Just up until a few years ago, when it came to the western-style doughnut, the widespread feeling was "too sweet, too greasy, and too fattening."
The "well-being" bug that spread through Korean society didn`t help.
But today, many Korean consumers have submitted to the temptation of the sweet treat. For the past three years, the Korean doughnut market, currently valued at about 300 billion won ($222 million), has expanded 30 percent annually. The industry projects the market to expand two-fold, stressing its attractiveness and latent growth potential.
They say the snack, unlike other dining-out businesses, is less sensitive to the economic conditions, as it is considered a gift low cost.
Korea`s promising doughnut market can be owed to consumers like Kim Hye-min, a 24-year-old working woman, who has grown fond of western foods and culture.
"My friends and I really like doughnuts, especially with a cup of coffee," Kim said. "Calories, of course, are a concern, but we can enjoy them as a meal replacement, such as for breakfast or lunch," she added.
Industry experts say it was only last year that the market officially set into full-fledged expansion mode.
One of the latest entrants is U.S.-based Doughnut Plant New York City. The family-recipe doughnut company dating back to 1934, known for its wholesome recipe, creation of rustic yet mouth-watering shapes and generous portions, made its Korean debut in November 2007. Doughnut Plant New York City just opened its 11th outlet at Incheon International Airport on Tuesday.
For the head of DPNYC`s Korea venture, Yoon Sang-min, it was love at first sight. During one of his frequent trips to Japan three years ago, he had come upon a DPNYC shop that was hustling and bustling. A long customer queue forced him to wait to place his first order. The wait was worth it.
Yoon said he had never sunk his teeth into a more delectable doughnut. His unforgettable first impression made him persevere until he achieved securing a joint venture with Bigeats Co., the Japanese company with the license to operate DPNYC in the Asian country.
After setting up Bigeats Korea Co. in 2006, Yoon opened the first DPNYC outlet in Seoul`s Myeong-dong area, the shopping hub downtown.
So what gave the 45-year-old confidence in trying out his home market?
"It was just too good to ignore. Made of all natural ingredients, no artificial flavors - or even eggs, for the vegans - and the natural shape of the doughnut from being hand-cut all made the brand unique," Yoon told The Korea Herald.
He said that the timing could not be better to enter the business because not only have Korean consumers grown to accept the Western treat, but growing food-safety issues also have prompted them to be more concerned and picky about quality.
"People will only seek better-quality products because of growing awareness of food-safety issues," Yoon stressed.
Koreans were first locally exposed to the western culture of coffee and donuts when Dunkin` Donuts opened its first store in 1994 in the Seoul tourist district of Itaewon. But it was its second attempt in Asia`s fourth-largest economy after an intial failure in 1992. Industry experts say the most likely reason for the failure was bad brand management.
The second try, however, has proved a phenomenal success. The Korean unit of the franchise was operating 630 outlets as of November. The Korean market is also the second-largest market of Dunkin` Donuts in terms of sales. The brand, claimed to be the world`s largest coffee and baked-goods chain, commands over 90 percent of the local doughnut market, according to SPC Group, which operates Dunkin` Donuts Korea.
The United States is the franchise`s largest market boasting over 5,540 stores, while its neighbor, Canada, has only 79. The brand`s third-largest market is the Philippines with about 400 stores.
The company owes its success to localization and provision of a diversity of products, which include more than 50 different doughnut flavors, a variety of coffee beverages, and other baked goods like bagels, muffins and cakes.
Industry experts, like Yoon, attribute the wide public reception of their products to the widened awareness of global brands, along with their prices, and to the westernizing tastes of Koreans. Market opening and greater overseas travel opportunities have also made locals yearn for American foods and consumption habits.
Underscoring the positive response to doughnuts, once shunned and distanced by consumers, is that three of the four major players are American.
The other American rival is Krispy Kreme, which, when it made its debut in December 2004, captivated consumers with its hot and fresh doughnuts made on-site with a production facility that offers visitors a theatrical view of the whole preparation process.
Krispy Kreme currently has 30 stores, and its first-year sales in 2005 that totaled 10 billion won is estimated to grow six-fold to 60 billion won this year, according to Lee Heon-ho, marketing manager of Lotte Shopping Co.`s Krispy Kreme Doughnut Division.
The fourth major competitor is Japan-based Mister Donut. This chain also boasts a similar in-store production facility that allows consumers to directly see, smell and gain trust. Mister Donut also differentiates itself with its wide array of localized flavors, which features rice-based doughnuts. GS Retail, which operates the local unit, plans to raise the number of stores from 12 to at least 30 next year.
Yoon says Doughnut Plant New York City is aiming to open an additional 15 stores next year.
Another recent U.S. doughnut company to jump into the Korean market is Southern Maid, which, according to industry experts, has about four stores.
To grow closer to consumers, Yoon of DPNYC said his company will launch smaller doughnuts to make the dessert, made of all imported ingredients, more affordable and accessible to younger crowds, like those in junior high school and high school, who tend to have a tight budget.
By Yoo Soh-jung
(sohjung@heraldm.com)
[출처 : 코리아헤럴드]
