Asian Ascent

A grocery distribution firm based in Columbia is thriving on America's changing tastes.

August 10, 2005|By Stephanie Shapiro | Stephanie Shapiro,SUN STAFF

The fragrance of roasting sesame seeds wafts from a corner of the cavernous Rhee Bros. warehouse in Columbia. Mini-forklift trucks zip past pallets stacked high with crates of ramen, soy sauce, hot pepper paste, tea, pickled vegetables, salted jellyfish, soft drinks and rice.

In a second warehouse nearby, a kitchen crew trims mounds of radishes, napa cabbage and scallions in preparation for making kimchi, the pungent Korean staple.

The bustling warehouse tableaux speak volumes about the changing face of America - and its evolving palate.

In 1976, when Syng Man Rhee founded a wholesale grocery distribution company in Silver Spring, he couldn't predict that the nation's Asian population soon would grow by leaps and bounds, prompting an enormous demand for kimchi, noodles, roasted seaweed, sesame seeds and other foodstuffs associated with "home."

The business began simply as a response to fellow Koreans who missed "good food," says Rhee, who in 1989 opened his first retail store in Rockville.

The Asian and Pacific Islanders population in the United States has climbed from 3.5 million in 1980 to 11.9 million in 2003, according to census data. Over the same period, Maryland's Asian population has nearly quadrupled, from 64,000 to 248,000.

The phenomenal growth of Rhee's company, including the March opening of one Atlanta-area store and the planned opening next year of another Atlanta store in a former Wal-Mart, reflects that demographic sea change. This year, Rhee Bros. Inc. expects to surpass $500 million in revenue.

Now headquartered in Columbia, the company, one of the country's largest international grocery wholesaler and retailers, ships 10,000 items imported from 20 countries to nationwide accounts that range in size from mom-and-pop stores to Costco.

Under six private brands, including Kabuto, Penguin and Emperor, Rhee Bros. also manufactures some 3,000 of its own products in the United States and Asia, and operates nine retail outlets around the country, including Lotte Plaza locations in Ellicott City, Silver Spring and Rockville. (Rhee Bros. retail outlets in New York, Los Angeles, Philadelphia, Atlanta and other cities are known by the Assi banner.)

Ask Rhee, 67, if he originally recognized his company's potential and he responds with a shrug. The Korean-born Rhee first came to the United States in 1968 to study political science at American University, but chose not to remain in academia.

Realizing that others in Washington's fledgling Korean community missed their favorite foods, Rhee altered directions, despite warnings from skeptical friends. Today, Rhee attributes the company's success to hard work, no weekends off, quality merchandise and service.

Rhee Bros., as it happens, was perfectly positioned to take advantage of a transformation in American food trends, as consumers from China, Korea, the Philippines, Vietnam, Japan, Cambodia and other Asian countries made their tastes known.

Who better than an Asian immigrant to perceive the unmet Asian demand for plentiful produce, fresh seafood, a sophisticated variety of rice and noodles as well as numerous seasonings and ingredients?

Besides inspiring a new generation of supermarkets, the Asian population in the United States tends to be affluent and wields significant buying power. In 2004, retail sales of Asian and Indian foods reached $3.3 billion, a 27 percent increase from 2000, estimates Packaged Facts, a division of MarketResearch.com.

With parallel preferences for spicy foods, Hispanics, the country's fastest-growing population, also are heading to Asian markets for staples.

The exploration of new flavors and cooking methods by the American public in general also has fueled the growth of Asian markets, as has the gravitation toward more healthful diets that emphasize more soy products and fresh produce and less meat and fats.

Packaged Facts projects that retail sales of Asian and Indian foods will climb to nearly $4 billion by 2009 "as more mainstream American shoppers begin shopping at Asian supermarkets."

The innovations brought by Asians to the nation's supermarkets follow patterns established with the arrival of the country's earliest immigrants, says Michael Sansolo, senior vice president of the Food Marketing Institute. Each wave of immigrants "changed the way America eats," he says.

Companies such as Rhee Bros. will have a lasting impact on the food business, Sansolo says. "Even if they become part of the mainstream, it will [become] a different mainstream," he says. "As immigrants keep coming, we change with them."

Within the Asian wholesale and retail grocery business, competition is fierce, even as its market expands. West of Baltimore, three supermarkets vie for the business of Howard County's growing Korean community and other ethnic groups. Besides the Ellicott City Lotte, operated by Rhee Bros., there is Han Ah Reum Asian Supermarket in Catonsville and GrandMart in Seoul Plaza at Security Square Mall.

Chains' reaction

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