▲ Hallasan Soju CEO Hyun Seung Tak. Photos by Darryl Coote and Helen Yang
Soju. In Korea, a simple combination of water, rice, and yeast is responsible for many beginnings, many endings and everything else in between.
The island’s sole soju company, Hallasan Soju, differentiates itself from all other national brands because of the quality of Jeju’s special underground water in its products.
The Jeju Weekly recently sat down with current Hallasan Soju CEO Hyun Seung Tak and Senior Managing Director Hyun Jae Woong, also touring the extensive facilities, west of Jeju City in Hallim, which employs 80 workers.
At age 33, Hyun Jae Woong is slated to soon steer the family company into the future as the fourth generation leader, succeeding his father, Hyun Seung Tak, who has held the position for the last 20 years. In addition, the present CEO holds the honorary position as chairman of The Jeju Commerce and Industry, and vice chairman of The Korea Chamber of Commerce and Industry.
According to the company, last year’s earnings reached 35 billion won (US $33 million).
“Mt. Halla is the symbol of Jeju Island,” said Hyun Seung Tak about creating the current brand name that blankets convenience stores, marts, and restaurants on the island with the popular white (21 percent alcohol) and green (19.8 percent) bottles, among others. “To make this as a global brand, Hallasan is the right choice, to be globalized.”
Before 1991, the island had six soju distilleries in Jeju City, Hagwi, Hallim, Seogwipo, Pyoseon and Seongsan. Then, Hyun Seung Tak said, the central government passed a law that would limit only one company per province for the purposes of brand creation. These six companies merged into one under the name Hallasan Soju, now at its present locale.
“From a business perspective, Jeju City was perfect, the best location,” Hyun Seung Tak said as to why his distillery was chosen to absorb the others. “At the time the other six became stockholders, but the net income was not high, and they started to get out of the company.”
Hallasan Soju started in November 1950 during the Korean War at Samdo-2-dong, under the name of Honam Distillery, as a manufacturer of raw rice wine. According to Hyun Seung Tak, his grandfather, Hyun Seong Ho, had previously tried manufacturing an array of products like soaps and soy sauce.
“On Jeju, there were training grounds where [soldiers] would go, and there was quite a lot of alcohol,” Hyun Seung Tak said. “A lot of alcohol consumption was needed, so that is why [my grandfather] started.”
Founder Hyun Seong Ho died young and was succeeded by son, Hyun Jeong Gook. Tough times abound throughout the years, mainly due to the price of soju being controlled by the national government.
According to Hyun Seung Tak, the company had to import major ingredients from the mainland, meaning the distributing costs were very high. Compared to other mainland companies, profit was relatively lower.
Hyun Seung Tak started working for the company right out of college in 1968, at age 23. From his middle school years, he saw how difficult it was to manage the company and to make a profit. But as is typically the way in family businesses, after returning from university he soon thought, “This is the job I have to do and would have no reluctant feelings taking over.” Learning diligence, honesty and volunteerism from his father, to this day, Hyun Seung Tak never sleeps more than six hours. When he took over the company in 1992, his mark was made.
Enter a marketing strategy, Hyun Seung Tak’s brainchild: a premiere, unique, high quality distilled brand. The premium soju (the white bottle), as he called it, was his idea. With the name change in 1991, Hyun Seung Tak saw a need to rebrand their product and distinguish it from the pack, so he created a premium soju that has higher alcohol content and is further distilled.
▲ Left, Senior Managing Director Hyun Jae Woong, and right, an employee inspects bottles of soju before they are packaged. Photos by Darryl Coote and Helen Yang
During a guided tour of the production line, Hyun Jae Woong said that all soju is similar; some brands use more sugar, others add tea flavoring, but for Hallasan Soju, the major difference is in the water. Since the company’s inception it has always used Jeju’s underground water, retrieved from a nearby reservoir 70 meters below ground. When it rains the water is filtered through basalt rock for up to 40 years, which makes the island’s soju of high quality, and also brands the liquor with the notion of being purely Jeju. This is a “compelling factor,” to consumers, Hyun Jae Woong said.
The plant, constructed in 2002, produces 1 million bottles of the social lubricant a day with the ability to pump out 1.2 million at full capacity, and can bottle 400 a minute. The facility also does its own labeling, packaging, and most impressively, recycling of bottles, also at an output of 1 million a day.
Rice is used to create both soju and one of their other products, a Jeju traditional liquor that is similar in appearance and taste to whisky, hoboksul. For the latter, the rice is first washed then steamed for two hours before undergoing the first fermentation stage that lasts a day and a half. During the second fermentation process, which takes five to six days, sugar extracted from sweet rice, yeast and water are added. After, it is distilled four times. The total process takes between 21 to 24 days. Set to mature for at least three years, hoboksul, with a 45 percent alcohol content, is born.
Hoboksul is a relatively new venture for the company and one which they hope will establish a “legacy” brand through an aged product, said Hyun Seung Tak. Since 2002 they have been storing volumes of hoboksul in aged oak barrels that will sit, some up to potentially 100 years, before being bottled and distributed.
This strategy of creating a “legacy” brand, though not necessarily spearheaded by Hyun Jae Woong, is completely in line with his vision for the company’s future. Having returned to the company in 2005 when his father became ill, he had an immediate obsession for it to grow quickly, but he soon realized long-term preparation and growth strategy were needed.
“Personally, the next generation, the dream is to grow greatly,” said Hyun Jae Woong, citing Ballantine’s success of having a 30-year-old brand and wanting to do the same with Jeju’s representative liquor. His answer to this was hoboksul. It also goes by the nickname “Hashimoto Liquor” because it was served at the 1996 Korea-Japan summit meeting and adored by then-Prime Minister of Japan.
The future of Hallasan Soju will eventually be in the hands of Hyun Jae Woong.
“In the past, my father’s generation had a stable infrastructure; now, the drinking industry is a saturated market,” Hyun Jae Woong said, adding he has to find new and niche markets.
Currently, Hallasan Soju’s market share consists of Jeju (up to 90 percent) and mainland Korea (1.5 percent). The rest can be attributed to exports to Japan, the United States, Brazil, and most recently China.
In 2008, Hallasan Soju began distributing to all E-Mart stores nationwide and later to Lotte stores in Seoul. However, the competition is fierce since, according to Hyun Jae Woong, “nationwide, there are 10 brands, [provinces] have their own local soju brands and are loyal to them.”
China may be the next big thing. But, that market is also filled with many varieties. The major consumers of Hallasan Soju in China are Korean residents and people in Korean restaurants. The company’s competitive edge concerning China, Hyun Seung Tak said, are the Chinese tourists coming here, and eventually diffusing the product back to their homeland.
As Hallasan Soju tries to survive and emerge in an unstable worldwide liquor market, it continues to thrive on the island of its creation.
▲ Aged oak barrels filled with hoboksul, which Hallasan Soju hopes will transform the company into a “legacy” brand. Photo by Helen Yang
(Interpretation by Song Jung Hee)
ⓒ Jeju Weekly 2009 (http://www.jejuweekly.com)
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