Seoul F&B, a Korean producer specializing in processed dairy products, is advancing into foreign markets with coffee products with the mind as if made for one’s family member. The company is the first Korean producer taking up the challenge of breaking into the beverage market of Thailand which is dominated by Japanese products. Its flagship item is a cup coffee product with the brand name “Arabus.” It comes in three flavors: caramel macchiato, latte macchiato, and mocha. Since the first shipment to Thailand made in 2015, the export amount has increased to US$ 3 million thanks to favorable responses from consumers.
The company develops products for export under the concept of “typical Korean yet localized.” Convinced that each product has to taste different depending on preferences of local people, F&B exerts great effort to analyze local trends and improve its products even after entering the market.
Last year, Seoul F&B penetrated the Chinese market with two brands, Eannae for fresh milk and Brewbean for cup coffee products. Negotiations over the export of frozen yogurt sorbet to China are underway.
CEO of Seoul F&B Oh Duk-geun said, "With continuous effort, we have been able to obtain positive reviews from local buyers and consumers, and the sales are gradually increasing. We expect to reach US$ 5 million in exports."
Rapid Growth through OEM Agreements with Large Korean Companies
Established in 2005, Seoul F&B is located in an ecologically clean area of Heongseong County in Gangwon Province. It produces milk, fermented milk products, juices, and coffee in hygienic, HACCP-certified facilities using fresh milk supplied by farms of Gangwon Province.
The company’s first product was premium yogurt developed for a major milk company. Seoul F&B was the first in Korea to adopt the concept of refrigerated juices. Recently, it released 300ml cup products. The achievements can be at least partly explained by the ability to read the market, make decisions quickly, and immediately put them into practice. Rather than following trends, Seoul F&B strives to create them.
Through its efforts, the company has grown into a medium size enterprise with annual sales of US$150 million. Recognizing its innovative spirit and high-quality products, several large Korean food companies concluded OEM agreements with Seoul F&B. The production scope currently includes about 180 products.
The company’s pursuit of high-quality production is reflected in its slogan, “High Quality Starts with Me.” All employees do their best to make the best products. Although products are manufactured by machines, the production ultimately depends on the earnestness of employees. Seoul F&B, on its part, strives to make its workers happy.
Oh said, "Our company is one of the few in the Korean beverage industry to use a system for diversified small-quantity production. In the rapidly changing trends of beverage industry, it gives us a competitive edge even against large companies."
Plans for Market Expansion with the Company’s Own Brands
Although Seoul F&B started as an OEM producer, it has been developing its own products. The company’s brands include Eannae Premium Milk (eco-friendly and non-antibiotic dairy products), Ilike Juice (vegetable and fruit juices with original flavors), and Cafe Lemontree (flavorful coffee products).
Seoul F&B plans to expand export of products under its own brands. To this end, it seeks out opportunities for entry to foreign markets through consistent market research. It explores strategies to promote its milk, coffee, fermented milk products, juices, and healthy functional products overseas. In addition, Seoul F&B has recently acquired Halal certification to advance into Islamic countries.
Oh says, "Large companies can use consignment production because they possess manufacturing know-how in production. Since our technologies are recognized even abroad, I am certain that our exports will increase."
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