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Rich Korean Food's '食食 Challenge'...I've also sewn a stand at the U.S. National Mart

- 'Frozen K Food Aid' Goes to Innovation Succession Company
- Lee Sang-kyu, CEO of the 1988 Seoul Olympics, started a business based on reports of foreigners eating pancakes and side dishes
- Heavy-duty bandits are also mass-produced, competitive with their own menus and their own facilities ↑
Joining Vice President Lee Ji-in, 

- 'Second Generation of Management', Expanding the Market by Developing Customized Products, Entering Trader Joe's and Costco

When there was no word for "K-food." Foreigners started to take interest in Korean food during the 1988 Seoul Olympics. Many foreigners visited Korea and foreign media started paying attention to Korean food, which was unfamiliar at the time.

At a time when the globalization of Korean food is in its infancy, a young man in his early 30s who was working as an employee of a food distribution company witnessed the possibility of exporting Korean food. At that time, he was supplying seafood to the Olympic Village and Family Town in Seoul, and saw foreigners enjoying Korean food such as jeon and japchae, and came up with frozen Korean food as his business item. After conducting market research for seven years, he founded the company in 1995. The company was named Saongwon after the government office that was in charge of royal cuisine during the Joseon Dynasty. This is the story of the founder of Saongwon Lee Sang-gyu (70). The company produces large-scale Korean traditional home food such as jeon and side dishes and exports them to more than 20 countries around the world.

Direct facility design for differentiated products

Lee established his management philosophy of "making products that others do not make" from the start of his business. He believes that small and medium-sized enterprises (SMEs) that are just starting out should come up with products that are not being sold by existing large companies in order for them to succeed. This is why the company does not sell dumplings, pork cutlet and chicken, which are the most common frozen foods.

Lee's strategy hit the bull's eye in the Korean market. In 1996, a year after its foundation, elementary, middle and high school catering companies started to purchase bandits from Saongwon in bulk. Until Saongwon's products were released to the world, catering companies had never put bandits on the menu. Since then, Saongwon has expanded its business by expanding its suppliers to cafeterias of major Korean conglomerates.

The increased volume of orders was both an opportunity and a crisis for the company. The company now faces a difficult situation where it is difficult to fill the volume with internal personnel without automation of facilities. Lee visited major equipment companies and asked them to produce facilities suitable for the menu of Sa-won, but was repeatedly rebuffed. Some answered that it was not profitable to design facilities only for Sa-won because other food companies did not produce similar products.

CEO Lee brought in European crepe cooking facilities in 2011 and renovated them to suit Korean food. "We had no choice but to design facilities independently as we manufactured products that were not produced by other food companies," he said. "We will be the only small and medium-sized companies that build their own facilities and operate engineering organizations inside."

a second-generation businessman with strong export capabilities

Although the company has rapidly expanded its business in Korea with competitive menus and equipment, Lee's first goal of "globalization of Korean food" was not easy. His inability to speak a foreign language was a big barrier. When a foreign buyer visited a booth at a food fair, he often used body language or asked for help from the staff at the booth next to him.

Lee Jee-in, the second-generation manager, made a breakthrough in the expansion of the company's overseas sales channels. Lee, who is fluent in Japanese and English, joined the company as the head of its overseas sales team in 2011 and communicated with foreign buyers in person. Since joining Lee, the company's exports have increased from 1 billion won in 2011 to 17 billion won last year. It received the top 5 million dollar export in 2019 and the top 10 million dollar export in 2020.

The channel that Vice President Lee focused on is Trader Joe's, which is considered the "gateway to export." The U.S. grocery store chain is considered a distribution channel that is particularly difficult to enter new stores as it carefully selected some items. It is common for other companies to trust the quality of their products once they succeed in entering the store due to high barriers to entry.

Development of the U.S. and China as a strategy for localization

Lee developed the first customized vegetable pancake at Saongwon in 2013 to enter Trader Joe's. He was advised by a Korean vendor in charge of entering Trader Joe's that there will be demand for vegetable pancakes in the U.S. Many people questioned whether plain vegetable pancakes without kimchi or seafood would be popular, but 100,000 bags of initial production were sold in a month. Now, it has become a profitable product that sells 3 million bags a year. "Vegetable pancakes are not available in Korea," Lee said. "This is the first successful case of a local customized product." Costco's entry into the market also accelerated its overseas expansion. Since Costco's entry into Korea in 2017, it has started supplying products to overseas Costco such as Taiwan (August 2019) and China (October 2019).

Lee will take the helm to mark the 30th anniversary of the company's founding next year. Lee's goal is to become a more global leader after taking office. "We will expand our overseas sales organization and increase exports by training regional experts such as the Americas, Europe, and Asia," he said.