Completion of Haitai Ice Cream Acquisition... Rapid Rise to No.1 Company
Chairman Kim's Strong Will Behind It... Accelerating Overseas Exports of Bravo Cone and More

[Asia Economy Reporter Lee Seon-ae] Together (Binggrae) has embraced Burabocon (Haitai Ice Cream) and has now truly become one family. With Haitai Ice Cream under its wing, Binggrae has swiftly risen to become the number one company in the ice cream market. Binggrae plans to leverage Haitai's brand competitiveness to not only stabilize its position as the leading company in the domestic market but also actively target overseas markets.

"Let's empower the ice cream we do well"

On the 5th, Binggrae completed the final payment for the acquisition of Haitai Ice Cream's shares and finalized its incorporation as a subsidiary. The final acquisition amount was 132.5 billion KRW. Earlier, on the 29th of last month, the Fair Trade Commission reviewed and gave final approval for Binggrae's acquisition of Haitai Ice Cream shares. Binggrae signed a contract on March 31 to acquire 100% of Haitai Ice Cream's shares from Haitai Confectionery & Foods and reported the business combination to the Fair Trade Commission on April 13.

Binggrae, a leading long-established company in the food industry celebrating its 53rd anniversary this year, has prioritized stable management so far, making the 100% acquisition with over 100 billion KRW a groundbreaking move. The market views this as a feat that would have been impossible without the strong will and decisive action of Binggrae's largest shareholder, Chairman Kim Ho-yeon. Chairman Kim chose ice cream, an area Binggrae excels in, as a new growth engine amid growth limitations, demonstrating bold decision-making.

Chairman Kim appointed Park Chang-hoon, Executive Director in charge of management planning, as the new CEO of Haitai Ice Cream. He entrusted Park with overseeing the acquisition process. Park was deemed the right person to strengthen marketing activities to ensure Haitai Ice Cream's successful integration. Park joined Binggrae in 1986, served as Managing Director of Binggrae's Finance Department from 2014 to 2018, and has been Executive Director in charge of management planning since 2019.

Binggrae has become the industry leader with a market share of 40.6% as a single company. According to Nielsen Korea, the ice cream market shares in the first half of this year were ▲ Lotte Confectionery 31.8% ▲ Binggrae 27.9% ▲ Lotte Foods 15.3% ▲ Haitai 12.7%. Combining Lotte affiliates' shares totals 47.1%, just 6.5 percentage points ahead of Binggrae. Therefore, the competition between the two major players grouped under the Lotte brand and especially the sales rivalry with second-place Lotte Confectionery is a key point to watch.

Last year, Lotte Confectionery's ice cream sales reached 500 billion KRW, ranking first in the industry. During the same period, Binggrae's ice cream sales were around 300 billion KRW. Haitai Ice Cream's sales recorded 180 billion KRW, which combined (480 billion KRW) is similar to Lotte Confectionery's level.

Going overseas with 'Burabocon'

Binggrae decided to maintain the Haitai Ice Cream brand to actively utilize Haitai's brand power. Haitai Ice Cream's flagship products such as 'Burabocon', 'Nugaba', 'Ssang Ssang Bar', and 'Tank Boy' account for 90% of total sales. These products have long been recognized by consumers as enduring products under the Haitai brand. Since 'Haitai Burabocon' has become a product name in itself, there was no reason to forcibly change it to 'Binggrae Burabocon'.

Although the domestic ice cream market faces growth limitations, Binggrae plans to expand sales by utilizing existing domestic and international sales networks, achieving cost reductions and actively promoting exports through overseas affiliates to enhance profitability.

The domestic ice cream market size has been declining annually from 1.9564 trillion KRW in 2014 to 1.6749 trillion KRW last year. Therefore, Binggrae has identified cost reduction as a key point in its domestic market strategy. By sharing production facilities, logistics, and distribution, it aims to reduce costs and maximize profits. A Binggrae official said, "We expect to create synergy with the existing ice cream business by leveraging Haitai Ice Cream's familiar brands such as Burabocon, Nugaba, and Babamba, beloved nationwide. Especially, integrating sales networks and joint raw material procurement are expected to reduce cost of goods sold and selling and administrative expenses."

Among domestic ice cream companies, Binggrae has the largest export scale, so synergy is also expected in overseas business. Binggrae has been actively expanding overseas since establishing its Shanghai corporation in China in 2014, followed by corporations in the U.S. in 2016 and Vietnam in 2019. The U.S. market shows remarkable growth. Binggrae's products are stocked in the major local chain 'Costco', and it has started local production of 'Melona' through an OEM method in the U.S., establishing a stable supply base. Melona sells over 10 million units annually in the U.S. Binggrae's ice cream export revenue in the first half of this year was 23.063 billion KRW, about 10% higher than the same period last year. Since Binggrae was previously considered weak in the cone product category, it is expected to first target overseas markets with Burabocon. A Binggrae official emphasized, "We expect to further expand our global business through Binggrae's overseas ice cream distribution network."

Meanwhile, with this combination, Binggrae is expected to join the food industry's '1 trillion KRW sales club.' Last year, Binggrae's consolidated sales were 878.3 billion KRW, a 2.7% increase from the previous year. Adding Haitai Ice Cream's sales (180 billion KRW) surpasses 1 trillion KRW. This is the first time Binggrae's sales have exceeded 1 trillion KRW since its founding.

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