Lotte Wellfood to produce Pepero in India

South Korea's Lotte Wellfood Co. announced on Wednesday that it plans to build a Pepero production line in India. Pepero is a thin cookie stick with compound chocolate dipped in the outer layer.

The company will invest 2.1 billion rupees ($25.3 million) to set up an automated Pepero production line in the factory of the local subsidiary Lotte India, located in Haryana State near New Delhi in northern India.

It will secure unused space within the factory to create the production facility and plan to start full-scale production of locally popular products such as Original Pepero and Crunky Pepero in mid-2025.

While Lotte Wellfood has so far produced and exported Pepero exclusively from South Korea, having a production facility in India will enable them to directly source volumes locally.

The company aims to expand the Indian market and export to neighboring countries through the establishment of this production facility.

The Indian confectionery market is estimated to be around $12.7 billion. Lotte Wellfood plans to consistently develop locally specialized products reflecting Indian food culture and climate.

A notable example of localization is incorporating plant-based marshmallows into Choco Pie, reflecting India's vegetarian culture.

The company intends to focus on strengthening capabilities to nurture Pepero as a global brand, following the success of Choco Pie. For Choco Pie, it will initially target the premium market using the existing distribution network and later expand into smaller traditional channels.

Lotte Wellfood entered India in 2004 by acquiring the Indian confectionery company Parrys. It was the first South Korean firm to enter the Indian confectionery market.

Lotte India's revenue increased from $69.6 million in 2022 to $80.6 million last year.

Write to Hyeong-Ju Oh at ohj@hankyung.com