Healthy But Awesome Flavors

As Korea sets its sights on becoming one of the world’s most beloved culinary powerhouses, the popularity of K-Food continues to soar. For eight consecutive years, Korean food-related exports have reached record highs, totaling $12.14 billion in 2023—a 2.6% increase from 2022. How do you account for the sustained growth in Korean food exports and the rising global popularity of Korean cuisine in recent years?

The growth of the Korean food industry has not been gradual; it has been fueled by specific events that significantly boosted its popularity. Among these, the global rise of K-pop, K-dramas, and Korean films has played a crucial role. These cultural phenomena have captivated audiences worldwide, introducing them to Korea’s unique identity, including its cuisine.

Additionally, there has been a growing global interest in traditional Asian cultures, which initially focused on Japanese, Chinese, and Thai traditions. However, people are always eager to discover something new. The international success of Korean culture—spanning music, TV, and film—sparked curiosity about Korea as a whole, and naturally, its cuisine gained traction as part of that cultural wave.

You mentioned that Korean food initially targeted Asian markets. However, in 2023, we observed significant growth in exports to Europe and the U.S., which have now become leading destinations for K-Food. Do you think the philosophy behind K-Food remains the same when catering to Western markets as it did for Asian markets?

I believe the philosophy is both similar and different. At its core, we are all human, regardless of race or ethnicity, so there is a shared foundation when it comes to enjoying food. However, cultural differences between the East and the West cannot be ignored, and these differences must be taken into account when approaching Western markets.

Could you share an example from your brand’s experience that illustrates how you have addressed these differences in philosophy?

I can think of two examples. The first relates to product design. In Western markets, consumers tend to prefer clean and sophisticated packaging, while in Japan, cute or childlike designs are very popular and well-received. This cultural difference has required us to adapt our branding strategies for each region.

The second example is related to flavor preferences. Japanese consumers often gravitate toward general or familiar flavors that are already popular. On the other hand, Western consumers are more adventurous and open to trying unique or unconventional flavors without preconceived biases. These insights have helped us tailor our products and marketing strategies to better align with the preferences of different markets.

You mentioned that the U.S. market doesn’t favor the “cuteness” of packaging designs. It’s true when we look at many of their snack brands—their designs often feel outdated. Do you see this as a strength or a weakness for the U.S. market? Do you think your strong design capabilities can attract the interest of American consumers?

So far, we’ve treated our design as a strength. However, I believe that to expand further into the international market, we need to continuously refine our designs and adjust our strategies. Historically, our packaging featured small characters and focused heavily on storytelling to convey the brand’s narrative. About a year ago, we shifted gears by significantly minimizing the story element and making our main character more prominent on the packaging. This change was based on market feedback. We’re constantly observing how different markets react to these redesigned products and will continue to adapt our strategies based on those responses.

Today, with the growing popularity of K-Food in Europe and the U.S., what do you see as the biggest opportunities in these regions?

Our primary focus is on the U.S. market, as it’s a key market with immense consumer power. I firmly believe that success in the U.S. would pave the way for our products to achieve global recognition. The U.S. serves as a gateway; if we establish ourselves there, we can extend our reach to other parts of the world. A great example is Toyota’s Lexus—it became a global success by first succeeding in the U.S. market. When we began considering global expansion, we debated which market to target first. Ultimately, we concluded that the U.S. market is the foundation for global success.

As part of your expansion into the U.S., you’ve developed a new product, the Alaska Fish Snack. On one hand, you’re tailoring products specifically for the U.S. market, but on the other hand, U.S. snacks tend to be either very salty or very sweet, whereas Korean flavors often strike a more balanced mix. This is where your diverse range of flavors could stand out. Which product do you think will resonate most with U.S. consumers?

First and foremost, I believe we should begin with our flagship flavor: honey butter. The almond market in the U.S. is enormous, especially with California as one of the largest almond-producing regions in the world. Even penetrating a small niche in such a large market would be a significant achievement and an excellent starting point for global expansion.

Our strategy is to lead with the honey butter flavor and complement it with two or three additional flavors. Established almond brands in the U.S., like Blue Diamond, already dominate the market with flavors familiar to American consumers, particularly salty ones. Competing directly with these traditional flavors would not be a viable strategy. Instead, we aim to differentiate ourselves by introducing our unique honey butter flavor, which has been a consistent favorite in Korea and beyond for the past decade.

This flavor has earned consumer trust and loyalty over the years, and we’re confident that its universal appeal will resonate with consumers in the U.S. as well. By leveraging this flagship product, we hope to introduce American consumers to the essence of our brand and expand further from there.

You mentioned the large almond market in the U.S. It’s worth noting that your company originally started as an importer of Californian almonds under your father’s leadership, and now you’ve built the HBAF brand as it is today. Could you share more about the company’s history and the key steps in the brand's development?

As you said, my father started this business by importing almonds and supplying them as raw materials to conglomerates. At the time, it was a simple operation with just a dozen employees, generating revenue through commission fees. However, as importing and global trade became more accessible, the competitive edge of our business diminished. Today, people can import products with just a few clicks on their phones.

When my father suffered a stroke and was hospitalized, I was faced with the decision of taking over the business. Initially, I had plans to pursue a career elsewhere, but I stepped in to lead the company, which was struggling financially and on the brink of capital impairment. At that moment, I realized we needed to pivot. Manufacturing almonds ourselves became the clear path to regaining competitiveness, even though it was a challenging direction to take.

Back then, we had no brand, no products, and no experience running a factory. Our initial breakthrough came when large Korean retailers like Emart, Lotte Mart, and Homeplus were pushing their private brand (PB) strategies. While other manufacturers perceived these PB products as competition, I saw an opportunity. I approached these retailers, explaining that our factory was underutilized and that we could manufacture their PB products at the lowest possible cost. This strategy secured us contracts to produce PB products, allowing us to start running our factory.

However, while producing PB products generated revenue, it didn’t yield profits. I realized we needed a more sustainable business model. Around that time, honey butter chips became a viral sensation in Korea. GS25, a major convenience store chain, requested us to supply honey butter-flavored snacks for their shelves. At that point, we didn’t have an R&D lab, but I was experimenting in the kitchen, trying to create new products. One of the items I was working on was flavored almonds.

There were two main challenges with flavored almonds: first, flavors would fade during distribution; second, almonds were expensive. I discovered that coating almonds with sugar or syrup not only enhanced the flavor retention but also increased yield by 30% or more. Almonds were priced around 8,000 KRW per unit, while sugar cost only 1,000 KRW. By adding a sugar coating and flavoring, we could maintain a competitive price while boosting profitability.

The next step was to develop a flavor that complemented the sweetness. I studied American companies and their syrup-coating processes, particularly the brix levels (syrup concentration). Low brix coatings were common in the U.S., but they made almonds soggy due to moisture absorption, and they required more syrup, which reduced profitability. I decided to go in a different direction, developing a high-brix coating process that not only preserved flavor and texture but also improved yields.

We also had to overcome the challenge of making large flavor particles adhere to the almonds. This required creating proprietary recipes and processes, which eventually led to the development of our honey butter almonds. Initially, I kept this innovation on hold because we lacked a product to apply it to.

When GS25 requested honey butter-flavored snacks, I realized it was the perfect opportunity. While other manufacturers rushed to create similar products, we were able to produce high-quality samples quickly, thanks to the process I had developed. The response was overwhelming: in the first month, we generated 100 million KRW in revenue, which grew to 500 million KRW the following month, then 1 billion KRW, and eventually 1.6 billion KRW within a few months.

At the time, we didn’t have the necessary machinery, so much of the production was done manually. Off-the-shelf machines didn’t meet our needs, so we developed and customized our production lines piece by piece. Automating the process took years, but we eventually perfected it and secured a patent for our automation technology.

To succeed in the U.S. market, we believe local production is essential. Currently, our products are three times more expensive in the U.S. compared to Korea, primarily due to export costs. Even though our products are well-designed and align with the growing interest in Korean trends, the price disparity is a significant barrier. Local production will allow us to offer competitive pricing while maintaining quality.

Additionally, almond prices fluctuate because they are an agricultural product. To mitigate this risk, we plan to invest in almond farms in the U.S. By owning farms, we can hedge against price volatility—if almond prices rise, we can generate profit from farm operations, and if they fall, we can benefit from lower production costs. This approach will help us achieve steady, balanced revenue.

While building a manufacturing facility in the U.S. is relatively straightforward, acquiring a farm large enough to hedge these risks is more challenging. To prepare for these investments, we are also working on plans to list the company on the stock market.

In the future, our goal is to produce almonds locally in the U.S., leveraging automation and farm investments to build a sustainable, competitive operation that can support our global expansion.

When would I be able to purchase your products in the U.S. at the same price as in Korea?

While I can’t provide an exact timeline, I can share the efforts we’re making to achieve that goal. Ultimately, it depends on multiple factors, including logistics and, to some extent, luck. Manufacturing is just one part of the equation—we also have to tackle the challenges of distribution and sales, which are particularly difficult in the U.S.

For our readers, could you define HBAF today and your philosophy in one or two sentences?

HBAF is a company dedicated to delivering healthy but awesome flavors.

Out of the 30+ flavors you’ve probably participated in creating, analyzing, and testing, which one is your favorite?

To be completely honest, almonds are not my favorite snack. I got into this business primarily due to external circumstances, not personal passion. I’ve even shared this on the well-known TV program You Quiz on the Block, so there’s no point in pretending otherwise. That said, my personal taste doesn’t interfere with my role as CEO or the work I do to ensure the success of the company.

You mentioned throughout the interview that you provide healthy products. Could you elaborate on the factors that make your products healthier?

I think it all comes down to relativity. While we fall under the category of snacks due to our strong flavors, our products are comparatively healthier than most traditional snacks. For instance, I previously mentioned the brix level. Typically, products with high brix coatings are fried in oil, but we don’t fry our almonds—we roast them. Roasting not only preserves the natural quality of the almonds but also addresses issues like rancidity that often occur with frying.

Although our almonds are sweet, consuming the recommended portion provides nutritional benefits. Additionally, we’re currently developing zero-sugar almonds. While we’ve succeeded in creating a zero-sugar version, the flavor hasn’t yet met our expectations, so we’re continuing to refine it. Moving forward, we plan to release more products that are less sweet and milder while maintaining delicious flavors. We are also innovating our manufacturing processes to create healthier options with unique appeal.

Where can your consumers purchase your products?

In China, we’ve recently opened offline stores in Chongqing and Shanghai, with the Shanghai store located right next to the M&M store. In the U.S., our products are available online, and we’re collaborating with major retailers to expand our reach further.

Interestingly, we’re also exploring opportunities to produce our products in Saudi Arabia.

Many countries in the Middle East already produce their own almonds, and almonds are a significant part of their sweets and diets. Do you plan to use their local almonds and create unique flavors for the region?

Yes, we’re open to incorporating local almonds and creating flavors specific to the Middle East. However, the quality and quantity of almonds produced in Saudi Arabia are currently insufficient, so we’d still need to source from California.

In terms of flavor, our strategy would be to offer a mix: half of our lineup would feature our signature global flavors, while the other half would be localized to cater to regional tastes.

To add to this, our goal for 2025 is to rebrand the company. The cornerstone of this initiative is the development of 100 unique flavors and establishing world-class offline stores. Currently, we have 80 flavors ready. When creating new flavors, we consider two segments: flavors that are universally loved and flavors that cater to niche audiences or generate enthusiasts, even if they’re not mainstream.

Based on this approach, we aim to reach 100 flavors. The rebranding process will also involve updating our logo, store designs, and operations to align with this new direction.

You mentioned challenges in developing new flavors. Could you elaborate on that and how it has influenced your business direction?

One challenge we’ve faced is that certain flavors, while delicious, are difficult to apply to almonds. Almonds are dense, so to bring out their flavor, we need very strong, concentrated flavors. Some flavors that are mild and light don’t pair well with almonds.

To address this, we decided to use these flavors for popcorn instead, which has led to a new business line for us. We currently have 25 popcorn flavors and are aiming for 30. Production lines for popcorn are already up and running, and we’ve launched sales in Korea.

Although popcorn is not yet as popular as our almond products, we’ve seen promising results. For example, our popcorn has performed exceptionally well in convenience stores like CU, where it ranked #1 in the popcorn category and made the top 10 in overall snacks. Additionally, at E-mart Traders, our popcorn generated 30% more sales than other brands. This has been an exciting and promising development, and we plan to expand the popcorn business further this year.

You mentioned rebranding and renaming the company. When can we expect to see the new logo and company name?