How Smoothie King Invented—And Then Re-Invented—The Smoothie
Nearly 50 years ago, Smoothie King not only created the smoothie category but came up with the name. Today, the company continues to be a partner in the healthy and active lifestyle of millions of people every day. I sat down with Wan Kim, CEO of Smoothie King, to learn about his journey first as a franchisee and now as the CEO and owner of the company.
Dave Knox: I want to start with how you first became involved with Smoothie King. You joined as a franchisee in South Korea in 2002, but then a decade later in 2012, you purchased the entire company from the founders. What led you on that journey and to make such a big decision in 2012?
Wan Kim: It was all about our mission and vision. I became master franchisee back in 2002 and opened about 110 locations in South Korea over eight years. The market got saturated, and I wanted to find another business that could fulfill my mission, which is inspire people to live a healthy and active lifestyle. So while making money, also fulfilling the mission, it was really hard because I couldn't really find any other brands that can actually fulfill those two. That's when I decided that I wanted to keep pursuing my dream, but this is the brand that I want to keep doing it with and investing in. That's when I approached our founder to explore if he’d be willing to pass the keys to me when he retired. He thought about it for about a year and then he said, 'Wan, I need to see you." That's how I closed the deal with him.
Knox: When you took over as CEO in 2012, Smoothie King was less than 500 units in size. Today, you have over 1,100 units and growing every single week. What really ignited that rapid growth?
Kim: Once again, going back to mission to inspire people to live a healthy and active lifestyle. Based on the mission, we really set our vision on where we wanted to be in 10 years. So our vision is we want to be the integral part of every health and fitness journey. Based on that vision, we are actually using our mission and vision as our filter. We seriously make every decision based on our mission and vision, and we actually have every strategy that's set based on our mission and vision. So by focusing really in our mission and vision, we were able to really deliver a lot of things under this one vision. Then actually people can recognize it and people actually enjoy seeing it because we are not really delivering anything other than our vision that we are focusing on.
Knox: Smoothie King really offers only one thing, smoothies, very appropriately with the name. With your mission and vision, why do you maintain a sole focus on a singular product versus exploring other product offerings that lead into that healthy and active lifestyle?
Kim: In 1972, Smoothie King was started and our founder, when he created the food and the concept, he's the one who named this category as a smoothie. So he is a really original guy who created this product category. But what's interesting is when he actually created this category, he wanted to cure his own allergy. Also at the same time, he actually told us he created more than hundred smoothies in his life, but whenever he created any smoothie from the beginning, it wasn't really about the flavor, it was about the purpose. So going back, he was really thinking about our vision. He was already doing it in 1973, but he just didn't articulate it that way.
Going back to when created this category, a lot of people think of the smoothie category as a refreshment, but it's not. For example, when he created the product called Hulk, Hulk has about 1,000 calories. I wasn't proud of that product because I always thought of it as a milkshake with a thousand calories. It's not healthy. When I asked him, he said, "Wan, one of my neighbora, she was going through chemotherapy and she was losing so much weight, so she wanted to gain weight back." She asked him to create something help her to gain the weight back. Since then, Hulk has been the drink for a lot of people who go through chemotherapy in this country because they need lots of good calories to gain the weight back. That's just one example, but a lot of our products have great purpose behind it, and of course, we try to make those purpose very delicious as well.
Knox: As you've led this transformation of focusing on healthy and active lifestyles, how difficult was it to initiate a system wide rebrand across the 500 stores?
Kim: Changes are always hard. Without fully understanding our mission and vision, some of our franchisees, including our team members, were afraid, and I totally understand that. That is also my job, try to really communicate better with these people along the way, so that even though they may not fully understand and see where we are heading, but at least, I communicate, keep communicating, so that it's not lack of communication as the reason that they don't understand. That's what we've been doing it, and why I believe there are always tipping points. Meaning when I bought this company, I do not believe we had many team members or franchisees who really believed in our mission and vision. What I did was start to hire team member who wanted to do this because that's what they believed in. Also, at the same time, we tried to recruit more franchisees who also want to do this because they believe in our mission and vision. Then there is a tipping point. Once we have more people who believe in this mission and vision, then all of sudden people who don't, what happens? There is a tipping point. I think that's what happened by 2017. When we went through all the changes, it resulted in a lot more people in our system who believe in our mission and vision now.
Knox: When you're playing in the world of healthy and active lifestyles, there's always a new trend and oftentimes a new fad that comes about. When you look at this, how do you think about these constantly evolving lifestyles and consumer preferences and which ones you're going to bring in to Smoothie King?
Kim: We initiated Clean Blends about five years ago and believe it is the foundation of our product. But you are right, that the trends keep changing and we have to keep up with it. We always communicate to our team members that Clean Blends is a never-ending story. We are going to keep going and meeting people's needs. That is why Clean Blends is no artificial flavor, color or preservative, no GMO fruits, 100% gluten free, and about two thirds of our smoothies have no added sugar. Then also we have created No-No list, same as Panera Bread, and we were able to eliminate so many bad stuff in our ingredients. We tested every single ingredient in our kitchen to accommodate these needs. When trends changes, we are going to keep evolving.
Knox: It's common for Smoothie King to partner with other brands when you're crafting your smoothies such as FITAID for the high intensity fit smoothie and Premama for the pre mama prenatal smoothie. How does Smoothie King think about choosing the brands to partner with, and how do you ensure that they're living up to the same integrity of Clean Blends and ingredients that you've spent so much time focusing on?
Kim: Whenever we partner with any other company, they have to meet our Clean Blends initiative. So if their ingredients don't meet Clean Blends, then we cannot partner with them. We want to be the integral part of every health and fitness journey. The reason why we call this as a journey is because we want to be side by side with you making sure that we can be helpful in your journey.
For example, you may end up going through the chemotherapy, or you are pregnant, and it's going to be very difficult for you to live a healthy and active lifestyle for that time period. That's why we created the Premama smoothie and we created the Daily Warrior smoothie with American Cancer Society three years ago. They can show that we can be side by side with you when you want to live a healthy and active lifestyle, even in those tough times.
Knox: For sports fans, they know Smoothie King through your partnership with the NBA's New Orleans Pelicans and the naming rights that you have for that arena. One of the interesting things on that deal was that the NBA wanted to hire a third party to test all your products, which is something you usually don't see with sponsorship deals. What was that like, particularly since you were in the middle of the Clean Blends initiative?
Kim: They actually test our products every year, making sure that our products meet athlete's needs. Our product need to be athlete friendly, meaning any athlete, not just the NBA players, so when they actually consume our products and they go through the test, they are not going to be any problems with it. That is what the NBA really wanted to make sure, but also at the same time, they review all of our claims, making sure that we don't have any false claim as well. So that was a pretty interesting journey for us because once again, we want to be an integral part of every health and fitness journey. The NBA helped us to do that.