Lotte, Orion in Russian choco pie showdown

A time-old rivalry between snack giants Orion and Lotte over a popular chocolate-and-vanilla snack is being rekindled in the overseas markets, most recently in Russia where a copycat version is threatening the original.

In 1974, Orion was the first in Korea to launch the choco pie, which is a small round chocolate-flavored snack with a marshmallow center. Five years later, the Lotte choco pie made its debut. The latter was obviously a copycat product, although Lotte begs to differ.

Orion was not happy but did not appear to make a big fuss, especially since its brand of choco pie had a market share of over 20 percent. Lotte, in contrast, had less than 5 percent. Orion also had dominance abroad, particularly in regions such as China.

This year, however, Lotte surpassed Orion for the first time in their choco pie sales in Russia.

During the first seven months of this year, Lotte logged 25.4 billion won ($22.8 million) in sales, compared to 24.2 billion won of Orion. In June and July, Lotte sold 6.9 billion won, outpacing Orion’s 5.7 billion won.

“Supplies have been growing since we established a local production factory in 2010,” said a Lotte official.

Orion downplayed its rival’s performance, saying Russian sales make up only a small portion of overall overseas sales, which stood at 215 billion won last year.

Industry watchers say the choco pie competition is likely to become more cutthroat in Russia, an area that serves as a crucial foothold for businesses attempting to enter Eastern Europe.

“In overseas markets, most customers have no idea which one is the original maker. All Lotte has to do is cut their prices, just as they do in the domestic markets,” said an industry source, declining to be named.

By Lee Ji-yoon (jylee@heraldcorp.com)