Orion goes after Post, Kellogg's

By Park Jae-hyuk

Orion and Nonghyup jointly launched their new ready-to-eat cereal brand, Market O Nature, Tuesday, posing a threat to Dongsuh Foods' Post brand and Nongshim Kellogg.

“Foreign brands, such as Kellogg's and Post, still maintain dominant positions in the nation's cereal market, but we highly appreciate Nonghyup's excellent supply chain management, as well as our confectionery expertise and supremacy in the Southeast Asian market,” Orion Vice Chairman Huh In-cheol said in a press conference at Market O Restaurant in southeastern Seoul. “We were therefore pleased to agree with Nonghyup's request for a partnership two and a half years ago.”

Orion and Nonghyup established a joint venture in 2016 and invested 62 billion won ($55.2 million) in opening a factory in April on a 9,900-square-meter property in Miryang, South Gyeongsang Province. Orion organized a taskforce for the new brand as well.

The factory processing rice, fruits and other domestic ingredients supplied by Nonghyup has been producing three types of granola cereals and three types of granola bars. Orion will also come up with two types of pasta chips in September.

The confectionary aims to develop Market O Nature into a brand posting 100 billion won in annual sales within the next five years. The company plans to expand the brand's presence in foreign markets such as China's.

“When I visited China earlier this year, Chinese businesspeople said the Choco Pie maker's new snacks will be a big hit in their country,” Nonghyup Chairman Kim Byung-won said. “They told me to bring the new products to China right after its release.”

According to Orion, the size of the nation's ready-to-eat product market has grown to 3 trillion won, but Dongsuh Foods and Nongshim Kellogg still hold large market shares. Given the number of single-person households has continued to increase, the market is expected to grow more rapidly.

However, Kellogg's market share dropped last year, as Korean consumers lost trust in its hygiene control.

Dongsuh Foods' Post brand accounts for a 50.4 percent share, up from 47.8 percent last year, while Nongshim Kellogg accounts for a 41 percent share, showing a drop from 43.6 percent last year.