Orion Strengthens Market Presence with Innovation and Tradition

Orion, a prominent player in the snack industry, continues to strengthen its market presence through a blend of innovation and tradition. The company recently announced the production of 'Poca Chip' and 'Swing Chip' using fresh domestic potatoes sourced from Jeollanam-do, Chungcheong Province, and Gangwon-do. From Jun-24 to Nov-24, Orion plans to purchase around 15 thousand metric tons (mt) of potatoes from 320 local farmers, emphasizing the importance of quality raw materials.
Figure 1. Orion's new product "Poca Chip, Swing Chip".

The popularity of Orion's potato chips, known for their freshness and nutritional value, created consumer demand last summer, and a similar response is expected in 2024. In 2022, Orion's Poca Chip ranked as the second best-selling snack with sales of USD 66.17 million (KRW 92.1 billion) according to the Korea Times, highlighting its enduring demand. Other products like Squid Peanut and Kobuk Chip also secured spots in the top 10 best-selling snacks list, showcasing Orion's ability to cater to diverse consumer tastes.

Orion's commitment to quality and innovation is further exemplified by establishing Korea's first 'Potato Research Institute' in 1988. This investment in research and development (R&D) has led to the creation of high-quality products, such as Poca Chip, made from fresh, domestically sourced potatoes. The company's strategic moves, including contract farming with 320 potato farmers and the continuous development of new products, have solidified its position as a leader in the domestic and international snack markets. Orion's products are popular in Korea and have also gained traction in markets like China and Vietnam, underscoring their broad appeal and the company's successful localization strategies.

Orion's Global and European Market Strategy

Orion, a leading Korean confectionery manufacturer, has significantly expanded its presence in global markets, leveraging localization strategies and niche products to captivate overseas consumers. As the domestic market faces challenges due to a declining birthrate, Orion has targeted populous countries such as China, India, and Vietnam.

In 2023, Orion's overseas sales reached USD 1.38 billion (KRW 1.854 trillion), accounting for 63.4% of the company's total sales. This success is due to the company's focus on regional tastes and cultural norms. For instance, Orion developed jelly-making technology that maintains product quality in hot climates, enabling its products to dominate 70% of local retail channels in Vietnam. This technological advancement allowed Orion to succeed, whereas European competitors, like Haribo, struggled due to heat sensitivity.

Figure 2. Orion Mygummy

Orion's Vietnamese branch, Orion Vina Food, has been highly profitable, earning over USD 35.92 million (KRW 50 billion) for the past five years, according to Korea JoongAng Daily. The profits are reinvested to expand production lines in Korea and support new ventures, including a bio business in China.

In Europe, Orion aims to penetrate the market further by leveraging its established infrastructure and successful localization strategies. The company's efforts are part of a broader trend among Korean confectionery manufacturers to diversify and expand internationally, driven by a relatively small domestic market and the promising potential of larger, populous countries.

Orion and other Korean confectionery brands continue to innovate and invest in R&D to meet the diverse needs of global consumers, positioning themselves as competitive players in the international market.