Kim Jaeyeon, CEO of Chorokmaeul, "Chorokbebe to Turn Profitable Next Year" (Comprehensive)

Chorokmaeul Launches Infant Food PB Brand 'Chorok Bebe'
Diversifies Products by Child Development Stages
Aims for Profit Turnaround Next Year and 300 Billion KRW Sales Target

Chorokmaeul is accelerating its performance improvement by launching a new brand specializing in infant food. In a domestic infant food market without a clear leader, the company plans to become a leading player in the market with high-quality products and services based on over 20 years of experience handling eco-friendly and organic foods. Additionally, it aims to achieve profitability next year based on its infant food business and increase annual sales to around 600 billion KRW within the next 3 to 4 years.

Kim Jae-yeon, CEO of Chorokmaeul, is introducing the new infant food brand 'Chorok Bebe' at a press conference on the 22nd.

Launch of Infant PB 'Chorok Bebe'... "Membership Target of 100,000 by Year-End"

On the morning of the 22nd, Chorokmaeul held a press conference at its headquarters in Nonhyeon-dong, Gangnam-gu, Seoul, announcing the official launch of its exclusive infant food private brand (PB), 'Chorok Bebe.' Chorok Bebe covers processed and fresh foods tailored to the child's developmental stages from early weaning (6 months old) to the transition to adult food (36 months old).

Chorok Bebe was planned and developed under the principle of "no compromise on infant food safety and quality." It only handles eco-friendly and organic raw materials that meet its own standards and excludes unnecessary artificial additives. The officially launched Chorok Bebe products include 42 fresh food items such as powdered baby food, portioned vegetables, minced vegetables, and minced livestock and seafood, as well as 17 processed foods including snacks, beverages, and side dishes, with a goal to release an additional 26 products within the year.

This new business by Chorokmaeul was pursued based on the judgment that there is market potential since no brand has yet dominated the entire domestic infant food market, including fresh ingredients and processed foods. Especially, with parents' quality and safety standards for their children's food higher than ever, it is interpreted that the company believes it can be competitive by introducing a premium brand based on expertise secured over 24 years in the eco-friendly and organic market. Kim Jaeyeon, CEO of Chorokmaeul, said, "By positioning Chorok Bebe as an anchor PB, we plan to continuously strengthen safe food for the whole family so that customers who enter through infant food can stay long-term within the Chorokmaeul ecosystem."

Chorok Bebe products, an infant food brand by Chorokmaeul.

They will also operate an exclusive membership called 'Bebe Pass.' With an annual membership costing only 12,800 KRW, members can enjoy unlimited 10% discounts on Chorok Bebe products and receive an exclusive cooling bag, among benefits worth over 85,000 KRW. Membership customers receive highly personalized customer relationship management, providing tailored information for each growth stage to help form proper eating habits and recommending recipes suited to infants' tastes.

Chorokmaeul announced its ambition to have more than 20% of the 780,000 infants aged 0 to 2 in Korea experience its products by next year and help them grow healthily, along with a goal to acquire 100,000 Bebe Pass members by the end of the year. Through this, the company plans to provide a differentiated purchasing experience and aim for a definite 'lock-in effect' during the critical three years of infant food needs.

Previously, Chorokmaeul enhanced online purchasing convenience by revamping its application service for customers such as infant families who find it difficult to visit stores. Following the introduction of early morning delivery earlier this year, last month it upgraded same-day delivery services linking about 380 stores nationwide with online orders. According to the company, more than half of Korea's population currently lives in so-called 'Chosegwon' areas where Chorokmaeul online orders can be delivered on the same day. Given the nature of infant food, which requires feeding various ingredients little by little, the plan is to further highlight Chorok Bebe's competitiveness through fresh same-day delivery whenever needed.

Lee Sohae, Chief Marketing Officer (CMO) of Chorokmaeul, who oversaw brand planning, said, "We carefully considered the hearts of infant parents and implemented exclusive product planning, a highly personalized membership launch, and strengthened same-day delivery in an integrated manner." She added, "Starting with Chorok Bebe, we will once again lead the popularization of healthy and safe food through a differentiated customer-first strategy."

Profitability Turnaround Next Year... Annual Sales Target of 600 Billion KRW Within 3-4 Years

Chorokmaeul, previously under Daesang Holdings, was acquired by the livestock-specialized startup Jeongyookgak in April last year. Since the acquisition, Jeongyookgak has focused on improving infrastructure such as IT, logistics, and data, which were pointed out as weaknesses of Chorokmaeul. After fully redeveloping the mobile app as a native app last month, this month they developed and introduced a proprietary search engine applying OpenAI GPT-4 to the Chorokmaeul mobile app.

As Chorokmaeul designates the infant food business as a new growth engine, attention is focused on whether it will succeed in turning a profit this year. Chorokmaeul has recorded operating losses for five consecutive years until last year, including a 4.3 billion KRW operating loss in 2018. At the time of acquisition last year, Jeongyookgak covered a funding shortfall of 32 billion KRW with a short-term loan from Shinhan Capital. Although the plan was to repay the loan through additional investment attraction, the investment market froze, leading to an extension of the repayment period. While overcoming a short-term liquidity crisis, additional funding and performance recovery are still needed.

Regarding this, CEO Kim expects the new business to accelerate profit improvement. He said, "We expect to surpass the monthly break-even point starting this month, and this trend is expected to continue until the end of the year." He added, "Next year, we anticipate achieving a meaningful level of operating profit." He further stated, "The sales scale we aim to generate through the Chorok Bebe brand next year is around 300 billion KRW, and by positioning Chorok Bebe as an anchor PB, we aim to raise Chorokmaeul's total sales, currently around 200 billion KRW, to about 600 billion KRW within the next 3 to 4 years."

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