Lotte Foods buys stake in Food Assemble

Lotte Foods' headquarters in Yeongdeungpo District, western Seoul. [LOTTE FOODS]

Lotte Foods announced Monday it acquired a 19.6 percent stake in meal kit start-up Food Assemble for 6.5 billion won ($5.27 million) to widen its product offerings.

Established in 2018, Food Assemble finished building its third factory in January, which makes it the second or third local meal kit company by capacity, according to Lotte Foods. Meal kits contain pre-portioned ingredients and seasonings to make a specific dish.

Lotte Foods says the investment will help them increase its meal kit offerings.

It entered the market in February, but only has seven varieties of meal kits including kits to make pasta and spicy stir-fried rice cake, tteokbokki.

“For meal kits, it’s important to know customers’ preferences and swiftly supply new products to various retail channels,” said a spokesperson for Lotte Foods. “The partnership with Food Assemble will allow us to acquire expertise to develop our meal kit business over the mid- to long-term.”

The company has been downsizing some food businesses, including its pork brand Pork Well, which was halted entirely last October. The meal kit business is one area it has been focusing on.

The company invested 93 billion won and finished building an additional production facility in its Gimcheon plant in North Gyeongsang last May. It announced the facility will be used to make meal kits and homemade meal replacement products, referring to substitutes for home cooking that include ready-to-eat meals.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]