Hanwha Galleria is pushing for the acquisition of the premium coffee brand 'Paul Bassett.' This is part of a food and beverage (F&B) expansion strategy led by Kim Dong-seon, the Vice President who oversees Hanwha Group's retail and food service businesses and is the third son of Hanwha Group Chairman Kim Seung-yeon. Hanwha Galleria is accelerating its acquisition of food service brands by positioning food and beverage as a new growth driver.
According to industry sources from the retail and investment banking sectors on the 25th, Hanwha Galleria is in discussions to acquire equity in the operator of Paul Bassett, MZ Seed. It is reported that securing equity in MZ Seed will allow Hanwha Galleria to inherit the entire business structure of Paul Bassett, including its stores, brand, operating personnel, and supply chain.
Paul Bassett is a premium coffee brand operated by MZ Seed, a subsidiary of Maeil Dairies. MZ Seed is 92.6% owned by Maeil Holdings, the holding company of Maeil Dairies. Last year, it recorded sales of 159.9 billion won and an operating profit of 7.9 billion won.
Under Kim Dong-seon's leadership, Hanwha Galleria has been making aggressive investments in the food and beverage sector as a core growth pillar for the group in recent years. By leveraging F&B, which is relatively less affected by consumer slowdowns compared to department stores with a high proportion of fashion sales, the company is seeking to expand its performance.
In 2023, Hanwha Galleria introduced the U.S. burger brand 'Five Guys' to the domestic market. It currently operates five stores in the country and plans to expand to Japan this year. The sales of its subsidiary, FJ Korea, which operates Five Guys, reached 46.5 billion won last year, quadrupling from the previous year's figure of roughly 10 billion won. During the same period, operating profit turned positive at 3.37 billion won.
Along with this, Hanwha Galleria is operating the wine specialty store 'Vino 494' at six locations nationwide and has expanded to include a VIP-only store. This year, it plans to apply for the trademark of the ice cream brand 'Benson' and open a store in Apgujeong, Gangnam-gu next month. Last year, the food and beverage sector of Hanwha Galleria recorded sales of 64 billion won, more than six times the previous year's figure of 10.4 billion won.
Related acquisitions and infrastructure investments are also active. In June of last year, Hanwha Solutions' subsidiary, the social enterprise Hanwha BNB, which operates 'Beans & Berries,' was acquired for 5.6 billion won, and in September, the beverage manufacturer Pure Plus was bought for 20 billion won. Pure Plus is a company that produces and exports non-alcoholic beverages such as juices, generating annual sales of 21 billion won (approximately $15 million) across 60 countries worldwide, including the U.S. and Nordic regions.
Paul Bassett is considered a successful case of premium positioning among domestic coffee brands, recognized for securing a loyal customer base while implementing a high-end strategy. Analysts expect that if Hanwha Galleria secures Paul Bassett, it will gain significant momentum in its franchise business, following its burger and now café offerings.
In response, representatives from Hanwha Galleria and MZ Seed said, "We have not reviewed the acquisition of Paul Bassett."