Korean CEO pledges to foster Smoothie King into global giant

“My goal is to make everyone immediately think of Smoothie King when it comes to fruit-based drinks, just as people look for Starbucks for coffee.”

Smoothies Korea CEO Kim Sung-wan, 40, recently took over the U.S.-based parent company nine years after the brand was introduced to Korea in 2003. In an interview with the Dong-A Ilbo, he said, “I just laid the foundation with this buyout for us to grow into a global brand.”

○ Why choose Standard Chartered Bank?

Kim left for the U.S. Monday right after signing the M&A deal to attend the annual Franchise Conference in New Orleans for franchisees of Smoothie King. On why he accepted investment from the equity fund of Standard Chartered Bank, he said he “thought it would help us take a leap forward to become a global brand.”

Though many offers were made to buy shares of Smoothies Korea at higher prices and better conditions than those of the bank, he said he decided that going with Standard Chartered, one of the world’s top 10 banks, would be more beneficial for Smoothie King in advancing into many countries.

“We were planning to advance into the Singaporean market this year, and Standard Chartered introduced us to a big shopping mall in Singapore that was one of their customers. That was a great help,” he said.

The National Pension Service of Korea’s acquisition of Smoothie King`s shares was possible because Kim wanted to form a long-term partnership with investors.

“The Singapore store will be a flagship store aiming at investors in nearby countries,” he said, adding, “We are planning to open between 30 and 40 company-owned stores there in five years. If those stores prove successful, investors from Southeast Asian countries who want franchises with us will come to us.”

For stores in China, Smoothie King will directly run them for the sake of supervising food safety.

○ “IT bubble burst led me to the restaurant business”

According to the CEO, Smoothie King founder Steve Kuhnau, 65, did not sell the company due to a cash crunch. Smoothie King was a sound company with no debts and had distributed profits worth millions of dollars to shareholders each year.

According to Kim, Kuhnau loved the company so much that he had vowed never to sell it to equity funds that pursue profit from stock sales. Yet Kuhnau chose Kim, who led the outstanding success of Smoothie King Korea instead of holding an open bidding for the sale of the brand.

Kim is the eldest son of Kim Hyo-jo, head of Kyung In Electronic Co., Ltd. So why did Kim Sung-wan enter the restaurant business instead of following his father?

“It was because I witnessed the IT bubble burst in the early 2000s when working for a venture capital company,” the junior Kim said, adding, “I was shocked to see shares of a company that had risen by the daily permissible limit suddenly plunge and the company go bankrupt.”

Kim Sung-hwan said he was impressed by the huge yearly profit of more than 100 trillion won (86.5 billion U.S. dollars) that McDonald earned by selling burgers and fries and the company`s strength that has lasted for decades.

He concluded his interview by saying, “Please watch me as I help Smoothie King grow into a global brand like McDonalds.”

dawn@donga.com