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CEO Interview_Kombucha

Kombucha is all the rage around the world, starting with the US, praised for its health benefits and even good flavor. In this spirit, we sat down for an interview with Hwang Jin-soo, the CEO of Core Bio Inc., who aspires to spread the trend of kombucha in Korea the right way.

Q. I am aware that Core Bio Corp. entered the National Food Cluster of Korea [as a foreign invested company] and has completed factory construction. What was your motivation to bring your business here?

 

A. Freshico, the first company that I ran, was B2B based. B2B offers a very stable business structure, but the stability does not promise the same degree of growth potential. As we estimated that we need a B2G product to promote growth, we needed new plants and standards for the B2G infrastructure. As luck would have it, we were informed that the National Food Cluster is going to be completed nearby.

 

Q. What benefits have you received from the National Food Cluster Support Center following your entry?

 

A. The most significant [benefit] would be R&D. Our fermented beverage ‘Kombucha’ was a large-scale project to be produced for the first time in Korea, which was difficult to carry out in the initial stage. We thus received support funding through the R&D fund matching program provided by the National Food Cluster. We were also referred to Professor Seo Hyung-joo of Korea University, along with many other experts to help us release the product without any issues.

 

Q. So did you receive assistance since the beginning?

 

A. We started with the transfer of technology from the US-based Buchi, but were in desperate need of help in localizing Kombucha to cater to the Korean market. Every time there was a need, the National Food Cluster was there to help us, from research supports to funding, resulting in the release of our Kombucha product according to plan.

 

Q. For many Koreans, ‘Kombucha’ may seem strange and unusual. Is there any particular reason that you chose Kombucha?

 

A. I first noticed the point where social trends in life have changed. People are increasingly seeking healthy lifestyles. And the most important thing for healthy living is food and drink, right? But most of the beverages in the Korean market are made of distilled water with artificial flavors added. At the same time, in order to advance into new fields, I figured that we would have to find items with high entry barriers to other similar products. While searching for fermented drinks, I came across ‘Kombucha,’ a fermented drink that is highly popular in the US as a diet drink. Celebrities like Miranda Kerr, Lindsay Lohan, and Jessica Alba favor this drink. That naturally drew my attention to this tea, and I decided it was ‘the one’ after I found out that the Kombucha tea tastes even better than I had imagined as a functional drink. It is hard for it to be picked up by consumers if it doesn’t taste good, regardless of its health benefits. You’ll know if you try it; Kombucha is a naturally fermented tea for a sour, sweet, and fresh added flavor with a natural carbonated taste that makes you want more.

 

Q. There are a lot of fermented drinks on the market. If so, what would make Kombucha different from the rest?

 

 

A. There are many stand-out features that separate Kombucha from other fermented beverages currently on the market, but I would like to point about the difference between the existing Kombucha and our Kombucha. The Kombucha that we make is functionally different from the existing imported Kombucha. For example, while other companies typically invest a billion won to produce 30,000 bottles per day, we invest 10 billion won to make the same amount in a day. Our process of preparation, production, and results is on a whole different level. I believe that our Kombucha offers distinctive features as a trendy beverage of the future, such that it is selected by celebrities around the world who have highly selective tastes and preferences.

 

Q. What was your focal point in the production of Kombucha to come up with a differentiation strategy?

 

A. Most of the Kombucha products imported to Korea are sterilized and stripped of bacteria because they cannot be imported in their naturally viable state due to the long distribution process. They are made to be distributed at room temperature. That’s why I wanted to introduce Kombucha to Korea just as it is in other countries where it is popular. It may sound like a reckless bet if the facility investment cost us 10 billion won for the daily production capacity of 30,000 bottles, but we believe that we are selling value. That value is exactly what I was betting on.

 

Q. We’d like to hear your story on how you started your business.

 

A. At first, I was planning to start with the Japanese fermented beverages with one year of preparation, and one of my acquaintances in San Francisco told me that the fermented drinks at organics stores in the area are very well-received by local consumers. At the time, I listened to it half-heartedly because I had my own fermented drink ready. I then ended up visiting San Francisco again exactly one year later, and that acquaintance asked me whether I recalled what he had told me about the fermented drink. He added that the drink was so popular that it had started with the price tag of US$1.85 and now cost US$3.85. That’s when I first tried the tea, and it felt so good. It was so good that I could forget all about the Japanese fermented beverages that I had been preparing to launch. Yes, that was Kombucha.

 

Q. Kombucha must have been pretty impressive for you to forget about the Japanese tea line you were preparing.

 

A. These kinds of teas have a good functional quality, like a medicine; it should still taste good though, because it is a drink, not a medicine. Kombucha was perfect for this because it tastes so good! It took me four years to get it launched because I tasted all sorts of Kombucha tea around the world before I finally found the one that would cater most to the Korean palate. The ingredients are all organic, and we also use the green tea and black tea made by Osulloc.

 

Q. I have heard that the key to the production of Kombucha is the 4th stage fermentation process. Can you tell us more about this 4th stage fermentation method?

 

A. Kombucha contains substances called glucuronic acid and DSL. Glucuronic acid is a detoxifying substance that is the base of ‘Ursa,’ a well-known detox product in Korea. That means it helps to relieve hangovers, too. Meanwhile, DSL is an anticancer substance found only in Kombucha. We worked with Professor Seo Hyung-joo at Korea University and applied for a patent that boosts glucuronic acid and DSL by 200% using the 4th fermentation process. That’s the key.

 

Q. Please share with us your most memorable moment from your four years of research and development experience.

 

A. The kombucha that I experienced for the first time in the US didn’t suit the palate of Koreans. It had a very strong sour and carbonated taste. Thus, the most memorable moment would be finding that point of bliss that we’ve been working toward for over a year. That point came when we used the most ‘Korean’ ingredients.

 

Q. What do you think is the most important value in operating your company, Core Bio Inc.?

 

A. I have run multiple companies so far, but the most important value in running a company is undoubtedly people. Networks and relationships are all created with people, and the rise and fall of a company is attributed to human influence. I had actually made a misjudgment once while running Freshico, but my people helped me overcome it. That’s what made me believe even more that the people are the most crucial value. At the same time, I think that morals are especially important for food companies.

 

Q. For the final question—I assume there must be quite a few companies considering an option to find their place in the National Food Cluster. Is there anything you’d like to tell them to help them benefit from your experience?

 

A. Our company has indeed benefited a lot ever since we found our place in the National Food Cluster. We don’t have an academic background in food, so we had no network around us. That’s where we were referred to so many field experts, from the first stage until product release. The cluster also provided subsidies for R&D funds, assistance in patent application, and even minor matters like setting up a concept. I believe that any food company in Korea would do well to join the National Food Cluster.

 

 

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