Korean bakeries earn their crust overseas, build more plants

Industry

Published: 06 Sep. 2023, 13:42 Updated: 06 Sep. 2023, 17:25

Korean bakeries earn their crust overseas, build more plants

A rendering of CJ Foodville's U.S. factory which is to be built in Gainesville, Georgia, by 2025 [CJ FOODVILLE]

Big Korean bakeries such as CJ Foodville and SPC are expanding manufacturing facilities abroad to meet increasing demand for their products.

CJ Foodville, the operator of the bakery chain Tous les Jours, is investing over 50 billion won ($37.5 million) to build its first bakery plant in the United States.

The plant will be built in Gainesville, Georgia, encompassing an area of about 90,000 square meters (22.23 acres). Construction is scheduled for completion by 2025.

"The factory is expected to have an annual production capacity of more than 100 million units of frozen bread and cakes," CJ Foodville stated in a press release Wednesday. "Once production commences, it will serve as a pivotal production hub for the expanding network of Tous les Jours franchise stores in North America."

CJ Foodville currently manages 100 Tous les Jours branches across 26 states in the United States. With the newly built factory, the company anticipates 1,000 stores in the country by 2030.

The bakery's U.S. investment comes on the back of solid profit generated from the region.

In 2022, CJ Foodville reported 261 billion won of operating profit, with half coming from global markets such as Indonesia and Vietnam. Notably, its U.S. subsidiary managed to stay in the black for five consecutive years since 2018.

"Building on a strong foundation of profitability, we have decided to establish a U.S. factory to enhance our production and supply capacity in response to the expanding scale of the Tous les Jours business in the U.S.," a spokesperson for CJ Foodville said. "Leveraging our outstanding product quality in various bread and cakes, we aim to establish Tous les Jours as a globally beloved bakery brand, transcending borders and winning the hearts of consumers worldwide."

In contrast, local bakery brands in Korea have faced challenges in expanding domestically due to regulations designed to protect small neighborhood businesses. Brands like Paris Baguette and Tous Les Jours attracted local consumers abroad by offering a wide variety of more than 300 different products in a single store, a stark contrast to the limited selection typically found in local bakeries, and by featuring unique cake designs.

A rendering of SPC's Malaysia factory that is to be built in Johor Bahru by the end of this year [SPC]

CJ Foodville's competitor SPC, which runs Paris Baguette, is on track to complete its Johor Bahru factory in Malaysia within this year after a 40 billion won investment.

The Johor Bahru factory is halal-certified and is capable of producing over 100 items, including bread, cakes and sauces.

With the factory, SPC aims tap into the global halal market, including Southeast Asia, where it already has a presence, as well as its future ventures in Middle Eastern countries. According to SPC, the halal market represents 24 percent of the world's population, totaling 1.9 billion people.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]