Research Article
The Rise of K-Food in the United States, Bibigo: CJ CheilJedang’s Acquisition of Schwan’s Company
1 Soonchunhyang University, 2 Chonnam National University
Published: January 2021 · Vol. 25, No. 3 · pp. 35-60
DOI: https://doi.org/10.17287/kbr.2021.25.3.35
Full Text
Abstract
CJ CheilJedang is a Korea-based company that mainly focuses on the production and sales of food. CJ CheilJedang planned to overcome the growth limitation in the domestic market and globally spread Korean food (K-food). CJ CheilJedang targeted the U.S. market with Mandu that is familiar to customers in different cultures and achieved the highest market share in the U.S. frozen-Mandu market in 2016. This study deals with the process of CJ CheilJedang that reaps considerable success in the U.S. market. Although CJ CheilJedang could not appeal to local customers initially, it launched a new product that suited American eating habits with chicken and cilantro in its ingredient due to endless research and development. In addition, all ingredients are finely grounded, making customers better feel the texture while increasing the weight of product. CJ CheilJedang achieved both localization and product quality upgrade. Mandu was sold under the name of ‘dumpling’ before the entry of CJ CheilJedang into the U.S. market, but CJ CheilJedang named it Mandu and promoted it as a representative K-food. Despite outstanding achievements, CJ CheilJedang lacked manufacturing facilities and distribution centers in the U.S. Schwan’s Company held 17 manufacturing facilities, diverse B2C and B2B distribution channels such as 30,000 groceries, restaurants, and schools. CJ CheilJedang acquired Schwan’s Company to improve its competitiveness in the local market. Immediately after acquiring Schwan’s Company, CJ CheilJedang suffered from unstable financial status and declared an emergency management system, taking various measures to improve profitability. Furthermore, The synergy effect combining the management resources of CJ CheilJedang and Schwan’s Company led them to become stabilized and grow. Since then, CJ CheilJedang has been keeping investments, confirming the site of the largest dumpling production plant in South Dakota for sustainable growth in the U.S. market.
