Korean cosmetics firm takes organic green tea to world
By Kim Bo-eun
AMOREPACIFIC Chairman Suh Kyung-bae
AMOREPACIFIC has long secured its place as the nation's largest cosmetics manufacturer and is steadily expanding its presence in foreign markets. Along with its beauty products, it is now focusing on growing its green tea business.
"There is a lot of interest in green tea in countries in the West, so we expect to be able to offer the best quality organic green tea to a broader range of global customers," said Suh Kyung-bae, chairman of AMOREPACIFIC.
The company has in fact been exporting to countries in Europe and North America since 2011, and the quality of its green tea has been recognized by renowned institutions abroad.
But why did a longstanding and renowned cosmetics company, which would have been sufficiently profitable focusing on cosmetics, decide to start a green tea business?
The late chairman and founder Suh Sung-whan had a vision to revive the tea culture deeply rooted in Korean history. On business trips to foreign countries, he realized that each had their own distinctive tea, but that Korea did not. Based on his fervor, Suh initiated AMOREPACIFIC's green tea business in 1979.
Despite initial opposition, Suh pushed forward with the plan and chose Jeju Island as the site to grow green tea based on its climate, soil and natural drainage features. But although the environment was favorable for growing tea, the land was barely arable in the beginning. Hard work over some 30 years transformed rock fields and thorny bushes into 33 million square meters of green tea fields.
Green tea fields on Jeju, along with AMOREPACIFIC's tea field in Gangjin, South Jeolla Province, now produce some 1,000 tons of green tea out of 4,000 to 4,500 tons or around 25 percent of the total production in the country.
Chairman Suh has succeeded the late founder and has unveiled his ambitions to bring back Korea's tea culture by focusing on superior quality tea.
"We will endeavor to revive the tea industry through the best tea grown on our soil," Suh told Business Focus.
That's because AMOREPACIFIC focuses on wholesome, quality products. Since 2009, all of its tea fields have applied organic farming, which was soon recognized by the industry.
In 2010, it received a certification from the International Federation of Organic Agriculture Movements as well as from the U.S. Department of Agriculture's National Organic Program. It also received an EU-Organic Certification the following year.
AMOREPACIFIC also established Sulloccha Research Institute where it conducts research on green tea plants.
Tea fields that are farmed organically are only able to produce about 60 percent of the total produce of regular tea fields. However, the company's fields have been able to produce 85 percent due to its rigorous research in organic farming techniques.
Applying scientific techniques, the company effectively reduced plant diseases and pests. This has in turn aided in guaranteeing a fixed amount of produce in every harvest.
The institute also researches green tea varieties and species so that its tea products can be differentiated from the very beginning by their raw materials.
"Because AMOREPACIFIC manages the whole process from raw material to product, we are able to more effectively ensure superior quality," said Lee Min-seuk, principal researcher at the institute.
Maintaining quality is the main reason the firm's OSULLOCteahouse is not available for franchising. AMOREPACIFIC manages all five of its teahouses in Seoul and its tea museum on Jeju Island.
To provide a medium through which customers could become familiar with its products, AMOREPACIFIC opened the OSULLOC teahouse where visitors can sit and enjoy its teas as well as other tea-based products.
"In general, when people think of tea, they think it's for old people. The idea was to create a more modern image of tea so that younger people could become more familiar with it and enjoy it," said Kim Ji-yeon, senior specialist at OSULLOC's sales team.
Currently there are five teahouses in Seoul, all of them in trendy downtown areas such as Myeong-dong, Apgujeong-dong and Daehangno.
Meanwhile, the OSULLOC Tea Museum is located at its Seogwang tea field on Jeju. At the museum, visitors can learn about the history of Korean tea, see how tea leaves are pan fried, taste tea and try its famous green tea ice-cream.
Some 3,000 to 4,000 people visit the museum every day, and some 1 million domestic and foreign tourists every year. Since it opened in 2009, it has seen a 20 percent growth in visitors each year.
Interest in tea seems to be increasing in the nation. According to the Ministry of Agriculture, Food and Rural Affairs, consumption of green tea per person per year has steadily been increasing. The consumption figures stood at 48.5 grams in 2003, 68.5 grams in 2005 and 73.2 grams in 2010.
"Beverage trends change. The domestic coffee market has reached saturation level, while the tea market is growing at double digit rates," said Kim. In fact, the company's green tea brand Sulloc saw an 18.2-percent increase in sales last year, compared to a year earlier.
Sulloc tea is widely available at supermarkets while OSULLOC is a premium tea brand, of which its products are sold at select stores.
Green tea is not only used for food and beverage. A core component of green tea leaves is catechin, which gives the bitter taste in green tea. Catechin is known to combat aging in the skin, and therefore is being extracted for cosmetics products such as the green tea serum. Green tea components are also used in cosmetics for their whitening effect.
While primary research has been on tea leaves, the firm's green tea institute has also started researching the flowers of green tea plants as well as the oil contained in the seeds.
Students from MIT's MBA program learn about Korean tea culture at OSULLOC's Tea Stone, a private space for tea classes, located at the green tea brand's museum on Jeju Island.
While AMOREPACIFIC's green tea brand Sulloc is well known among Koreans, the brand has also started gaining recognition overseas.
AMOREPACIFIC exported some 20 tons of green tea to the United States, Canada, Germany and Austria in 2011. The following year, it exported some 40 tons to Canada, Germany and the Netherlands, among other countries.
The company's exports keep growing — this year, it expects to export more than 50 tons of tea to six countries — the U.S., Canada, Germany, Austria, the Netherlands and Switzerland.
With the Sulloc tea reaching more foreign markets, its quality is starting to get acknowledged.
German consumer protection magazine OKO gave the highest rating in a quality test to Sulloc green tea that was exported to the country in February last year.
In addition, the North American Tea Championship ranked OSULLOC's master's tea "Illohyang" No.1 in the pan-fried green tea category in 2009, 2011 and 2012. Japan also awarded the gold prize to Illohyang in the World Green Tea Contest for two consecutive years in 2008 and 2009.
In October 2012, Osulloc started providing Starbucks with powdered green tea, and it now provides 28.5 tons to their stores in 15 countries in Asia.
Boosted by such positive developments, AMOREPACIFIC is set to further expand its reach with quality green tea.