Korean restaurant chains should target China first: consultant

The Korean food chain industry is quickly expanding overseas on the back of growing global interest in Korean food in recent years.

Korean restaurant chains, however, should realize that there are only two markets in the world to which they can successfully take Korean cuisine without much alternation, a U.S. hospitality consultant has said.

“I’ve met many Korean government officials and I have advised them that the No. 1 market is China and No. 2 is Japan,” Joel Silverstein, president of East West Hospitality Group, which provides consulting services for food service retailers and private equity firms in the Asia Pacific region.

“In the U.S. and the rest of the world, they have to undergo very radical customization for the local market,” said the 59-year-old, who briefly visited Seoul last month to advise U.S. casual dining chain California Pizza Kitchen on its Korean market strategy. He is former CEO of Outback Steakhouse, Asia Pacific, and franchisee of Outback Steakhouse in Japan.

In China, the third most popular food is Korean food, following Japanese food, he said, adding that “The U.S. is unlikely to be a big market.”

Because there is already an ethnic Korean population in China, there is “a huge opportunity” for Korean restaurant chains in the country, he said.

However, Silverstein noted that Korean CEOs in the retail sector are not as “worldly” as their counterparts in the high-technology sector represented by Samsung and LG.

“If you look at high-tech companies like semi-conductor companies or consumer electronics in Korea, they’re run by worldly people but the Korean restaurant industry is very domestic,” he said.

“They don’t speak English very well, definitely not Chinese. It’s a huge barrier for them to go overseas and develop a business.”

Silverstein went on to advise that Korean food chain heads bring Chinese people to Korea and make them part of a Korean team to map out a plan for business expansion in China.

He also suggested to the Korean government that it bring over chefs from around the world and introduce them to Korean ingredients and flavors so that they can use them in their cooking.

Silverstein also talked about CPK’s strategy and challenges in Korea.

CPK in Korea aims to introduce the authentic flavors of CPK and additionally offer new localized food styles, he said.

He said that the Korean people’s openness to the U.S. style of casual dining will help the chain grow faster in the country than in China or Japan.

However, it will be challenging to please the Korean people’s palate, which is skewed towards spicy and sharp flavors, he said.

By Kim Yoon-mi (yoonmi@heraldcorp.com)