Orion Achieves Record High Performance Last Year... Revenue 2.3204 Trillion KRW, Operating Profit 375.6 Billion KRW

[Asia Economy Reporter Seungjin Lee] Orion Group achieved its highest performance last year as its efficiency- and profit-focused management shone.

Record Operating Profit for Two Consecutive Years

Orion Group announced on the 3rd that its business company Orion recorded consolidated sales of KRW 2.2304 trillion and operating profit of KRW 375.6 billion in 2020.

Compared to the previous year, sales grew by 10.2% and operating profit by 14.7%. Despite increased global economic uncertainty due to COVID-19, overseas subsidiaries in China, Vietnam, and Russia all achieved double-digit sales growth rates and operating profit margins comparable to global food companies.

The Korean subsidiary recorded sales of KRW 769.2 billion, a 5% increase, and operating profit of KRW 123.8 billion, a 14.8% increase. It continued to maximize sales and profits through thorough data-driven management in product production and channel inventory control, while aggressively launching over 40 new products to sustain growth. Notably, the ‘Kkobuk Chip Choco Churros’ flavor launched in September last year sparked a sell-out craze and established itself as a global flagship product following Choco Pie, according to Orion.

Amid the COVID-19 situation, Orion released a series of online-exclusive products, achieving high sales growth in the e-commerce confectionery market. With rising demand for convenient meal replacements and healthy foods, sales of Market O Nature’s granola products and the Dr. You brand increased significantly by 34% and 21%, respectively, compared to the previous year.

This year, Orion plans to continue growth by aggressively launching differentiated new products with new forms and flavors across all categories including pies, snacks, and biscuits. Additionally, the Dr. You brand will be reorganized as a ‘functional food label brand’ and will introduce various products such as nutrition bars, beverages, jellies, and chocolates enriched with nutritional components. The renewed ‘Dr. You Jeju Lava Water’ will expand consumer touchpoints and actively increase overseas exports. ‘Oh! Granola’ will also lead growth by introducing various new products tailored to consumer preferences and lifestyles.

Global Market Sales Increase

The China subsidiary quickly recovered market share through various new product launches, expanded shelf space, and entry into new stores, surpassing KRW 1 trillion in sales again after the THAAD (Terminal High Altitude Area Defense) incident. Sales grew 12% to KRW 1.0916 trillion, and operating profit increased 9.1% to KRW 173.1 billion.

‘Haoliyou Pie’ (Choco Pie) and ‘Ya! Tudou’ (Oh! Potato) each exceeded annual sales of KRW 200 billion as single brands, significantly contributing to sales growth. The ‘Dr. You Nut Bar’ launched mid-last year sold over 12 million units within four months, confirming its potential success in China’s nutrition bar market.

The Tao Kae Noi seaweed snack products, pioneering the seaweed snack market, also grew to annual sales of around KRW 60 billion, establishing themselves as a new growth engine. Meanwhile, in December 2020, the China subsidiary recorded an accounting expense of KRW 16.3 billion by granting stock options to employees as motivation for future business growth.

This year, Orion plans to expand the market from confectionery to meal replacement categories by launching breakfast replacement products such as bread and granola, while aggressively releasing new products including seaweed snacks, jellies, and nut bars to further strengthen growth. The company will also focus on the global water market by expanding the placement of ‘Orion Jeju Lava Spring’ (Haoliyou Longyanquan) and actively conducting consumer promotions.

The Vietnam subsidiary achieved record performance with sales growing 15.7% to KRW 292 billion and operating profit increasing 33.2% to KRW 63.7 billion. ‘An,’ which pioneered the rice snack market, expanded its lineup and rose to become the second-largest brand in the local rice snack market. The bread brand ‘Ssebbong’ also gained popularity among office workers and students in major cities, achieving annual sales of KRW 16 billion, supporting the growth of the Vietnam subsidiary. Aggressive store expansion into new distribution channels such as large supermarkets and convenience stores also supported the strong performance.

This year, Orion plans to strengthen market dominance of existing core brands such as pies and fresh potato chips by expanding Choco Pie flavors and launching new pie lines, while increasing fresh potato chip sales through line expansion. The company will also expand new product categories such as jellies and nut bars to further strengthen its dominance in the Vietnamese confectionery market. As local living standards improve and demand for healthy and safe water surges, Orion will conduct multifaceted marketing to establish ‘Orion Jeju Lava Water’ as a premium product and further expand sales channels.

The Russia subsidiary achieved sales growth of 15.2% to KRW 89 billion and operating profit growth of 31.3% to KRW 16.9 billion by successfully expanding the Choco Pie and biscuit lineups. New Choco Pie products using berry jams familiar to Russian consumers were big hits, resulting in record-high performance.

This year, Orion plans to solidify the market leadership of the expanded Choco Pie lineup and build a second growth foundation by expanding distribution channels for biscuit products. Meanwhile, construction of the new factory in Tver Oblast is underway, with plans to complete it by 2022 as scheduled. Once operational, the new factory is expected to increase Choco Pie supply to over 1 billion units annually, significantly boosting sales.

An Orion official said, “All subsidiaries achieved high sales and operating profit growth through aggressive launches of over 80 new products globally and efficiency- and profit-focused management restructuring. This year, we will continue to launch competitive new products, improve efficiency and profitability, successfully enter new markets such as India, and develop new businesses including beverages, convenience foods, and bio to sustain healthy growth.”

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