Recently, rice cake-based products have surged in popularity within the food industry. From chewy rice cakes to tteokbokki, a diverse array of items has flooded the market, giving rise to the term tteok pilgrimage – a quest for sought-after rice cake desserts.
Interestingly, when examining products sold under major corporate brands, you might stumble upon unfamiliar company names on the flip side of the packaging.
For example, Pulmuone’s Texture Innovation Tteokbokki lists Sejin Foods as the manufacturer. Similarly, Mijeongdang, marketed by CJ CheilJedang, is a brand developed in partnership with rice cake specialist Mijeong.
This reveals that behind the familiar big-name brands lies the technological prowess of smaller manufacturers.
SMEs to Handle Tteok Production, with Joint Efforts on R&D and Product Planning
This isn’t simply a case of big companies slapping their names on products. A closer look unveils a partnership where they jointly develop manufacturing techniques, plan products, and expand market reach.
This collaboration is partly driven by regulatory factors. The production of rice cake soup and tteokbokki rice cakes is designated as a suitable industry for small business livelihoods, fundamentally restricting new entries and expansions by large corporations.
Initially designated in 2021, the protection period has been extended until September 2031 following re-designation this year. However, exceptions exist for small businesses meeting specific criteria for original equipment manufacturing (OEM) and export-oriented production.
In this landscape, collaboration between large corporations and small manufacturers has become a viable business model.
Pulmuone reports that it produces its current tteokbokki and tteokbokki rice cake products through partnerships with small manufacturers.
A standout example is their collaboration with Sejin Foods. The two companies jointly patented a dual extrusion method, which they developed together. This innovative technique creates a chewy texture by extruding the dough at high pressure twice.
Pulmuone also supports its partners in research and development, quality control, and hygiene management. The Texture Innovation Tteokbokki line, which utilizes this technology, has been a hit. Within two months of launch, it surpassed 380,000 units in sales, capturing significant consumer interest.
This case exemplifies how the manufacturing expertise of small businesses, when combined with the product planning and sales capabilities of large companies, can lead to market success.
Mijeongdang: Blending 60 Years of Rice Cake Craftsmanship with Modern Distribution Networks
The partnership between CJ CheilJedang and Mijeong showcases how they’ve successfully nurtured a small business brand.
Mijeong, a rice cake and noodle specialist founded in Gyeongju in 1963, joined forces with CJ CheilJedang to launch the Mijeongdang brand in 2018.
They’ve since expanded their product range to include rice cake soup, tteokbokki, and convenient cup tteokbokki options.
CJ CheilJedang has provided crucial support in product planning, marketing, and distribution network expansion. They’ve also collaborated on establishing robust quality control systems and standardizing production processes.
This synergy has paid off handsomely. According to company reports, Mijeongdang has achieved an impressive average annual growth rate of 37% in the seven years since its 2018 launch.
This success story illustrates how combining a manufacturer’s accumulated expertise with a large corporation’s product development and distribution capabilities can drive significant brand growth.
Collaborative Growth: Building a Sustainable Future
These partnerships offer potential benefits for both large corporations and small businesses.
Even small businesses with exceptional manufacturing skills often struggle to independently develop new products and secure nationwide distribution. Conversely, large companies can enhance their product competitiveness by tapping into the specialized technologies and production capabilities of smaller firms.
Pulmuone supports its partners through initiatives like the Co-Growth Fund, which provides operational funding. Similarly, CJ CheilJedang’s Joyful Co-Existence program aims to bolster the competitiveness and market access of small businesses.
However, collaboration alone doesn’t guarantee mutual growth. True symbiosis requires ensuring small manufacturers receive stable orders, fair profits, and equitable sharing of technological advancements.
The joint patent between Pulmuone and Sejin Foods, along with CJ CheilJedang and Mijeong’s brand development efforts, stand out as positive examples in this regard.
These cases demonstrate the potential when large corporations’ market reach combines with small businesses’ manufacturing expertise, showcasing how such partnerships can thrive in the marketplace.
When a consumer picks up a package of tteokbokki, they might be surprised to learn about the collective effort and technology from multiple companies behind it. The hope is that these collaborations evolve beyond one-off product developments, paving the way for sustainable, mutual growth between large and small enterprises.