"Five Guys" Sparks Unarmed Burger War in South Korea.

"Five Guys" Sparks Unarmed Burger War in South Korea.

Posted: July 10, 2023, 15:33:19 Last Updated: July 10, 2023, 17:34:02

Kim Dong-seon, Strategy Director of Hanwha Galleria, delivers an opening speech for Five Guys. Photo | Yonhap News

[SportSeoul | Reporter Choi Gyu-ri] Over the years, large domestic corporations have brought famous international handmade burger brands to Gangnam, opening the curtains on a "burger war" without guns in the domestic burger market.

One of the most buzzed-about brands is the newly opened 'Five Guys', dubbed as "Kim Dong-seon's Burger". The franchise is managed by the subsidiary, FG Korea, and Hanwha Galleria took a full two years to launch it domestically.

During the launch process, Kim Dong-seon, the strategy director of Hanwha Galleria, displayed his determination by donning an apron and experiencing the entire burger preparation process. As Kim is the third son of Hanwha Group Chairman Kim Seung-youn and Five Guys is his first business venture, he has poured his passion into this enterprise.

Did Kim's unwavering determination pay off? Five Guys sold 15,000 burgers within the first week of opening. Simply calculated, it averages to 2,000 burgers per day, selling approximately 200 burgers per hour.

Perhaps sensing a massive consumer influx to Five Guys, SPC's 'Shake Shack' – a premium burger chain that has been established in Korea since 2016 – relocated its first store from Sinnonhyeon Station to Gangnam Station. SPC explained this move as an attempt to tap into the larger pedestrian traffic of Gangnam Station.

In 2017, seven months after its first store opening in Korea, Shake Shack achieved the highest sales worldwide and still maintains its popularity. At the time, the Shake Shack Gangnam store sold an average of 3,000 to 3,500 burgers per day, marking the highest sales among its 120 global stores. It's unusual for such a popular brand to relocate their first store, possibly in response to the presence of Five Guys.

In Gangnam Station, there is another famous handmade burger brand, 'Super Duper', a representative burger brand from the western region of the US, San Francisco. BHC, a chicken franchise specialist, opened its first store in Gangnam last year.

Based on consolidated sales in 2022, the BHC Group, which includes Super Duper, saw a 64% increase from the previous year, exceeding KRW 1.11 trillion for the first time in its history. This growth is attributed mainly to BHC Chicken and Outback Steakhouse, while the position of Super Duper Burger is still being closely watched.

Amidst the burger war in Gangnam, Seoul – the heart of Korea – between American handmade burger brands Five Guys, Shake Shack, and Super Duper, domestic value-for-money burgers like McDonald's Korea and Lotteria have also rolled up their sleeves to attract customers.

McDonald's hosted a pop-up store to launch the 'Jindo Green Onion Cream Croquette Burger'. Photo | McDonald's

McDonald's played its hand with character marketing. It collaborated with the popular MZ generation's 'Koongya Restaurants' to operate a pop-up store for the launch of the 'Jindo Green Onion Cream Croquette Burger'.

'Koongya Koongya', a character from 'Koongya Restaurants', is a TV program that was popular during the MZ generation's childhood and has recently regained popularity through SNS. McDonald's targeted the MZ generation, the main consumer base for character marketing.

Also, Lotteria recently launched the 'Ria Miracle Burger', which tastes like meat without containing any, in response to the growing positive perception and consumption of alternative meat. The patty is made from soy protein and wheat protein, the sauce uses soy instead of eggs, and the bread is also plant-based.

There is also 'Better Burger' from Shinsegae Food's No Brand, made from plant-based ingredients. Shinsegae Food refers to alternative meat as 'alternative meat' and has established it as a flagship menu.

As American handmade burger brands enter the domestic market, the established domestic burger industry has responded swiftly with various marketing strategies.

According to market research firm Euromonitor, the domestic burger market has grown from KRW 2.1 trillion in 2014 to KRW 2.96 trillion in 2020.

Industry experts predict, "Due to the COVID-19 pandemic, the demand for convenient food like burgers has increased, and the entry of various new brands into the market has likely expanded the market to nearly KRW 4 trillion." They anticipate that the burger market will continue to grow. They also explained that, "The domestic burger market is expanding consumer choices with the release of various new burger products amid intensifying competition between domestic and foreign brands."