How KPOP Foods Nearly Tripled Their Revenue In One Year

$6,500
revenue/mo
2
Founders
5
Employees
product
KPOP Foods
from Los Angeles
started February 2017
$6,500
revenue/mo
2
Founders
5
Employees
698K
alexa rank
12.2K
followers
98
followers

Hello again! Remind us who you are and what business you started.

Hello again, my name is Theo Lee and I’m the co-founder and CEO of KPOP Foods, a food brand inviting people to discover and enjoy Korean food and flavors through our products. At the time of our last interview, we only had two products - KPOP Sauce, a Korean chili sauce based on my grandma’s recipe, and KPOP Sea Snacks, a premium roasted and all-natural seaweed snack.

Since then, we’ve released three new sauces, KPOP Kimchi Mayo Sauce , a one-of-a-kind spicy and tangy aioli, KPOP XXX Sauce , a spicier version of our original KPOP Sauce, and KPOP Honey Glaze Sauce , a sweet chili sauce made from honeyed chili paste, jalapenos, garlic, lemon, and lime. Our new sauces were all crafted by our Head of Product, chef Chris Oh, who had just joined our team when I last interviewed with you.

It’s actually great reflecting back and seeing how far we’ve come since we last spoke. Since then, in August of last year, we successfully closed an equity crowdfunding campaign on SeedInvest by raising $217,100 from over 50 different investors. It was a wild ride as we had to raise a minimum of $200,000 and on the last day, we were at $177,000 so we literally made it by a thread. Again, a huge thanks to our community of supporters, investors, and advisors for helping get through that campaign. With the capital, we launched our new sauces and created special packaging just in time for the holidays, see below.

Then in April and May of this year, we ended up raising another $232,500 led by Strong Ventures, an early-stage venture capital fund with offices in Los Angeles and Korea. With the capital, we’ve expanded our distribution by breaking into retail stores, namely Bristol Farms in Southern California (more to come later).

how-kpop-foods-nearly-tripled-their-revenue-in-one-year Our Triple Threat Sauce Set featuring our original KPOP Sauce, Kimchi Mayo, and XXX.

Today, we’ve now generated over nearly $250,000 in total revenue and are about to close our best quarter ever with revenues of nearly $50,000. We’ve seen a lot of growth online, especially on Amazon, and are learning a lot about distribution and retail. We’ve expanded into more than 150 specialty stores and have taken a lot of those learnings into mainstream grocery and by the end of the year, we hope to be in over 100 new grocery stores. We’ve also been involved with some incredible partnerships, including Dog Haus, a nationwide craft hog dog restaurant and brewery, which has opened up an additional revenue stream for us in food service and restaurants.

how-kpop-foods-nearly-tripled-their-revenue-in-one-year Some social media images submitted by our amazing customers during launch of new products.

Tell us about what you’ve been up to! Has the business been growing?

We’ve been working on so many different fronts, from marketing and branding, distribution, and partnerships - Mike, Chris, and I are incredibly thankful and fortunate to have an amazing team around us to help us execute and continue growing the business. While hard to see go, we have had some incredibly bright members and interns move onto other companies, however we’re really happy to have had a chance to work with them and be a part of their career growth.

In November of last year, through Chris, we partnered with Dog Haus to create the KPOP Burger, a burger with two wagyu beef patties, cheese, and KPOP Sauce on a King’s Hawaiian burger bun. It was part of Dog Haus’ Chef Collaboration Series where they partnered with a different chef to create a special menu item available for two months and with each purchase, $1 was donated to the charity No Kids Hungry. Here’s a link to the video talking about the KPOP Burger.

The KPOP Burger was such a hit that they invited Chris and us back this past August to create KPOP Korean Fried Chicken Wings featuring our KPOP Honey Glaze Sauce. The wings were such a hit that they blew through initial projections and we were scrambling to make sure we could keep up with production. The partnership was another great success and some of the Dog Haus locations are actually testing the wings out as a permanent menu item.

how-kpop-foods-nearly-tripled-their-revenue-in-one-year Our partnership with Dog Haus and Chris Oh for the KPOP Burger and Korean Fried Chicken Wings.

We hinted at this in the interview last year, but in December, we launched two new sauces, KPOP Kimchi Mayo Sauce and KPOP XXX Sauce. We included these new sauces as part of our new holiday gift set called the Triple Threat Sauce Set. This product launch was a huge success thanks to our community of incredible customers as we took in nearly 250 orders through our website. Chris played an instrumental part in getting his network of influencers to showcase the product, which not only led to orders via our website, but also orders on Amazon. Combining that with Mike and our marketing team’s email and social media strategy, we ended 2018 on an incredible high note, generating online sales of nearly $12,000, our highest at that time.

The start of 2019 as we were featured on the front page of one of the largest Korean American newspapers, the Korean Daily, on its January 4th issue. It was a huge surprise to us and gave us a boost, especially on Amazon. We quickly followed up with the launch of KPOP Honey Glaze Sauce in February, again, another successful launch. As part of the debut for Honey Glaze Sauce, we introduced three new sets, including the KTOWN Set, featuring Honey Glaze, Kimchi Mayo, and XXX, and The Show Me the Honey Set, featuring Honey Glaze Sauce. Similar to the launch in December, we saw a ton of support from our community.

how-kpop-foods-nearly-tripled-their-revenue-in-one-year One of graphics for the KTOWN Sauce Set - the inspiration for the new sauces came from some of the best restaurants in KTOWN Los Angeles.

In April, Chris was able to get us into the Coachella Music Festival, Southern California’s premier back-to-back weekend music festival. We partnered with his restaurant Chingu for a booth in the VIP area featuring Korean fried chicken wings using the Honey Glaze Sauce and Korean french fries using Kimchi Mayo. IIt was a crazy two weekends as we learned how to run a food booth and on the first weekend, we definitely made some mistakes (thank you again to all the people to patiently waited in line). We underestimated the number of orders we’d get and actually ran through an entire weekend of food the first day! Thankfully we were able to get more ingredients to last the rest of the weekend, but all in all, it was an incredible experience and great for the brand as we gained a lot of new customers and social media followers. Through the event, we got a shout out from Alvin Cailan, the founder of Egg Slut, as he featured our wings on First We Feasts’ Instagram account.

how-kpop-foods-nearly-tripled-their-revenue-in-one-year

During this time, we were also in the middle of on-boarding our first major retailer, Bristol Farms, a grocery store chain with 13 locations throughout Southern California. We’d been working for months trying to get our products into their stores and then in June, it finally happened. As part of the deal, we also brought our products into DPI Specialty, our first distributor. Up to this point in time, we primarily sold online and specialty stores so Bristol Farms and DPI Specialty were our first opportunity into mainstream retail. There was definitely a large learning curve as retail and distribution is a totally different business than e-commerce and online, however, thankfully, we have a great team of mentors, advisors, and brokers with experience in retail that assisted us through the process. Today, we’re still looking to grow our retail footprint, expanding into DPI’s other retail clients, and also looking to grow into other regions and stores. As mentioned earlier, we’re really focused on hitting our goal of 100 new stores before the end of the year and we’re currently on track to do it.

While doing this, we’ve also been focused on growing our online channels. We’ve done a lot of work testing our digital marketing strategies, landing pages, etc. While some of these strategies have helped us significantly, we still continue to see a much greater impact on Amazon. During our product launches, we have significant upticks in revenue, however it hasn’t sustained at the level we needed. On Amazon, however, we’ve seen revenue continually grow, especially over the past couple of months. With this in mind, we’ve re-worked our digital marketing strategies to focus on Amazon and we’re continuing to see the benefits. Even when partnering with influencers, we continue to see more revenue bump on Amazon than our website. While not optimal as we lose out on customers’ emails, we still see a lot of positives and have found ways to enhance the customer experience via postcards and packaging sent through Amazon.

What have been your biggest lessons learned in the last year?

One of the biggest lessons learned this year was about the grocery store sales cycle and review periods. From our own research, we knew about a lot of things to expect heading into retail and distribution - the different marketing tactics from samplings to promotions, shelving problems, lapses in data and information, problems with the timing of cash flows, etc. However, one thing we didn’t expect was the importance of the timing of the review periods. We were fortunate to not face these problems with specialty stores and Bristol Farms, however for larger grocery stores, such as Kroger, Albertsons, Wegmans, etc., they are fairly strict on following specific category review periods. When thinking about the operations of a large grocery store chain, it makes sense, especially when considering shelf-space. This was something we underestimated when considering our retail growth strategy, however knowing this now, we’ve been very diligent on getting the timings of the review periods in preparation for next year.

Another lesson has been working with consultants and other third parties, especially brokers. To start, we still currently work with a broker who’s been great at keeping us up to date and guiding us through the retail and distribution process. However, we have worked with previous brokers that were a total disappointment. From generating poor leads to overpromising and under-delivering, we’ve seen a lot of it, especially with regards to retail. Prior to our current broker, we worked with two others that delivered minimal results. If anything, we were fortunate to have clauses in our agreements to break the relationship, however it’s definitely made us vet brokers and third-party consultants even more closely.

On a more positive note, we were incredibly fortunate to have a customer contact phone number posted up on our website. Thankfully we haven’t had too many customer service problems, however we have received a ton of business inquiries through the number, which can get tedious and become somewhat of a hindrance. However, regardless, we always pick up and answer the phone and this was how we connected with one of our recent influencer partnerships, JRE, a Youtube influencer with over a million subscribers. We were really fortunate that JRE’s manager called and reached out to us but it just shows how doing the little things can pan out to much bigger things.

Finally, one of the last things is the importance of persistence. I mentioned earlier how our most recent round of fundraising was led by Strong Ventures. We actually met with Strong Ventures back in late 2017 and at that time, they passed on us and rightfully so as we were still very early stage and only had 1 product. In March, when we were networking to find potential investors for the round, multiple people had asked if we had spoken to Strong Ventures. When we reached out, the partner was thrilled to have another opportunity to invest in us and this time, we were able to make a deal happen. Additionally, it was really persistence that allowed us to get into Bristol Farms. The buyer responsible for our category was incredibly busy and so we would literally have to try getting a hold of him every other day. At a certain point, we didn’t want to come off as a nuisance, but we knew he was the key to getting in. Thankfully, he understood our situation and it all paid off.

What’s in the plans for the upcoming year, and the next 5 years?

A big focus for us at the start of next year will be continuing to expand into grocery stores. Grocery stores have review periods and for our products, a lot of the review periods start in April. We’ll be really focused on identifying the key stores that fit our customer base and preparing for those product presentations. Additionally, we’ll also be working on developing marketing and PR strategies to support our retail growth.

Along with expanding our distribution outlets, we’ve also been working on product development. We’re pretty focused on launching several new seaweed snack flavors, as well as potentially expanding into other sauces and snacks. I guess you’ll just have to wait and see what we come up with.

Over the long term, we’re still very driven to continue growing our brand and fulfilling our mission statement of bringing people together through food. We’ve come a long way in growing KPOP Foods to this point, however we know that there is still a ton to do to get to where we want to be.

Have you read any good books in the last year?

I actually just finished reading Shoe Dog, a memoir by Phil Knight, the co-founder of Nike. More than anything, it was a really inspirational story. While I can’t confidently say we’ll ever be as big a brand at Nike, it was fun reading about some of the early struggles Nike went through and how similar they were to what we faced - from financing, working capital, vendors, etc. It was a really enjoyable book and a quick read so I highly recommend it.

Advice for other entrepreneurs who might be struggling to grow their business?

Growing and scaling a business is really hard. We’re going through it now across our revenue streams, both online and retail. If anything, I think persistence is key. If one strategy doesn’t work, then look for another, or try a totally different approach. Along with that, I think it’s also really important to be transparent with your team on your goals, especially when it comes to revenue growth. It really helps everyone focus on the big picture and task at hand, making sure that the work they’re focusing is contributing to the overall goal. Additionally, it’s always good to talk to mentors and advisors and see if they have ideas for growth as well. You’d be surprised at some of the ideas people can come up with.

Are you looking to hire for certain positions right now?

While we’re not looking to hire for any specific position, we’re always looking for good talent so please reach out to us. Feel free to shoot us a note at [email protected] and we’ll make sure to get back to you.

Where can we go to learn more?

You can always find out more about us and what we’re up to via our social media channels, @kpopfoods, or our website, https://www.kpopfoods.com. We’re always here to help and so again, please feel free to reach out via [email protected]

If you have any questions or comments, drop a comment below!

-  
Theo Lee,   Founder of KPOP Foods

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