Reaching the endgame: Korea Ginseng Corp views success in the US as final step of its globalisation strategy
In 2022, Cheong Kwan Jang, the representative brand under Korea Ginseng Corp (KGC), reached about USD1.038bn in sales.
KGC’s products are exported to over 60 countries, occupying more than 40% of the global market share. Its markets are spread across Asia, Europe, Middle East, and the US, which has seen sales increased by more than double in the past three years.
“Our goal is to become the number one herbal health company in the world. Success in the US, the largest market leading consumption trends, means the completion of globalisation. To this end, Korea Ginseng Corp is implementing various expansion strategies in terms of sales and marketing.
“In cooperation with brand-consulting specialists in the local market, we are actively targeting local distributors to introduce our products. Currently, we have entered mainstream retailers like Costco and Walmart, and the aim is to expand sales channels in the non-alcoholic beverage category in the future,” Rian Heung-Sil Lee, CEO of Korea Ginseng Corp. US, told NutraIngredients-Asia.
As part of its marketing efforts, KGC has selected Korean-American actress Arden Cho and The Joy Luck Club star Kieu Chinh as Cheong Kwan Jang’s new brand ambassadors to “approach consumers with familiar faces”.
To meet the specific needs of the American consumer, the firm has recently opened a new R&D centre in the US. “It will be a key base to analyse trends in the global supplements market as well as develop and produce strategic products suitable for them.”
In addition, the firm has been operating an experiential store called Ginseng Museum Cafe in Manhattan, New York since 2021. The museum area allows visitors to learn about the history and craftsmanship of ginseng, while pure ginseng extract is served on tap so that customers can judge the efficacy of the product for themselves.
Dedicated to US market
Last year, KGC rolled out several new products under the KORESELECT and HSW ranges, which were specially launched for the US market. These can be found at major US chain stores and e-commerce platform Amazon.
KORESELECT liquid-stick supplements claim to be “a blend of ancient herbs and scientific nutrition” that cater to various needs, including blood sugar regulation, muscle health support, and sleep and mood support.
HSW is the latest version of Hong Sam Won, Cheong Kwan Jang’s top-selling traditional herbal tonic. Its line-up consists of five herbal drinks made with six-year-old Korean red ginseng.
“Each drink contains only natural ingredients and may be consumed at any time throughout the day because they are all caffeine-free. Furthermore, each bottle contains less than 40 calories, with no artificial sweeteners or GMOs added,” the firm said.
Diversification is on the cards
With the opening of the R&D centre, KGC will focus on broadening its product categories and formats in 2023.
“After the pandemic, products that are good for immunity, especially herbs and natural products that help balance physical and mental health, are getting more attention than before. The fact that many adaptogenic herbs, such as ashwagandha, are sweeping TikTok content can be seen as an indication of consumer interest.
“Beyond our existing red ginseng-based products, we are looking to use a variety of raw materials that reflect mainstream trends. These include ashwagandha, beetroot, probiotics, etc. At the same time, we will be diversifying into formats such as gummy, jelly stick, nutrition bar and powder. We also plan to expand our product line-up — for example, tea substitutes for coffee,” Lee shared.
Another key area of focus for the firm this year is to identify a new target consumer group.
“Even if they are not familiar with ginseng, they are highly interested in health and natural adaptogens that are good for their body. Through our marketing strategies and product diversification, this group of consumers will have more access to our brand and products.”
For the mid- to long-term, the firm is considering setting up a manufacturing plant in the US to establish systematic local production operations.