"I Won't Ignore Good Ingredients Even If the Price Is Slightly Higher"

[Vitamin SME] Kim Hyun-chang, CEO of Parpharm Co., Ltd.
Specialized Catering Food Ingredient Company, Competing with Small Quantity and High-Quality Strategy
Priced Higher Than Competitors but Sold Out Due to Short Supply, Starting in Australia with Plans to Enter US and Europe Within 5 Years

Kim Hyun-chang, CEO of Parfarm, is explaining the ingredients stored in the freezer located in the kitchen of the affiliated research institute.
[Photo by Kim Jong-hwa]

[Asia Economy Reporter Kim Jong-hwa] "It's 1.5 to 2 times more expensive than other companies' products, but we can't keep up with demand."

The pride of 'Parfarm,' which has established itself as a high-quality premium brand in the food ingredient market dominated by large corporations after 10 years of entry, comes from "expensive but delicious food."

Parfarm is a specialized company supplying food ingredients for catering to schools, public institutions, companies, and famous restaurants nationwide. The domestic catering food ingredient market is about 1 trillion won in size, with large corporations controlling about 70%, and small and medium-sized enterprises competing for the remaining 30%.

Parfarm was established in July 2011 and employs a total of 34 people, including three staff members at its affiliated research institute. It recorded sales of 11 billion won in 2019 and 7.8 billion won last year. Last year, sales declined as students and office workers stayed home without attending school or going to work due to COVID-19.

While competitors' sales last year dropped to about 40% compared to the previous year (2019), Parfarm managed to hold up at about 70%, according to CEO Kim Hyun-chang. Parfarm targeted the industry with a "small quantity, high quality" strategy. While general food ingredient companies usually handle 2,000 to 3,000 types of ingredients, Parfarm handles only about 280 types. Prices are also about 1.5 to 2 times higher than competitors.

Because of this, for a while, customers turned away from them due to the "high price." CEO Kim said, "It took 5 to 6 years to establish ourselves, and sales only started to pick up properly 2 to 3 years ago," adding, "Business owners who used to avoid us because of the price but acknowledged the nutritional value and taste now ask us to supply more," expressing pride.

He said, "I was confident that good ingredients would not be ignored even if the price was a bit higher," and recalled, "Ultimately, it was the only niche that could avoid competition from large corporations like CJ and Pulmuone." This was because large corporations excluded small quantities of expensive products from their portfolios due to profitability issues.

Parfarm's star products are Pollock (fish) cutlets and Lemon Mochi Sweet and Sour Pork. The Pollock cutlet is made by filleting line-frozen Pollock and immediately coating it with batter, sold at 1,300 won per kilogram. Although it is twice the price of the same product from competitors (600 to 700 won), it is a bestseller generating over 100 million won in monthly sales.

After establishing an online system last year, they are receiving love calls from overseas markets as well. CEO Kim said, "We launched 'Parfarm Australia' in Melbourne this April and plan to enter the U.S. and European markets within the next five years."

The first product to serve as the foundation will be a "meal kit." Utilizing know-how recognized as a premium product in the HMR (Home Meal Replacement) market, they plan to lead with meal kits currently being developed at the affiliated research institute.

CEO Kim expressed confidence, saying, "We will expand into 30 countries worldwide within 10 years," and added, "Since our employees are working hard as if it were their own business, achieving this goal will not be difficult."

This content was produced with the assistance of AI translation services.