Orion's Q1 Operating Profit Grows 26%... Popularity of Kkobuk Chip, Choco Pie, and Dr. You

[Asia Economy Reporter Lee Seon-ae] Orion Group announced on the 6th that its business company Orion recorded consolidated sales of 539.8 billion KRW and operating profit of 97 billion KRW in the first quarter of 2020. Compared to the same period last year, sales grew by 8.5% and operating profit by 25.5%.

Orion Korea recorded 7.2% sales growth, driven by strong sales of snack products such as ‘Pocachip’, ‘Sun’, ‘Kkobukchip’, and ‘Chicken Pop’, as well as ‘Choco Pie’, ‘Digestive’, and ‘Dr. You Protein Bar’. Differentiated snack products such as the uniquely textured four-layer snack ‘Kkobukchip’ and ‘Pocachip Dangcho Soy Sauce Flavor’ and ‘Roasted Garlic Flavor’, which add Korean taste to potato chips, led the growth. In addition, the spring limited edition ‘Choco Pie Strawberry Blossom’, newly introduced as a pink Choco Pie, sold out in some stores, contributing to sales growth. ‘Dr. You Protein Bar’ also supported growth by recording the highest monthly sales since its launch in February, amid rising interest in immunity and an increase in home training enthusiasts.

In the second quarter, Orion plans to strengthen its value-for-money snack lineup such as ‘Potato Inside Potato’ and ‘Cheese Sprinkled Chicken Pop’, and diversify its growing protein product range to drive continuous sales growth. The company will also strengthen new businesses to create new growth momentum. Premium mineral water ‘Orion Jeju Lava Water’ will be actively exported to China, Vietnam, and other countries, and the product lineup of the convenient meal replacement market brand ‘Oh! Granola’ under Market O Nature will be expanded to maintain growth.

The China subsidiary recorded 4.6% sales growth compared to the same period last year despite a weak quarter due to the early Lunar New Year effect, thanks to the high growth of the snack category, expansion of retail shelf share, and online channels such as ‘Tmall’ and ‘JD.com’. The representative snack product ‘Oh! Potato’ (Ya! Tudou) saw first-quarter sales increase by more than 51% year-on-year, and ‘Swing Chip’ (Haoyouchu) sales grew by 30% during the same period. In particular, new products that maximize texture, such as ‘Oh! Potato Star’ (Ya! Tudou Chui Chuixing) and ‘Swing Chip Flat Cut’ (Haoyouchu Baopian), received high acclaim and led overall sales growth.

In the second quarter, Orion plans to launch localized flavors such as ‘Sticky Choco Pie’ (Nuo Haoliyou Pai) and new flavors of ‘Swing Chip Flat Cut’, while releasing small-sized products exclusive to general retail stores such as ‘Chicken Pop’ (Paopao Abu) and ‘Oh! Potato Mini Star’ (Ya! Tudou Mini Xing) to actively expand market share. Additionally, the company will establish an efficient production and shipping system and thoroughly manage product quality to continuously supply high-quality products.

The Vietnam subsidiary achieved its highest sales for the first quarter since entering the market. Thanks to successful new category development such as rice crackers and mass-produced bread, and expansion of new distribution channels including convenience stores and chain stores, sales grew by 23.9%. In particular, snack sales such as Pocachip (Osta) and Oh! Potato (Tayo) increased by 58% year-on-year in distribution channels popular among young consumers like convenience stores and chain stores. The newly launched rice cracker ‘An’ (An, 安) exceeded monthly sales of 1.6 billion KRW, and the mass-produced bread ‘C'est Bon’ also became popular as a breakfast substitute, surpassing monthly sales of 1 billion KRW, establishing itself as a new growth engine.

Going forward, Orion plans to continue launching new snack and pie products to maintain high growth in Vietnam, while strengthening sales activities targeting rapidly growing convenience stores and chain stores based on recent income level improvements.

The Russia subsidiary grew by 32.8% by successfully expanding its Choco Pie product line. Introducing berry-flavored Choco Pies familiar to local consumers such as ‘Raspberry’, ‘Cherry’, and ‘Blackcurrant’, first-quarter Choco Pie sales grew by more than 32% year-on-year, marking a second heyday. In the second quarter, Orion plans to build a diverse product lineup by strengthening the expanded Choco Pie lineup along with biscuit lines such as ‘Choco Song-i’ (local name: Chocoboy) and ‘Gosomi’ (local name: Gute).

An Orion official said, “We maintained steady growth domestically and internationally by strengthening the R&D headquarters’ functions and launching impactful new products through product innovation,” adding, “We will continue to strengthen product competitiveness by concentrating human and material resources on R&D and sustain healthy growth through the successful execution of new businesses.”

This content was produced with the assistance of AI translation services.