CJ Foodville aims to outdo McDonald's, Starbucks
CJ Foodville CEO Jung Moon-mok speaks during a press conference at the firm’s multi-brand restaurant, CJ FoodWorld, at the COEX Mall in southern Seoul, Monday. Jung said the food and beverage unit of CJ Group will surpass McDonald’s, Starbucks and other multinational food firms in sales. / Courtesy of CJ Foodville
By Lee Hyo-sik
CJ Foodville is aiming to outdo McDonald’s, Starbucks and other global food and beverage giants by opening thousands of more stores abroad, the company CEO said Monday.
The food and beverage unit of CJ Group, which runs about 2,600 stores at home and abroad under 12 brands, plans to invest hundreds of millions of dollars to boost its presence in China, the United States, Southeast Asia and elsewhere.
“We will be able to exceed McDonald’s, Starbucks and other multinational food and beverage companies if we successfully execute our expansion plans,” CJ Foodville CEO Jung Moon-mok said at a press conference, marking the opening of CJ FoodWorld, the firm’s multi-brand restaurant, at the COEX Mall, southern Seoul.
“We will first become one of the world’s top 10 global food companies in 2020 by earning 6.8 trillion won ($5.9 billion) in sales. By then, we expect to operate about 7,300 stores here and abroad,” Jung said. “We are confident that we will eventually emerge as the world’s No. 1 through our strategy of fostering a group of competitive brands, which will create synergy with one another. This is what makes us different from single brand firms like McDonald’s.”
Currently, the company runs 288 stores under four brands ― Bibigo, TwoSome Coffee, Tous Les Jour and VIPS ― in 10 foreign markets. At home, it has about 2,300 stores under 12 brands.
In 2015, CJ Foodville earned 1.3 trillion won in sales. It generated 11 percent of its sales outside Korea but plans to increase the ratio to 52 percent by 2020.
“We will do whatever it takes to turn Bibigo, Tous Les Jour and TwoSome Coffee into beloved consumer brands across the globe. We are at the front of the nation’s campaign to globalize Korean cuisine,” Jung said. “We will increase the number of our stores abroad to 2,000 by 2020. We will mobilize most of our resources to bolster a presence in China, the United States and Southeast Asia, while exploring business opportunities elsewhere.”
The company has to focus on foreign markets to achieve a sustainable growth because the domestic food industry has remained in the doldrums over the past few years, according to the CEO.
“To find a breakthrough, we have to head overseas and secure growth engines,” Jung said. “At home, things have remained quite unfavorable for food companies like us. Ever since the sinking of the ferry Sewol in 2014 and the Middle East Respiratory Syndrome outbreak in 2015, the local food and beverage market has failed to rebound.”
Falling birthrates, increasing regulatory risks and other unfavorable factors have also made it more difficult for CJ Foodville to grow, he said, adding that it has no other choice but to venture into foreign markets.
“We will use the domestic market as a test bed before introducing new products and services to foreign markets. We will also focus on maintaining our competitive edge over our local rivals, while enlarging our size in China and other countries,” the CEO said.
Touching on CJ’s recent bid to acquire McDonald’s, Jung said CJ needs to learn the U.S. fast food chain’s knowhow on serving meals quickly at competitive prices.
“Nothing has been decided yet as to our bid to acquire McDonald’s. It is at its infant stage,” the CEO said. “I don’t know whether we will acquire the hamburger chain or not. But there are certainly things that CJ can learn from the fast food giant.”