GUADALAJARA, Mexico – On the final night of her four-day trade mission last July 12, Gov. Chris Gregoire hosted a reception at an old-style Mexican hotel here to toast the signing of a new deal.
A Jalisco distiller of a premium brand tequila and the Washington importer who owns exclusive rights to sell it in the U.S. had agreed to expand their partnership to the Philippines, South Korea and Vietnam.
A straightforward trade deal, right?
Not for Sang Chae, the tequila importer from Washington.
While Gregoire toasted the Jalisco-Washington partnership, Sang allowed himself a momentary flashback.
“How did I get here?” he asked himself.
EARLY CHALLENGES
This boy born into a middle-class family in post-war South Korea, a third world country then where middle class meant so poor that Sang ate meat one day a year on his birthday.
This boy whose father thought him so weak of mind and body that he enrolled the 10-year-old in tae kwon do martial arts training.
This boy who – at 14 in May 1977 with no understanding of English – immigrated to the U.S. with his family and settled in South Tacoma.
This boy whose American classmates routinely laughed at his mispronunciations when he read aloud in English class at Mount Tahoma High School.
This boy who thought of himself as “the typical Asian nerd. Thick glasses. Always studying. Few friends. Invisible to girls.”
This boy who knew nothing of the American dream but grew up to prove the existence of it.
MOVING TO TACOMA
Then some 150 guests in the ballroom at the Quinta Real Guadalajara Hotel erupted into applause.
How did Sang Chae get here?
His father, Tae Chae, had graduated from the selective and prestigious Seoul National University. He taught high school for a time then managed a furniture business that traded with Japan.
Tae remembers his firstborn son, at an early age, as a crybaby. That observation shaped the father’s future parenting decisions.
“He was a little mentally weak, but his school achievement was pretty good,” said Tae, now a semi-retired real estate broker living in Fife.
In South Korea and Tacoma, he enrolled Sang in tae kwon do training. After Sang graduated from high school, “I pushed him to go into Army ROTC,” Tae said. “I thought it make him mentally and physically strong.”
In Korean culture, father rules. “Nothing I did seemed good enough for him. But I thought he was a god,” Sang said of his father. “I think I was a teenager before I knew he went to the bathroom.”
So Sang joined the ROTC, which paid for his business degree from the University of Washington. His tour as an Army lieutenant took him to the demilitarized zone in between North Korea and South Korea.
But when the Army started to downsize in 1988, it offered its lieutenants the chance to shift to the National Guard before their four-year active-duty commitment expired.
Tae advised his son to get out. So he did.
LOOKING FOR SOMETHING BETTER
Back home in South Tacoma, Tae Chae had evolved into a successful real estate broker, working primarily with Korean clients. But Sang had trouble finding work.
He borrowed money from his parents to open a neighborhood minimarket at the corner of Sixth Avenue and Proctor Street in Tacoma. He wanted a master’s degree in business. But instead he enrolled in the University of Puget Sound Law School, at the suggestion of his father.
“That was the toughest period of my life,” Sang said. “The store didn’t make any money. Many days I could not afford lunch. But once a week I would go out to eat at a Korean restaurant on South Tacoma Way. I’d see all the people at other tables eating barbecued pork and drinking soju” – a Korean rice liquor.
“I couldn’t afford that. I remember telling myself that one day I would be wealthy enough to eat all the barbecued pork and soju I wanted.”
The self-talk worked. Sang became a go-to attorney for many Korean business owners and investors in Tacoma and Lakewood from his office just off South Tacoma Way. He had so much work he never had to advertise.
“He is known by everyone in the Korean community,” said Oksun Wilson, Sang’s first English as a Second Language teacher at Baker Middle School. “He was a smart student. He worked really hard. Incredible, well-mannered. I knew at the time, he was going to be a very successful man someday.”
As his law practice boomed, Sang added husband, father of twin boys and real estate investor to his résumé.
In 1998, after the birth of William and Ryan, Sang decided to get into real estate to make money for his boys’ future. He and his wife, Connie, formed William Ryan LLC. Sang bought a dilapidated shopping center in Kent with less than half its retail space filled. He fixed it up, filled it with tenants and sold it five years later for double what he paid.
The deal-making hooked him. He bought and sold small office buildings. He moved his law practice to Bellevue and bought a home in Kirkland, while keeping his stock of South Puget Sound legal clients. Today he owns hotels in Washington, California and New Mexico.
A NEW PARTNERSHIP
And then …
The story of Sang’s connection to tequila starts like an unpolitically correct joke: “A white guy, a black guy and a Korean guy …”
Sang met with two of his close friends and mentors. They all wanted some new business to launch together. Some product that involved travel to warm places.
Kyle Johnson, one of the top-rated attorneys in Seattle, and Percell Johnson, owner of an international custom packaging company in Redmond, talked with Sang about their options – tequila, golf clubs, fruit juices.
Their favorite idea? Avocados. Not as food but as oils, lotions, bath butter, facial scrubs and makeup. They could buy organic in Mexico and ship to the Far East, where Sang had contacts.
Sang scouted opportunities in Mexico and came back empty. Meanwhile, on a separate trip to Mexico in search of packaging business, Percell met a hotel auditor who had a contact who had a brother-in-law who had an uncle who made a premium tequila.
Percell overnighted the odd-shaped bottle of Aha Toro to a friend – Carl Horton, president and CEO of The Absolut Spirit Co. – in New York. Percell asked for an expert taste test and some advice.
“He said, ‘This is a great product. Sign it up if you can,’” Percell recalled.
But Sang, Percell and Kyle didn’t know good tequila from bad. They opted to explore other premium tequila brands that wanted a handler in the U.S. or South Korea.
“Everybody’s had a bad experience with tequila,” Kyle said. “Either they woke up in the morning and didn’t know who they were sleeping with or they woke up in prison or the woke up somewhere with no clothes on.
“We didn’t want to deal in something people get drunk on. We were united in the idea that we wanted a premium tequila. We wanted the best we could find. And we looked at some that, frankly, were more expensive. But they were not as good. … We see our product as similar to a single malt scotch or cognac. Something you sip slowly.”
But why would Héctor Lizrraga Castelo and his wife, Maria Lpez Garibay, entrust Aha Toro’s future in the U.S. – potentially its largest market – to three guys from the Puget Sound region who had zero experience between them with liquor? Even if they did, would the state Liquor Control Board allow them to sell it in Washington’s crowded liquor stores?
GETTING A DEAL DONE
Sang’s friends warned him off the venture.
“A lot of people said we’re crazy to get into this liquor business.” he said. “We figured if we couldn’t sell it, we could always drink it.”
Even Percell Johnson’s friend with Absolut told him launching a new brand in a state like Washington would require a $10 million campaign.
“He told me, ‘You guys don’t have that kind of capital to invest. How are you going to do it?’”
They didn’t know. But they first had to win the right to import Aha Toro before they worried how to persuade people to buy it.
They also didn’t know four other U.S. companies, all bigger with spirits industry experience, were courting Aha Toro. Yet Sang flew to Los Angeles to meet Héctor and Maria for the first time in December 2004.
Did he make a good impression?
“You really want to know the truth? We didn’t know what to expect,” Maria recalled with a laugh earlier this month over dinner in a Guadalajara restaurant with her family, Sang and a News Tribune writer.
As they talked with Sang that day in 2004 and over the next six months, Héctor and Maria decided they could trust him. And they liked him.
“Once we met him, after he explained all of the commitment to Aha Toro, we never have any doubt,” Héctor said. “Our life and values. Many are similar to those we find in Sang.”
So Sang, Percell and Kyle won the right to import Aha Toro to the U.S. But they needed to work state by state to get government approvals and then find distributors willing to sell it.
ENTERING THE U.S. MARKET
They started with the Washington State Liquor Control Board – and got turned down the first time. The cork lids on some of the samples they sent ahead popped out of the bottles, said Roger Hoen, a member of the Liquor Board.
A cork change at the factory in Mexico fixed that. The next time they went back to the board, Sang, Percell and Kyle went together.
The multicultural partnership intrigued the board enough to grant the lowest level of distribution in Washington for one of the three Aha Toro tequilas, the reposado. That meant the board wouldn’t require liquor stores to stock it but would allow them to special order it starting in March 2006.
“I told them I thought this would be the last I would see of them,” Hoen said. No way could rookies with a shoestring promotional budget win in a competitive market against big, moneyed names in premium tequilas.
“You know what? They actually went out and did it,” Hoen said. Last July, the Liquor Board approved a second Aha Toro tequila, the blanco. In April the board will consider allowing the sale of Aha Toro añejo.
Now, you can buy Aha Toro in five U.S. states, and Sang expects to add at least three more by the end of the year.
However, the sales and promotional travel schedule required Sang to drop his law practice in 2006. Sang’s father didn’t like that, but says he didn’t press it with his son like he might have years ago.
“Now I don’t push him too much. I advise him that life is short. Life is limited. Don’t work so hard,” Tae Chae said. “I am very proud of him. Very proud.”
This month Sang spent three days in Jalisco, visiting Aha Toro’s agave farm, distillery and bottle makers this month. Late one night they laid on the cobblestone courtyard at the agave farm’s hacienda for a few minutes looking at stars in the clear sky. Afterward Héctor and Sang talked of their growing business – and their partnership.
“I made the right decision choosing Sang,” Héctor said. “It is working very well. I like to have my business relationships with friends. You can have more lasting relationship than you can with a big company.”
Sang doesn’t speak Spanish. Héctor doesn’t speak English or Korean. So they talk to each other through an interpreter.
Yet they do share one word. The men no longer refer to each other primarily as Héctor and Sang. They most often call each other hermano. Brother.
Dan Voelpel: 253-597-8785
dan.voelpel@thenewstribune.com">dan.voelpel@thenewstribune.com
