ACROFAN

CJ CheilJedang Innovation Seminar

Published : Monday, January 23, 2017, 8:47 am
ACROFAN=Yong-Man Kwon | yongman.kwon@acrofan.com | SNS
CJ Cheiljedang held an 'Innovation Seminar' at Incheon Frozen Food Plant in Jung-gu, Incheon on January 20, and introduced its global vision that it will achieve sales of 1 trillion won and 70% of 'Bibigo Dumpling' sales in overseas markets until 2020.

CJ CheilJedang has invested 200 billion won in Korea, US and China to differentiate its brand, R & D and manufacturing capabilities over the past three years in order to foster ‘Bibigo Dumpling’ as a global brand. It had been number one in both domestic and U.S. market, and achieved sales of 330 billion won in domestic and international dumpling markets. The company plans to expand its global business in the future, aiming to achieve sales of 1 trillion won in 2020, 70% of overseas sales in total sales, and the first place in global dumpling market.

For this, CJ CheilJedang introduced a policy of investing more than 200 billion won and expanding its global production bases centered on the United States and China to Russia, Germany and Vietnam to secure production bases by continent. At the same time, it will expand its Guangzhou plant in China and establish a new plant near Beijing. The company plans to expand its exports to Southeast Asia, South America, and Commonwealth of Independent States based on production bases by country, and to acquire competitive local companies. In addition, it plans to present localized products reflecting characteristics of national food culture with continuous R&D investment.

 
▲ CJ CheilJedang Cho Cheol-min, Manager of Incheon Frozen Food Plant

 
▲ Currently, production facilities in Korea have an important meaning as a global reference.

CJ Cheiljedang Cho Cheol-min, a manager of Incheon Frozen Food Plant, first introduced the manufacturing process of Bibigo dumplings. The manufacturing process of ‘Bibigo Royal Court’ Dumpling is largely classified into pretreatment, processing and packaging. In pretreatment process, the raw material is separated from the foreign matters, vegetables and meat are cut, and mixed with seasonings. At that time, optic sorting machine was used for the selection of vegetables and meats, and the meats are 'sliced' for maintaining the taste of the ingredient as it is.

In the processing process, the seasoned dumplings are put into a molding machine and the dumplings are shaped. Then, they are steamed for 5 minutes at 99°C, and rapidly frozen at minus 40°C for 18 minutes. In this process, he added that the company has a patent for a molding machine for a unique shape of a royal court dumpling, and it also has a competitiveness in the technology of minimizing the intercellular ice grains by passing formation of ice crystals in the shortest time during the freezing process. In the packaging process, the first and second metal detection and packaging are progressed, and the product is finally shipped after quality inspection in analytical laboratory.

For differentiated manufacturing technologies of Bibigo dumpling, CJ Cheiljedang mentioned improving taste quality through realization of the taste of ingredients as they are and chewy dumpling skin, securing global manufacturing competitiveness through new technologies and facilities, and securing mass production system through quality and operation system. Among them, in aspect of the improvement of taste quality, the destruction of the material's tissues is minimized through its meat cutting technology that slices natural raw materials rather than grinding them. Moreover, it is introduced that in order to make thin and chewy dumplings of about 0.7mm, exclusive flour and hand-hitting manufacturing technology for dumpling skin are applied.

In securing manufacturing competitiveness through new technologies and facilities, it is introduced that the effects such as development of new facility for molding 'royal court dumpling' in the form of sea cucumber, energy saving by about 30% through optimization of the equipment structure in the steamer, and shortened maximum ice crystal formation time with high-efficiency freezer are produced. In addition to the application of automation of preprocessing, packaging, and loading, the company also introduces 'taste variation inspection' technologies such as fragrance, texture and microbiological analysis equipment, and debris removal technology for mass production systems and has effective management system with HMI, MES, etc.

CJ CheilJedang is applying this production technology in Korea to overseas and currently it has been applied to Frankfurt, Guangzhou and LA. The company plans to increase it further in the future. It will apply plant design, technology and operation technology of Incheon Frozen Food Plant to production facilities of USA, China, Vietnam, Germany and Russia, and support construction and manufacturing technology. Meanwhile, in aspect of the expansion of plants, CJ Cheiljedang is expanding production capacity in China with the acquisition of local companies in Russia and Vietnam.

 
▲ CJ CheilJedang Kang Gi-mun, Managing Director of Global R&D Center

CJ CheilJedang Kang Gi-mun, a managing director of Global R&D Center, said that 'Bibigo' dumplings have exceeded 160 billion won in annual sales, which means that one bag is sold every two seconds, and the market share in the dumpling market has exceeded 40%. This success is due to overcoming the negative perceptions of past dumplings. Typical negative perceptions include grinding of all raw materials, unclear raw ingredients, dumpling without elasticity, poor dumpling stuffing and small size, taste of additives, and these images had been around for decades.

Therefore, the goal of the new product was to turn the consumers' negative perception of frozen dumplings. He said he visited 100 dumpling restaurants in the country and analyzed the improvement of the whole plant process to realize full stuffing and chewy skin. Through this, 'Bibigo Royal Court Dumpling' has chewy skin and big stuffing, saves trust by slicing the materials to save the taste rather than grinding, and presents a new shape based on 35g instead of existing 13.5g. Therefore, it is emphasized that the company aimed to create quality dumplings that would inspire consumers rather than market competition.

At present, it is introduced that the shape of royal court dumpling of about 35g is considered to be able to feel richness in more than one dumplings even if it is cut in two, due to the habit of cutting dumplings in two times, and the proportion of dumpling skin has reduced and the proportion of stuffing has increased. Moreover, it has been applied to Korea’s unique handmade 'Mimandu' shape, and appearance and facilities have been filed for design and patent respectively. It is added that thin and chewy dumpling skin has been realized from experience of a long milling business, along with the optimum combination of dumpling skin, by measuring the quality characteristics mechanically, and applying a high water content treatment method.

Instead of 'grinding', 'slicing' method secured original taste of the material as it is, meat juice, and texture. Meat juice could be implemented through exploring specialty stores and researching the literature. Specifically, he explained that he structurally analyzed and implemented 'Xiao Long Bao' in China. In addition, it added that synthetic sweetener, artificial coloring, synthetic flavoring, D-sorbitol liquid and MSG were not added in manufacturing dumplings, which is also attributed to the advantages of the material processing method in the production of dumplings.

 
▲ Not only sticking to Korean style, but localizing products are also one of the success factors.

From Bibigo dumpling brand, the realization of the highest level of taste and product development of thorough localization strategy are mentioned as the plans to enter the overseas market at the level of research and development and planning. The key to success in the US market is the development of products suited to local tastes based on domestic technology. It emphasized dumplings with thin skin and a lot of vegetables, distinguishing them as 'healthy foods.' For example, it used 'chicken dumplings' and 'coriander' according to the local food preference for chicken. The company has achieved market share of 11.3% in the American dumpling market and 55% in Costco.

Moreover, in the Chinese market, localized products such as 'corn royal court dumpling' and 'cabbage royal court dumpling' using corn and cabbage, which have high local preference, are introduced. The emphasis is placed on ease of cooking that can be applied to various cuisines through the steaming process. In addition, the realization of the highest quality of taste that is suited to the local in the world market was also recognized as the main cause of success. Compared to the competitors in U.S., China, Germany, and Japan, the company is highly acclaimed for receiving a score of 4 or more on 5 points of flavor preference.

Therefore, the localization strategy of Bibigo dumpling is to integrate the proven dumpling technology in overseas sites and summarize it as a strategy of localization convergence suited to the taste of foreign consumers. With the strategy of possessing differentiated competitiveness by developing global dumplings such as Pelmeni (Russia) and Cha gio (Vietnam), as well as future-oriented products such as eating-outs, snacks and casualties through continually investing in R&D, CJ Cheiljedang will be active in localization such as using ingredients preferred by local people or launching products with maximized convenience while based on 'Korean dumpling,' which has thin skin and lots of meat and vegetable.

 
▲ CJ CheilJedang Kang Shin-ho, Vice President of Food Business Sector

CJ Cheiljedang Kang Shin-ho, a vice president of Food Business Sector, introduced that dumplings were pushed back on the priority list in CJ's 'Food Culture Korean Wave,' but now they are at forefront. He claimed that he will continue to work on the global expansion of Korean food. What's more, he pointed out that the dumplings before 'Bibigo' showed no major changes in decades with negative images such as the category of consumer distrust, poor product diversity and lack of quality, and that these images served as bad images throughout the frozen food as well.

From 2014 to 2016, 'Bibigo' has invested more than 50 billion won in establishment of the brand and more than 30 billion won in research and facility investment, aiming to enhance the domestic frozen dumpling market by differentiating its brand, R&D and manufacturing aspects. He added that 'Bibigo' is trying to be a representative K-food brand for CJ CheilJedang with Korean restaurant brand. Meanwhile, on the domestic sales basis, CJ's frozen dumplings reached about 195 billion won, of which 'Bibigo' brands accounted for about 160 billion won.

The market share has greatly increased since 'Bibigo royal court dumpling,' and currently, its market share is 44.2%, far ahead of its competitors. The company aims to achieve a market share of more than 50% by 2020. For this, it introduced the strategies such as securing high-quality products at the level of specialty stores, expanding demand for food-related links like the expansion of TPO, and creating food culture to maximize convenience.

One of the difficulties in global expansion of food business is food culture, which is difficult to find in common with people and regions. As dumplings often show similar forms anywhere in the world, there is advantageous condition. Therefore, based on differentiated manufacturing capabilities, accumulated R&D capacity, brand building, and cultivating capacity, CJ CheilJadang suggested a goal of 'achieving the world's first place in Korean-style Bibigo dumplings' through reaching 1 trillion won in dumpling sales and 70% of global sales by 2020.

 
▲ With securing global positions and expansion to major continent market, the company suggested the goal of becoming the world's largest market share in 2020.

Currently, the global market for dumplings is estimated at 5.7 trillion won and CJ is introduced to be ranked 5th with sales of 326.5 billion won. With strategies based on the competitiveness in the brand positioning, R&D, and manufacturing technologies, the company announced that it has achieved the top position in the market by breaking away from the image of the past low-quality Asian local food, brand positioning with ‘healthy Korean brand,’ introducing products tailored to local tastes, maximizing convenience such as microwave cooking, and investing in manufacturing.

In China, the company also presents localized products and differentiated quality with positioning as a trendy and premium brand based on Korean food and invests for expansion of manufacturing capacity. In 2017, the company expects to double its sales in 2016, 23 billion won. At the same time, it has been exporting to 27 countries with the acquisition of five domestic bases such as U.S., China, Germany, Russia and Vietnam. If there is a market presence in the future, the company will proceed the strategy by entering through taking over the region’s competitive company, early stabilizing, and deploying application of technology.

CJ CheilJedang plans to invest more than 200 billion won and expand its global production bases centered on the United States and China to Russia, Germany and Vietnam to secure production bases by continent. Recently, the company has entered into the European market by taking over Russian dumplings (Pelmeni) company. Through Cau Tre, a Vietnamese frozen food company taken over at the end of last year, the company produced ‘Bibigo dumpling’ and Southeast Asian dumplings (Cha go), and it also recently launched ‘Bibigo dumpling’ by investing dumpling facilities in Mainfrost, which is German ‘Bibigo’ Korean food OEM company.

In addition, the company will build the third production base in the eastern part of the US, speed up its market penetration, and plan to enter the business-to-business (B2B) market. China plans to triple the size of its Guangzhou plant, and plans to build a new plant near Beijing this year to expand its influence. In addition, it will develop global localized dumplings such as Pelmeni (Russia) and Cha go (Vietnam), as well as future products such as eating-outs, snacks, and casualties to possess competitiveness. The company will invest in the expansion of M&A with construction of local R&D centers near the factory, and it plans to launch those localized products to domestic.

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