South Korean energy drink breakthrough: Australia’s Kanguru ready to take on traditional local tonics
South Korea has long had its own form of traditional energy drinks called tonics to provide energy boosts, many of which contain ginseng and are thus bitter in taste, but Kanguru Asia Pacific President David Westall stressed to FoodNavigator-Asia that this is ‘nothing like those’.
“We’re filling an important position in the beverage category in Korea – a functional, better-for-you beverage containing a botanical infusion that gives energy and a lot of other benefits beyond being just a sugar or caffeine boost. Plus, Kanguru tastes good. Most tonics do not,” he said.
“Koreans are some of the busiest people in the world, yet still very health conscious, hence the need for functional drinks that aren’t detrimental in other ways, e.g. high sugar. Kanguru contains no added sugar and also has five major botanicals and six essential B-vitamins.
“One of these botanicals is red ginseng, which Koreans are very familiar with, as well as yerba mate, guarana, Schisandra and green tea, each of which play their own important roles to provide benefits such as to reduce fatigue, boost immunity and improve endurance.”
Kanguru will first enter the country via the convenience store channel, which Westall believes is the best form of retail to start with given its wide coverage.
“Convenience stores have the highest penetration of all retail formats in Korea at over 45,000 stores, they’re at the corner of every street in the country, and many of our target consumers such as young businesspeople and university students who are conscious about their health also tend to frequent these,” he said.
“Of course we won’t stop there, we will go to the various supermarket levels, from express marts to hypermarkets and online too, but are choosing the most platforms which are most suitable – rather than mass retailers such as Amazon or eBay, we’re looking at the more specialized platforms in Korea that do healthy alternatives like meal kits.”
Kanguru also has plans to enter the late-night scene in Korea, which would mean marketing its products to places such as gaming rooms and noraebangs (karaoke outlets), which are very common forms of night-time entertainment in the country and consumers, especially of the younger generation are willing to purchase food and drink that can help them last through the night.
“There’s a huge market there where people are looking for a boost of energy to continue gaming or singing – basically energy to help them concentrate and enjoy themselves even after they’ve been working or studying all day,” he said.
“Even here, consumers are also looking for healthier options, so it’s a matter of Kanguru being able to address their specific needs for both energy and health.
“There are very few sales channels where Kanguru won’t be a good fit – maybe not with alcohol, as we have a no sugar and no harm philosophy so are not going to be a Red Bull [to a Jager Bomb] in any way, but most others, we fit.”
Big name, good price
Kanguru entered the country in partnership with Binggrae, one of the biggest F&B giants in South Korea, marking Binggrae’s first evern collaboration with an independent brand, as well as the first time a new brand has secured such a manufacturing and distribution deal in Korea without having sold anything there first, said Westall.
“This has never happened before for any independent brand, and we are grateful for Binggrae’s strong belief in Kanguru’s products and the ability to fill a gap in the market for functional drinks,” he said.
“Importantly, we’re also at a good price position. At about KRW 2,000 (US$1.67) per 250ml can, that’s perhaps more than a locally manufactured energy drink but cheaper than a Red Bull, and we’ve got 1,000mg of premium botanicals than none of the rest do.
“It’s affordable pricing for a lot more, even compared to tonics which might have similar botanicals – these would normally be about KRW6,000 (US$5.02) to KRW7,000 (US$5.86) or more – and again, it’s hard to make ginseng taste good, but we have done so.”
New products incoming
Kanguru is starting with the original citrus flavour in Korea, but Westall also told us that he hopes to bring the Mixed Berry and Pomegranate flavour (available in Australia) in later this year or early next year.
The team also already has three flavours prepped and tested, which it will roll out strategically, as well as other products targeting specific functions.
“We innovate based on what new needs arise, for example we’re looking at something for nootropics and the brain, especially in Korea where education and studying is such a big thing,” he said.
“Real innovation to us is really understanding new ingredients and botanicals and their unique benefits and functions, and figuring our how to get these to symbiotically work together to most benefit the consumer.
“For example, we’ve made sure to put six essential B-vitamins in Kanguru as we know that it is necessary to have a combination of these for the body to actually absorb them.”
When asked about the major challenge faced during the launch, Westall said that setting up manufacturing was the most prominent, mainly because the uniqueness of the products meant it had never been done the way they had before.
“Korea is well-known for its manufacturing quality and technical standards, and we took over two years and discussions with some 25 manufacturers before figuring thing out,” he said.
“We also had to invest in special equipment and go through language and cultural differences to train staff, in addition to gaining the trust of senior manufacturers and getting them to follow what was pretty different to what they were used to.
“But seeing that first can of Kanguru manufactured in Korea – it was the most satisfying thing I’ve seen after the birth of my daughter six years ago.”