The History of Lotte Confectionery

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Lotte Confectionery

Type

Subsidiary of Lotte

Industry

Confectionery

Founded

1967

Headquarters

Seoul, Republic of Korea

Number of employees

4203 (as of March 2012)

Website

http://www.lotteconf.co.kr/eng/

 

Lotte Confectionery (Hangul: 롯데제과) (KRX: 004990) is a South Korean company headquartered in Yangpyeong-dong Yeongdeungpo-gu, Seoul, Korea. It is a subsidiary company of Lotte Group and a sister company of leading Polish confectionery company E. Wedel after the parent Lotte group completed a takeover from Kraft Foods in June 2010.

 

Lotte Confectionery was established in 1967 and its plants are located in Seoul, Daejeon, Yangsan, Pyeongtaek and Siheung.Currently, it is the third largest chewing gum manufacturer in the world.

 

Contents  [hide]

1 History 1.1 Bubble Gum Beginnings in the 1940s

1.2 Adding Korean Operations in the 1960s

1.3 International Success in the New Century

2 Products 2.1 Confectionery

2.2 Ice Cream

2.3 Health supplements

3 See also

4 References

5 External links

 

History [edit]

 

Bubble Gum Beginnings in the 1940s [edit]

 

Although later considered one of South Korea's largest companies, Lotte's origins actually traced back to post-World War II Japan. During the war, Shin Kyuk-ho, a native of Korea, came to Tokyo to study at a technical college in 1941 at the age of 19. After graduating, Shin remained in Japan, adopting the Japanese name of Takeo Shigemitsu. By 1946, Shigemitsu decided to go into business for himself, launching the Hikara Special Chemical Research Institute. This company produced soaps and cosmetics from surplus chemicals stocks left over from the war.

 

That company, although small, provided the basis for Shigemitsu's first fortune, and within a year he had amassed enough capital to launch a new company, dedicated to production of chewing gum. Introduced by American soldiers following the war, chewing gum quickly became popular among Japanese consumers eager to embrace all things American. In 1948, Shigemitsu founded Lotte Co., with ten employees. Shigemitsu's choice of the company's name came from his admiration for Goethe's Sorrows of Young Werther, particularly the character of Charlotte. Using natural chicle, Lotte launched a number of chewing gum brands, including Orange Gum, Lotte Gum, Cowboy Gum, Mable Gum, and the highly popular Baseball Gum. The company backed up its products with strong advertising support, becoming one of the first in Japan to sponsor television programs, as well as its own baseball team and other event s, such as beauty pageants. In the mid-1950s, the company sponsored the country's Antarctic Research Expedition Team, developing a chewing gum for the effort's training program. The company then launched the gum, known as Cool Mint Gum, for the consumer market, in 1956. The gum featured a penguin on the package, which became one of the country’s most prominent consumer logos into the next century. Another Lotte sponsoring effort was the Lotte Music Album show on television, a popular music-oriented program that ran through the late 1970s. Shigemitsu expanded his production interest to include candies, cookies, and snack cakes, and by the early 1960s, the company had established itself as a rival to Japan's two largest confectionery groups, Meiji and Morinaga. The company's true breakthrough came during the 1960s, with its entry into the chocolate market. In 1964, the company launched its first milk chocolate, called Ghana, adapting Swiss-styled chocolates for the Japanese palate. The company supported this launch with a massive television advertisement campaign, firmly positioning the brand in the minds of consumers. The launch paved the way for Lotte's emergence as the number one chocolate manufacturer in Japan by the end of the century. Although Lotte had successfully established itself as a truly Japanese company--in a country where ethnicity had always been a prominent p art of the national identity--Shigemitsu had not abandoned his Korean roots. Lotte had established a presence in Korea as early as 1958, opening a factory producing chewing gum and other confectionery, as well as instant noodles, for the Korean market. The normalization of diplomatic relations between Japan and Korea in 1965, however, presented a new opportunity for the company. Lotte decided to move into Korea on a full scale, and in 1967, the company established a dedicated operation for South Korea, called Lotte Confectionery Co.[1]

 

Adding Korean Operations in the 1960s [edit]

 

It was not long, however, before Shigemitsu--or, rather, Shin--found himself in trouble with the Korean government, then still under military dictatorship. The South Korean government was then in the process of building up its military strength as part of its cold war with North Korea. Seeking to establish its own industrial defence capacity, the government approached Shin with a request for him to contribute to this effort, encouraging him to enter military production as well.

 

Yet Shin, perhaps mindful of the negative publicity that a move into arms production would bring to the company's confectionery sales, refused. The refusal brought a series of difficulties for Lotte Confectionery, which finally were resolved by the direct intervention of then president Park Chung-Hee. Rather than agree to invest in the country’s defence effort, Shin agreed to transfer the centre of Lotte's operations to South Korea. Lotte Confectionery now became the core of Shin's growing empire; nonetheless, the original Lotte Co. and the Japanese market remained the company's largest confectionery operation. [1]

 

International Success in the New Century [edit]

 

In the 1990s and 2000s, Lotte turned to the international market for further growth. The company had made its first international extension, other than in Korea, in the late 1970s. In 1978, Lotte set up a subsidiary in the United States, opening production facilities in Battle Creek, Michigan. The group's U.S. presence later expanded to include a sales office in Chicago, supporting sales of the group's chewing gums and cookies.

 

In the 1990s, Lotte turned to markets closer to home. The company established a subsidiary in Thailand in 1989, where it began producing and distributing  and confectionery. In 1993, Lotte entered Indonesia, launching a subsidiary in Jakarta. This was followed by the creation of a joint venture for the mainland Chinese market, which established production facilities in Beijing in 1994. The company acquired full control of its Chinese operations in 2005. The Philippines became part of the Lotte empire in 1995, with the launch of a sales and distribution subsidiary in Manila. One year later, the company added production and sales operations in Ho Chi Minh, Vietnam, as well.

 

Continuing product development brought the company new successes as w ell. In 1996, the company launched its Chocolate Zero, claiming to be the world's first sugarless chocolate. The following year, Lotte became the first in Japan to launch a xylitol-based chewing gum. Because xylitol, unlike other sweeteners, did not produce acid when chewed, the company was able to promote its chewing gum as a cavity-fighting product. The company's interest in developing xylitol-based products continued into the 2000s, including the launch of the Xylitol Family Bottle, a beverage containing xylitol as a sweetener. In 2005, the company launched its Lotte Notime tooth-polishing chewing gum.

 

Lotte expanded its frozen dessert operations in 2002, forming a joint venture with troubled Snow Brand Milk Products, then involved in a beef-labelling scandal. The joint venture, Lotte Snow Co., was owned at 80 percent by Lotte, and launched production of Snow-branded ice cream products. In 2005, the company expanded its operations in China, buying up control of Qingdao-based Jinhu Shipin. That move was seen as part of the group's strategy to become a major confectionery group o n a global scale. Lotte remained controlled by Shin Kyuk-ho, joined by his children and other family members. In less than 60 years, Shin had built Lotte from a small chewing gum producer into one of the world's top confectionery groups.[1]

 

Products [edit]

 

Many of Lotte's products are sold internationally in areas with Japanese and/or Korean immigrants and in Asian supermarkets around the world.

 

Confectionery [edit]

 

The confectionery line-up covers a wide range of snacks including gums, candies, biscuits, and chocolates. The Juicy Fresh, Spearmint, and Freshmint chewing gums and Lotte Ghana Chocolate have served as long-time favorites for more than four decades, while the Xylitol chewing gum is enjoying tremendous popularity since its launch, thanks to its ability to reduce the risk of tooth decay.[2]

 

Lotte Confectionery also produces the Crunky  bar [3] and the Chic-Choc cookie (a chocolate chip cookie), one of the most famous brands in South Korea. Additionally, they produce other baked snacks, including the Margaret cookie. Lotte is also well known for their cookies called Koala's March, which are small cream-filled cookies shaped like koalas, packaged in a unique hexagonal box, and Pepero, a product inspired by Pocky.

 

To extend the reach of products of both companies in China, Lotte has established a joint venture with Hershey's.[4] Also, in 2008, Lotte also took over Guylian, a Belgium company that makes chocolate.

 

Ice Cream [edit]

 

Lotte Confectionery has been taking a lion’s share of Korea’s ice cream market by offering an array of popular bar, cone, cup, pencil, and bucket ice creams that cater to all tastes. With the latest premium natural-ingredient brand Natuur, they are now offering a wider range of products, from regular day-to-day items to more sophisticated premium flavors.[5]

 

Health supplements [edit]

 

As part of the efforts to boost the well-being of modern men who live in an increasingly demanding atmosphere, Lotte Confectionery launched a health supplement brand Health 1 to produce various supplements with vitamins, minerals, granules, red ginseng extracts, and other animal- and plant-based extracts.[6]

 

See also [edit]

Economy of South Korea

List of companies of South Korea

Lotte

 

References [edit]

 

1.^ Jump up to: a b c Lotte Confectionery Company Ltd. - Company Profile, Information, Business Description, History, Background Information on Lotte Confectionery Company Ltd.

2.Jump up ^ Lotte Confectionery Products

3.Jump up ^ Lotte Crunky Crunch Chocolate

4.Jump up ^ Hershey and Lotte take aim at China U.S. and South Korean  makers launch $80 million venture BUSINESS ASIA by Bloomberg

5.Jump up ^ Lotte Confectionery Products

6.Jump up ^ Lotte Confectionery Products

 

Official website (Korean)

Lotte

 Lotte Capital ·

 Lotte Card ·

 Lotte Chilsung ·

 Lotte Confectionery ·

 Lotte Department Store ·

 Lotte Giants ·

 Chiba Lotte Marines ·

 Lotte Hotels & Resorts – Lotte World ·

 Lotteria ·

 Mybi ·

 Hanaro Card ·

 7-eleven ·

 Lotte Mart ·

 Hi-Mart ·

 Shin Kyuk-ho ·

 Akio Shigemitsu

 Lotte logo.svg

 

Categories: Lotte subsidiaries

Food companies of South Korea

Companies established in 1967

1967 establishments in South Korea

South Korean confectionery

South Korean brands

Lotte (conglomerate)

Industry

food processing

retail

financial services

electronics

petro-chemicals

and more

Founded

Tokyo, Japan (June 1948)

Founder

Shin Kyuk-Ho (Takeo Shigemitsu)

 

Headquarters

Shinjuku, Tokyo, Japan

Jung District, Seoul, South Korea

 

Area served

Asia, North America, Europe

Key people

Shin Kyuk-ho, Shin Dongbin

Revenue

-¥3,931,896 million (2011)[1]

Operating income

 -¥328,141 million (2011)[1]

Net income

 -¥191,847 million (2011)[1]

Number of employees

 South Korea: 180000

Japan: 5000

Lotte

Korean name

Hangul

롯데

[show] Transcriptions

 

Lotte Co., Ltd. is a multinational food, chemicals and shopping corporation with headquarters in South Korea and Japan. Lotte was first established in June 1948 in Tokyo, by Takeo Shigemitsu (aka.Shin Kyuk-Ho). With the money he earned in Japan, Shin expanded to his home country, South Korea with the establishment of Lotte Confectionary Co., Ltd in Seoul on April 3, 1967. Lotte eventually grew to become Korea's eighth largest business conglomerate.

 

Lotte Group consists of over 60 business units employing 60,000 people engaged in such diverse industries as  manufacturing, beverages, hotels, fast food, retail, financial services, heavy chemicals, electronics, IT, construction, publishing, and entertainment. Lotte's major operations are overseen by Shin's family in Japan and South Korea, with additional businesses in China, Thailand, Malaysia, Indonesia, Vietnam, India, USA, UK, Russia, Philippines, Pakistan and Poland (Lotte bought Poland's largest  company Wedel from Kraft Foods in June 2010). Today, Lotte is the largest confectionery manufacturer in South Korea, and is the third largest in Japan behind Meiji Seika and Ezaki Glico in terms of sales revenue when only the sales of Lotte's confectioneries are counted.

 

Contents  [hide]

1 History 1.1 Name

2 Management

3 Business 3.1 Sports

3.2 Lotte R&D Center

4 See also

5 References

6 External links

 

History [edit]

 

Lotte's first company was founded in June 1948 in Tokyo, by Shin Kyuk-ho, two years after he graduated from Waseda Jitsugyo high School (早稲田実業学校). Originally called Lotte Co., Ltd, the company has grown from selling chewing gum to children in post-war Japan to becoming a major multinational corporation.

 

Name [edit]

 

The source of the company's name is neither Korean nor Japanese, but German. Shin was impressed with Johann Wolfgang von Goethe's The Sorrows of Young Werther (1774) and named his newly founded company Lotte after the character Charlotte[2][3] in the novel ("Charlotte" is also the name of a new brand of deluxe movie theatres run by Lotte). Lotte's current marketing slogan in Japan is "The sweetheart of your mouth, Lotte" (お口の恋人,ロッテ Okuchi no koibito, Rotte?).

 

Management [edit]

Lotte Holdings Co., Ltd. – Lotte group's world headquarters – are located in Myeongdong, Seoul and Shinjuku, Tokyo. It is controlled by the founder Shin Kyuk-Ho's family.

Business [edit]

Lotte World in Seoul

Lotte Young Shopping Plaza in Daegu, South Korea

Song Seung-Jun, South Korean starting pitcher who plays for the Lotte Giants

Lotte group's major businesses are food products, shopping, finance, construction, amusement parks, hotels, trade, oil and sports.

Food Products: Lotte Confectionery, Lotte Chilsung, Lotteria, E Wedel, Lotte Ham/Lotte Milk, Lotte Samkang, Angel-in-us, T.G.I. Friday’s, Swiss Boulagerie, Lotte Cool, Lotte Fresh Delica, Lotte Pharm., Lotte Shopping Food Division

Shopping: Lotte Duty Free,[4] Lotte Shopping,[5] Lotte Mart, Lotte Department Store, Lotte-Assi Plaza[6]

Entertainment: Lotte Cinema, Lotte Entertainment (investment and distribution of domestic and international films)

Finance: Lotte Insurance, Lotte Card, Lotte Capital

Housing: Lotte Castle High Rise Apartment Complex

Amusement parks: Lotte Cinema, Lotte World in Seoul, one of the world's largest indoor theme parks.

Hotels: Lotte Super Tower 123, skyscraper in Seoul, South Korea, 2014 and Busan Lotte Tower skyscraper in Busan, South Korea, 2013, and Lotte City Hotel in Daejeon.

Trade: Lotte international[7]

IT / Electronics: Korea Fuji Film, Lotte Canon, Lotte IT, Lotte.com, Mobidomi

Heavy chemicals / construction / machinery: Honam Petrochemical,[8] KP Chemical,[9] Lotte Engineering & Construction, Lotte Engineering & Machinery, Lotte Aluminum

 

Sports [edit]

 

Lotte also owns professional baseball teams

Chiba Lotte Marines in Japan (1971–present)

Lotte Giants in Busan, South Korea (1982–present).

Lotte R&D Center[edit]

Korea R&D Center : 23,4-ga, Yangpyeong-dong, Yeongdeungpo-gu, Seoul, South Korea

Japan R&D Center : Saitama, Japan

 

E. Wedel

E. Wedel (Emil Wedel)

E Wedel.png

Type

Subsidiary of Lotte

Industry

Confectionery

Founded

Warsaw, Poland (1851)

Headquarters

Warsaw, Poland

Website

www.wedel.pl - confectionery company (Polish)

www.wedelpijalnie.pl - chocolate shops (Polish)

 

E. Wedel, known as Cadbury-Wedel Polska between 1999 and 2010, is a famous[1][2][3] Polish confectionery company, producing many varieties of high-quality chocolates, cakes, and snacks. Wedel is also a well-recognized brand of  in Poland, considered by some to be the "Polish national brand" in that market, and is the leading  brand among Polish producers with about 14% of the Polish market in 2005[4] and 11.7% in 2007.[5]

 

In June 2010 Kraft Foods sold Wedel to Lotte Group, a South Korean-Japanese conglomerate, as part of their enforced divestment program of certain parts of the Cadbury plc which it acquired in March 2010.[6]

 

Contents  [hide]

1 History

2 Cadbury-Wedel Polska

3 Lotte Ownership

4 Popular products

5 References

6 External links

 

History [edit]

 

Original Wedel building in Warsaw

 

Wedel factory in Warsaw's Praga South district viewed from Kamionowski Lake

Founded in 1851 by Karol Ernest Wedel (1813-1902), the company and its products became known in most of Central and Eastern Europe. The logo of the company is based on Karol Wedel's signature.[7] His son Emil Albert Fryderyk Wedel (1841-1919) apprenticed in  and chocolate factories in Western Europe before inheriting and expanding his father's business. His descendant Jan Wedel (d. 1960), the last member of the Wedel family to own the company, was considered "the Willy Wonka" of pre-war Poland.[8] In 1894 the company moved its main factory from Szpitalna street in Warsaw.[5] In 1934, during the time of the Great Depression, Jan Wedel opened a second factory in Praga, one of the most modern in the Second Polish Republic.[7] The company was also known for its very generous social welfare policies.[9] As one of the first in Europe, it had its own creche, kindergarten, hospital and cafeteria, and rewarded its best employees with no-interest housing loans; its model was highly acclaimed by the Polish Socialist Party.[10] Hence prior to World War II, Wedel became a successful private company, with shops in London and Paris.

 

Information tablet on Emil Wedel's residence

Jan Wedel made plans for World War II, and the company managed to continue production during the first few years of the war; it also started producing basic foodstuffs such as bread for starving Warsaw, and was the site of the underground teaching.[9] Despite the family's German ancestry Wedel refused to collaborate with the Germans, and did not sign the Volksliste; increasingly this led to him and his employees being persecuted by the Nazis.[10] The war devastated Poland and the company; the buildings at Warsaw were destroyed during the Warsaw Uprising.[9] After the war, Wedel rebuilt the factory, only to have the communist government nationalize the company.[7][9] The Wedel plant itself was renamed '22 Lipca' (22 July) after the Communist 'Independence Day' (PKWN Manifesto), although even the communists chose to retain the Wedel brand name, with products bearing both the new and old logos (particularly as after 10 years of not using the logo, all attempts at exporting proved futile).[7][10] The company was reprivatized in 1989 after the fall of communism in Poland. In 1991 it was bought by PepsiCo Foods and Beverages, at which time sales were about $50–$60 million. In 1995 sales exceeded $200 million.[11] About 10% of the products are exported, primarily to the United Kingdom, United States and Canada.[5] The Warsaw facility employed 1,100 workers in 1998.[12]

 

Cadbury-Wedel Polska [edit]

 

The original E.Wedel shop at 8 Szpitalna Street in Warsaw

Cadbury Schweppes made its initial investment in Poland in 1993, constructing a chocolate plant for its own products in Bielany Wrocławskie.

 

In 1999, Cadbury bought E.Wedel and the factory in Praga, from PepsiCo for US$76.5 million.[12][13] The Praga factory was modernised in 2007, with investment in both new laboratories and office space, as well as a new production line for the brand's flagship product Ptasie Mleczko, a chocolate  with a marshmallow like centre.[14]

 

In 2007, as part of the Wałbrzych Special Economic Zone, Cadbury-Wedel Polska started building a £100m chewing gum plant in Skarbimierz.[15] It presently produces brands such as Trident, Stimorol, V6 and Hollywood. The company also acquired rights to an additional 60 acres (0.24 km2) plot which in 2009 it started to develop as a new chocolate facility, which would take over production of brands previously made at the Somerdale Factory in Keynsham, Bristol from 2011. In 2008, Cadbury received the accolade of “Most Significant Investor in Poland” from the Polish Information and Foreign Investment Agency.[14]

 

In recent years the company has also branched out, opening a series of chocolate shops based on pre-war tradition.[16]

 

Lotte Ownership[edit]

 

In March 2010 Kraft foods acquired Cadbury plc. The European Commission insisted that Wedel be sold in order for the takeover to go ahead as a combined Kraft/Cadbury-Wedel would have too large a share of the Polish confectionery market.[17] To satisfy this demand Wedel was sold to Lotte of South Korea in June 2010. It is Lotte's first investment in Europe although they are the 3rd largest chewing gum maker in the world and are a large player in the Asian confectionery market.[18] Kraft Foods have kept the rights to the Cadbury, Halls and other brands along with 2 plants manufacturing Cadbury products in Skarbimierz.

 

Popular products [edit]

Wedel chocolate fountain and cafe at InterContinental hotelPtasie Mleczko - chocolate covered marshmallow

Mieszanka Wedlowska - assorted chocolate covered

Torcik Wedlowski - a large, circular, chocolate covered wafer with hand-made decorations

Pawełek - chocolate bar with a flavored filling that contains a small amount of alcohol

 

References[edit]

 

1.Jump up ^ Jeffries, Ian. Socialist Economies and the Transition to the Market: A Guide, page 443

2.Jump up ^ Leo V. Ryan, Wojciech Gasparski, and Georges Enderle. Business Students Focus on Ethics, page 90

3.Jump up ^ Batra, Rajeev. Marketing Issues in Transitional Economies, Page 35

4.Jump up ^ Polish confectioner finalises leading brand acquisition 10/01/2005. Retrieved on January 24, 2008.

5.^ Jump up to: a b c (Polish) Beata Drewnowska, Historia pachnąca czekoladą, 05-12-2007

6.Jump up ^ Cordeiro, Anjali (2011-06-28). "Kraft to Sell Poland Wedel Business to Lotte Group". The Wall Street Journal. Retrieved 2011-12-06.

7.^ Jump up to: a b c d (Polish) Krótka historia czekoladowej firmy

8.Jump up ^ Sweet Warsaw. Retrieved on January 24, 2008.

9.^ Jump up to: a b c d (Polish) Historia Wedla

10.^ Jump up to: a b c "Czekoladowa Dynastia". Film Polski. Retrieved 2011-12-06.

11.Jump up ^ "PepsiCo sells Wedel's chocolate business"  Industry, October 1, 1998. Retrieved on January 24, 2008.

12.^ Jump up to: a b "PepsiCo sells Wedel's chocolate business"  Industry, October 1, 1998. Retrieved on January 24, 2008.

13.Jump up ^ "PepsiCo sells Wedel brand to Cadbury Schweppes" Eurofood, February 11, 1999. Retrieved on January 24, 2008.

14.^ Jump up to: a b "Cadbury and Wedel – a Sweet Investment - Discover Poland Magazine - Travel, do business and invest in Poland!". Discoverpl.polacy.co.uk. Retrieved 2010-06-28.

15.Jump up ^ "Cadbury Schweppes Confectionery Factory, Skarbimierz". Food Processing Technology. 2009-02-10. Retrieved 2010-06-28.

16.Jump up ^ Haughney, Christine "Poland's Sweet Comeback", The Washington Post, December 26, 2004; Page P04. Retrieved on January 24, 2008.

17.Jump up ^ "Kraft sells Polish Cadbury business to Lotte Group". Forbes.com. Retrieved 2010-06-28.[dead link]

18.Jump up ^ "LOTTE". LOTTE. Retrieved 2010-06-28.

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