As the domestic potato harvest season comes to a close, competition in the snack industry is heating up, particularly in the potato chip segment. This rivalry has shifted from simple summer marketing to a battle for market dominance. Orion is working to maintain its lead, while Nongshim is accelerating its efforts to catch up, and Haitai Confectionery is strengthening its market strategy with new products, making this summer a critical period for the potato chip market.
According to industry sources, Orion has recently begun producing its 'Poca Chip' and 'Swing Chip' using freshly harvested potatoes from major potato-growing regions across the country. The company has contracted with over 300 farms in 24 regions, including Boseong in South Jeolla Province and Dangjin and Yesan in South Chungcheong Province, planning to use approximately 15,000 tons of domestic potatoes. The harvested potatoes will be transported directly to Orion's production facility in Cheongju and its potato storage facilities for processing.
Orion established Korea's first potato research center in Pyeongchang, Gangwon Province, in 1988, overseeing the entire process from seed development to cultivation and harvesting. In the second half of the year, Orion plans to expand its production capacity by up to 50% by adding new production facilities for Poca Chips at its Cheongju plant. Poca Chips is a flagship brand generating annual sales of 100 billion won, and the combined global sales of Poca Chips and Swing Chips reached 400 billion won last year.
Nongshim is enhancing the presence of its potato chips through unique collaborations targeting consumers in their 10s to 30s. The 'Poshling Guide' project, launched in 2023, features collaborations that reinterpret popular restaurant dishes and K-food as snacks. Following the introduction of 'Potato Chip Yeopdeok Original Flavor' and 'Jackson Pepperoni Flavor,' this year, Nongshim has expanded its lineup with 'Potato Chip Kyochon Soy Sauce Chicken Flavor,' which sold over 2 million bags within a month of its March release, and a second collaboration product, 'Potato Chip Yeopdeok Rose Flavor.'
Haitai Confectionery is collaborating with Japan's leading potato chip company, Garubi, to discover the next big hit after the Honey Butter Chip. Recently, it launched 'Garubi Potato Chip Salmon Sushi Flavor,' continuing its 'Taste of Japan in Korea' series. Garubi Potato Chips confirmed market potential in its first year of release in 2024, and last year, its market share expanded more than fivefold, establishing itself as an emerging potato chip brand.
The drive for competition in the potato chip market is fueled by the broader struggle for dominance in the snack industry. According to NielsenIQ, Orion ranked first in the overall snack market with sales of 221.7 billion won (23.83% market share) in the first half of last year, closely followed by Nongshim with 219.5 billion won (23.59% market share). The gap between the two companies is just 2.2 billion won, or a mere 0.24 percentage points, indicating a highly competitive landscape.
A key point of interest is that the rankings for overall snacks and potato chips differ. In the first half of last year, Nongshim's Shrimp Chips took the top spot in the overall snack category with sales of 57.8 billion won (6.21% market share), while Orion's Poca Chips led the potato chip segment with sales of 54.4 billion won (5.85% market share). In contrast, Nongshim's potato chips generated only 17.2 billion won (1.85% market share), about one-third of Poca Chips' sales. To reclaim the top position in the snack market, Nongshim needs to improve its relatively weak potato chip competitiveness, while Orion must maintain its advantage in potato chips to stay ahead in the overall snack market.
According to the Korea Agro-Fisheries & Food Trade Corporation, the domestic potato snack market is valued at 443.6 billion won, reflecting a 1.1% increase from the previous year, indicating continued growth. The strong loyalty to domestic brands is also a factor that has prevented global potato chip brand Lay's from gaining significant influence in the market.
An industry insider stated, "Potato chips are one of the most fiercely competitive categories in the snack market, and companies are likely to continue focusing on raw material management and product differentiation."
* This article has been translated by AI.
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