has chosen Pepero, a thin stick cookie covered in chocolate, as the first brand it will cultivate as one of the world’s 10 most valuable brands with annual sales of over 1 trillion won ($747 million).

Pepero is one of Lotte Wellfood Co.’s snacks, which has recently become more popular in foreign markets, and its global sales reached 200 billion won in 2023.

South Korea’s sixth largest conglomerate, which controls food, retail, chemical, construction, hotel, and finance businesses, will cultivate the stick snack as Asia’s No. 1 brand and one of the top 10 global brands in the food and beverage sector (F&B) by 2035 under the direction of its Chairman Shin Dong-bin.

“Lotte’s Korean and Japanese operations must work closely together to build a sustainable brand in the global market,” Shin was quoted as telling executives who accompanied him during his business trip to Europe last week. “I encourage you all to work hard to cultivate a number of global brands with global sales of over 1 trillion won each.”

ONE LOTTE FOR GLOBAL BRANDS

Founded by late Lotte Honorary Chairman Shin Kyuk-ho, who was a Korean citizen, in Japan in 1948 as a bubble gum manufacturer, Lotte has grown into a multinational retail-to-chemical business empire that calls Japan and Korea home.

Lotte Group Chairman Shin Dong-bin (centre) visits confectionery factories in Belgium and Poland

Through close collaboration, Lotte’s Japanese affiliate plans to assist its Korean confectionary sibling Lotte Wellfood, also a Korean packaged snack and ice cream producer, in its global drive to discover new growth markets.

Lotte will also try to expand sales of Pepero in the most populous countries of India and Southeast Asia, where the snack is already popular.

To meet its growing demand, Lotte Wellfood earlier this year announced a plan to build a Pepero production line in India, which will serve as one of the company’s Pepero export hubs once it becomes operational in the second half of next year.

This is part of Lotte Wellfood’s goal to increase its overseas sales to 30 to 50% of its total sales by 2027 to improve its global brand awareness.

As part of its global push, Lotte Wellfood bought Belgian chocolate brand Guylian, also one of the world’s top three chocolate brands, in 2008, while its Japanese sibling Wedel took over the oldest chocolate brand in Poland, by Kraft Foods in 2010.

During his business trip to Europe last week, Chairman Shin visited confectionery factories in Belgium and Poland. He also attended the opening ceremony of the Wedel chocolate museum in Warsaw, Poland.

The Lotte boss has been emphasizing innovation to revitalize the group’s businesses through two avenues of expanding sales and discovering new growth engines.

After years of mergers and active acquisitions to achieve economies of scale, Lotte is focusing more on new growth engines such as bio, the metaverse, hydrogen energy, and electric vehicle battery materials while selling ailing units in its traditional core businesses such as chemical.