hy President Kim Byung-jin.

Korea Yakult has used its current name for 52 years, but the company has decided to ditch it. The step is designed to go beyond its corporate image as a food & beverage company and expand its business portfolio to the distribution sector.

Korea Yakult held a general shareholders’ meeting on March 28 and approved a plan to change its name to hy, with the goal of making a leap into a distribution company.

A new logo of hy.

The company plans to serve the name change as an opportunity to pivot to become a distribution company. It plans to develop a new business model by adding logistics to the refrigeration distribution network, its core capabilities.

The company plans to expand its product portfolio by forging strategic alliances with other companies and stepping on the gas to develop functional probiotics materials. It plans to expand eco-friendly materials’ application and purse ESG management.

Korea Yakult released the brand “Yakult,” a first lactic bacteria fermentation product in 1971 as an explorer of the Korean lactic acid bacteria fermentation market.

The company posted 1.07 trillion won in sales last year. The products accounted for 300 billion won of total sales, while the brand Yakult segment continued to decline to 87 billion won in sales as follow-up products have come up.

Company officials have shared the view that even though products, yielding more sales, have been released, the company’s name has been trapped to the name of the Yakult product itself.

The name change may be construed as the company’s challenging new businesses rather than “being trapped to the name “Korea Yakult,” a kind departure from familiarity.

But for management, ditching the current name, which has become a household brand, would be not easy.

Whenever the company was faced with a crisis, it managed to overcome hardships with in-house innovation and changes.

As the milk fermentation market went into a stagnation stage in early 2010, Korea Yakult’s mainstay products, such as Yakult, Will and Coopers had slower growth.

The company introduced the 220-liter, large-sized refrigerator cum electric cart “Koko,” manned by female salespersons to break the stagnant milk fermentation business. The step brought rising sales.

President Kim Byung-jin, confidant of reinforced distribution capabilities that could lead to a success, hinted a possibility of a change of its company name in January, saying that the food industry had not grown as much as e-commerce, IT and other sectors.

With changing its name to hy, the company plans to expand non-face-to-face refrigerator distribution networks.

The company plans to aggressively make an inroad into non-face-to-face refrigerator distribution market by introducing the “Koko 3.0,” armed with unmanned settlement and inventory management functions using Wi-Fi and AI technologies.

Views of fermented milk items, produced by hy. (Photos: hy)

The company has confidence with the success of its online fresh food shopping mall “Fredit.”

Fredit, which made its debut in 2017, now has a membership of more than 1 million people. Fredit is an online and off-line integrated platform in which if orders are placed on-line, female delivery women, called “fresh managers,” deliver products at home.

The company has 11,000 fresh managers across the nation. Fredit has about 700 products put on the on-line market. Some 560 products or 80 percent of the total are produced by companies other than hy. The reason is that hy now aims to make a leap forward as an integrated distribution company.