[Interview] 'Roasting Digitally?' A New Paradigm for Coffee

Interview with Brownback CEO Son Jongsu

Early in the morning or after lunch, our essential course is definitely a cafe. This is because a caffeine boost is necessary to have a productive day. Thanks to this, buying a cup of coffee on the way to work or stopping by a cafe after lunch has become a must. However, the era of ‘subscribing’ to coffee rather than visiting cafes in an analog way has arrived. With the advent of the With-Corona era, remote work is gradually decreasing, and more office workers are returning to their workplaces. As the importance of in-house welfare is emphasized, office coffee machines are gaining attention. A groundbreaking innovation in the coffee industry! We met with Son Jongsu, CEO of Brown Bag.

Hello. Please briefly introduce your company.

I am Son Jongsu of Brown Bag Co., Ltd., connecting technology and people to make humanity more convenient and colleagues happier. We are transforming the coffee industry through data-driven coffee tech and coffee subscription solutions.

Since many people find it hard to get through the day without coffee, I think the coffee market is huge. How did you start your coffee business?

The coffee consumption rate in Korea is about 2 cups per day on average, which is much lower compared to about 4 cups in Japan and about 5 cups in the U.S. Also, while instant coffee accounts for around 10% on average in OECD countries, in Korea it approaches 80%, so I anticipated the era of whole bean coffee was coming. I wanted to help local cafes operate successfully and provide cafe-quality coffee that office workers desire right in their offices.

Brown Bag has recorded a high retention rate of 99%. What do you think is the secret behind this?

Other traditional coffee bean manufacturers had excellent manufacturing competitiveness but had no way to know who was buying their beans, so it was difficult to understand which beans people preferred. Brown Bag started digitally, so by maintaining the number one online coffee sales position since 2017, we were able to analyze sales data to understand Korean coffee preferences through data. By roasting digitally and selling digitally, we could numerically verify which algorithms for producing coffee beans led to purchases and satisfaction among different customers. Since a contract retention rate exceeding 99% is rare worldwide, when Brown Bag’s office coffee subscription service BLISS surpassed 400 customers, we conducted a full survey. We were curious why customers continued to use our service. The results were ‘66% for cafe-level taste, 18% for excellent digital-based service, and 18% for price competitiveness derived from research capabilities.’ So, we focused on coffee and pioneered the subscription market.

Is the coffee bean the main factor that determines the flavor of coffee? What other factors are there?

According to papers such as those from the SCAA, 80-90% of coffee taste is determined by the beans, 5-10% by the barista, and 5-10% by the machine or tools. However, through the vast data accumulated by Brown Bag, after segmenting taste preferences, we realized that the delivery of taste is also important. Just as plating and the chef’s explanation influence taste in a restaurant, the sensory delivery of coffee is very important. Brown Bag has focused on this and is conducting a project to reinvent the coffee experience.

What is the most popular coffee bean at Brown Bag?

Analyzing over one million orders, we found that Koreans prefer a nutty flavor and enjoy coffee that tastes like coffee. In that regard, ‘Retro,’ which belongs to the nutty beans category, and ‘Tango,’ which belongs to the coffee-like coffee category, are popular. However, coffee is a preference product, and everyone thinks their own taste is the right one. So, we hope people enjoy various beans and discover their own style.

Is the difference between beans, drip, and cold brew clear?

Beans are products made by roasting and blending raw green coffee beans. When ground beans are brewed by hand, it’s hand drip; when brewed under pressure and heat, it’s espresso; and when brewed using contact time with water, it becomes cold brew.

While prices are rising, many low-cost coffee brands are emerging. What is Brown Bag’s competitive edge?

The coffee industry is almost a barren land where digital technology has hardly been applied. Good store operations and the development of portable instant coffee have already been demonstrated at near-peak levels by Starbucks and Dongseo Food. Brown Bag applies digital technology to the coffee industry to help local cafes, which were most marginalized during COVID-19, gain competitiveness comparable to Starbucks, and create a completely different dimension of coffee experience that can bring perfect happiness to office workers exhausted every day, making the world more meaningful.

Most coffee beans are imported. Has anything changed since COVID-19?

Raw green beans are imported, but both the import and manufacturing volumes of roasted beans are large. Both are growing and continue to grow even after COVID-19. However, it is heartbreaking that independent local cafes, which account for over 80% of the 150,000 cafes nationwide, suffered the most damage during the pandemic.

When did you feel the most rewarding while running the coffee business?

It was very sad to see colleagues at many startups unable to endure and leave. That is why, at Brown Bag, we strive to create a healthy culture that conveys and shares the joy, meaning, and sense of growth in work so that colleagues can find their true lives. The greatest reward comes when I directly or indirectly feel that my heart and efforts reach others. The heroes of startups are not the CEO but the customers and members. I feel the greatest reward when each person’s life finds its true self.

What future does Brown Bag dream of?

We want to make humanity more convenient. We want to help industries that have not yet been subscription-based or serviced to transition through digital technology, enabling everyone to live a smooth life without feeling difficulties or inconveniences and focus on the essentials. From the coffee industry to life tech in general, there are many elements that need digital transformation today. Together with various companies, we want to innovate the subscription industry and create the digital era, bringing perfect happiness (BLISS) and infinite joy (GLEE) to people’s lives.

Photo provided by Brown Bag

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