Rhee Bros : Taste of Home
Retail
Written by Amanda Gaines   
Thursday, 01 May 2008
Rhee Bros : Taste of Home - American Executive - RedCoat Publishing
Steve Syngman Rhee outlines the unparalleled growth of this Asian food importer.
Premier Business Partners:

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Knoll Construction
What started out as a way to earn college tuition has turned into a $500 million business. When Steve Syngman Rhee came to the US in 1968, he majored in political science with a plan to eventually return to Korea to become a politician. When he asked his mother to send money to help pay his tuition, she sent him a box of dried squid to sell instead. The popularity of the item grew over time, as did Rhee’s customer base of mom-and-pop Asian food retail stores.

Rhee Bros : Taste of Home - American Executive - RedCoat Publishing
Steve Syngman Rhee, founder and CEO
“When I first started selling Asian foods, there weren’t many other US channels for people to buy the foods they knew from home,” said Rhee, founder and CEO of Maryland-based Rhee Bros., Inc. “By the time I established Rhee Bros. in 1974, I had expanded my merchandise to include stuffed toy animals, imitation flowers, and custom jewelry.”

As Rhee Bros.’ customer base grew, Rhee saw his wholesale business taking off but with a few hitches. Many of the mom and pop stores—the bread and butter of Rhee Bros.—weren’t paying in the 30-day timeframe given by the company. Some were delaying payment, some were not paying at all, and some even closed their doors before the company could collect. The result was the next phase in the evolution of the family-run business.

“Collection problems triggered the opening of my first retail store in 1989 in Rockville, Md.,” said Rhee. Many of Rhee’s customers were unhappy with the decision, but because he was their primary distributor and the company’s buying power allows it to pass along significant cost savings, it was practically impossible for customers to go elsewhere. “They began paying in a timely fashion, and we continued to act as wholesaler to our growing retail customer base.”

More to come
Between 1991 and 2005, Rhee Bros. opened 10 more retail stores throughout Maryland, Virginia, New York, California, Pennsylvania, and Georgia; opened its first chain store in Dallas, Texas; and grew from roughly $150 million in revenue to more than $400 million in revenue. It has also expanded its global purchasing relationships throughout Asia, North America, Europe, Australia, and Africa and provides goods to national US chains such as Costco, Giant, Safeway, and BJs. But the company’s not finished growing just yet.

Two more retail stores are set to open in 2008, and in 2009 the company is opening a family resort-spa complex in Niles, Ill. Once completed, the three-story, 60,000-square-foot complex will house a common area, including a swimming pool, reception areas, and resting areas, on the first floor. The second floor will include a co-ed spa and a Jjimjilbang—a Korean bathhouse and dry sauna built with natural stones and minerals. The third floor will include an international food court with rooftop patios.

“We plan on incorporating a beauty salon and skin care and retail stores,” said Rhee. “We want our customers to have a place to be pampered while enjoying time with their families, having dinner, and then going home to rest.”

Metropolitan Chicago has always been a strong market for Rhee Bros. When Rhee bought the 12-acre plot of land in 2006, he did it with his customers in mind. The location is close enough to the highway that families traveling via the interstate will have easy access, and it’s located near the suburbs to accommodate local residents. The goal is the same as any of the company’s ventures: to provide people that have recently come to the US and those who have been here for years an opportunity to eat the foods they love.

“When people eat well, they are happy,” said Rhee. “My grocery stores are about good food, good price, and good services. We carry almost 12,000 items, including one of our flagship brands, Assi, which means ‘young bride’ in Korean. People have more choices than they did years ago, and the price of our food is almost half of what it was when we started.”

From a cost perspective, Rhee Bros. customers benefit from not having to pay for a middleman as the company ships and delivers its own goods. To further enhance the convenience aspect of the family resort spa, the company plans to develop a hotel of 200 guest rooms on the same plot of land for customers that may be traveling longer distances to access the location.
“We have enough land, and given our demographic research, Chicago is the perfect place to put a spa business and hotel,” said Rhee. “We believe it’s a good investment for us as well as a good service to the community and our customers.”

Bringing it together
Synergy has always been an important element in the evolution of Rhee Bros. Asian foods have become more and more popular among American consumers, and the company has seen an upswing in one of the country’s fastest growing demographics—the Hispanic population. As a result, and because of the synergies between Asian and Hispanic foods, the company is expanding into the Hispanic food industry. In 2007, Rhee Bros. opened its first Hispanic market, La Grande Lotte Plaza, in Riverdale, Md.

“Every item we sell is found in a typical Hispanic food market,” said Rhee. “Fruits, vegetables, fish, meat, and chicken are among our most popular items, which creates a synergy with that growing population.”

Synergy is also important culturally, as the company now has more than 2,000 employees nationwide. The key, said Rhee, is treating each member of the Rhee Bros. corporate family like a real family, respecting the hard work they do, and rewarding them. By passing the cost-savings Rhee Bros. receives to its customers, Rhee also shows customers his appreciation for choosing his company.

“We greatly appreciate our partners.They have contributed to our success, and we look forward to working with them for many years to come,” said Phillip Ahn, project manager at Rhee Bros.
 
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