CJ CheilJedang boosts the consumption of rice by leading the growth of the ‘processed rice HMR’ market with differentiated technology
CJ CheilJedang is serving as a driving force to boost the market growth and consumption of rice with differentiated ‘processed rice home meal replacement (HMR)’ technology.
Striving to coexist with local farms by increasing the purchase of rice that gets used for processed rice HMR by 20% every year
▲ CJ CheilJedang processed rice products
CJ CheilJedang has increased the purchase of domestically produced rice that gets used in processed rice products, such as ‘Hetbahn’ and ‘bibigo Porridge’, by 20% on average every year. The company purchased 9,400 tons in 2010, 13,000 tons in 2011, 38,300 tons in 2017, 44,300 tons in 2018, and 53,500 tons last year. Considering that the amount of rice used to manufacture ‘prepared meals and dishes’ and ‘box lunches’ in Korea last year was approximately 145,000 tons (Statistics Korea), CJ CheilJedang has contributed considerably to the increase of rice consumption.
With the per capita rice consumption decreasing due to changes in national dietary life, CJ CheilJedang is committed to coexisting with local farms in purchasing rice as well. Since 2010, the company has been providing a stable channel through contract cultivation with over 2,500 farms in 14 regions nationwide, such as Asan, Jincheon, and Iksan. They are also commercializing the exclusive brands of famous rice producing districts in Korea, such as Icheon and Asan, into Hetbahn products to publicize the local brands.
Last year, CJ CheilJedang completed the Rice Processing Complex (RPC) in Asan to manage the specialized rice for Hetbahn and is now receiving over 10,000 tons of rice for processed rice HMR from there. It is ‘Korea’s first rice contract cultivation, one-stop win-win model’ in which the company, community and farms have jointly built a rice processing facility and cooperate in contract cultivation, rice processing, and delivery. This helps increase income for local farms by securing a stable, long-term channel, while CJ CheilJedang can receive a steady supply of raw materials.
Continuous expansion of processed rice HMR R&D and portfolio
‘Hetbahn’, ‘HetbahnCupbahn’, ‘bibigo Porridge’, and ‘bibigo Frozen Rice’ are CJ CheilJedang’s signature steady-selling processed rice HMR products. The total sales of these products (internal sales converted to consumer price) increased by at least 20% on average each year, from KRW 468 billion in 2017 to KRW 581 billion in 2018, and KRW 700 billion last year. Sales are showing continuous growth this year as well to the cumulative sales of KRW 443 billion in January – July, with more than an anticipated KRW 800 billion in sales of just processed rice HMR products alone this year.
According to CJ CheilJedang, this achievement could be made by securing the taste and quality unique to each product based on rice processing R&D technology such as Hetbahn and capturing consumer tastes and preferences. Koreans are extremely sensitive toward rice, which means the uniform quality and taste of rice are the most important factors and competitive advantages that differentiate the product among other processed rice HMR products. The company has the only ‘customized self-polishing technology’ in Korea.
It was also effective to expand the portfolio for various processed rice HMR products to suit different consumer lifestyles. In 2015, CJ CheilJedang released Hetbahn Cupbahn and bibigo Frozen Rice, which provide a ‘one-meal solution’ in a single product anytime and anywhere. In November 2018, the company also released bibigo Porridge for professionally cooked porridge to be enjoyed on a daily basis, thereby setting and leading a new eating trend.
CJ CheilJedang’s efforts have led to the growth of the entire market for processed rice HMR products. The market size combining rice (bap), cup rice (cup bap), porridge (juk), and frozen rice (searched by Nielsen Korea) is showing double-digit growth every year from KRW 557.7 billion in 2017 to KRW 648.8 billion in 2018 and KRW 727.4 billion last year, recording KRW 391 billion in the first half of this year. The market share based on cumulative sales in the first half-year is Hetbahn 67.3% (No.1), HetbahnCupbahn 64.9% (No.1), bibigo Frozen Rice 30.7% (No.1), and bibigo Porridge 37.9% (No.2).
“Processed rice HMR that began with Hetbahn has expanded to cup rice, frozen rice and even porridge, turning into a category that contributes to the market growth for processed rice HMR products and increase of rice consumption,” said an official at CJ CheilJedang. “We’ll continue to make extended R&D investments to release various high-quality processed rice HMR products in order to satisfy consumer tastes and preferences.”