Chapter 104: A New Flavor (3)
TL: Hanguk With the tasting wrapped up, we gathered in the conference room on the second floor of the student center, and for the moment we put our energy into filling our stomachs around a single huge pizza.
"Mmm... this is pretty good."
Chewing on his pizza, Armando flipped the box over and spread out the thick stack of evaluation sheets with his left hand, the one without grease on it, scanning through them. The last time we'd gone over the evaluation sheets, I'd done it with the dread of watching a horror movie, but today Armando's hand moved without the slightest hesitation.
And there was no tension on the faces of the friends watching him, either.
"This is definitely different from yesterday. Everyone's reacting well. They're all asking, when on earth are you going to sell this?"
Jacob, eating pizza alongside me, posed the question.
"Earlier you said it was right to get the patent done before launch, didn't you? What kind of patent are you talking about?"
"There could be several. The stabilization process for light fruit soju, for one, or the hybrid distillation process that links the pot and the column together."
"I don't understand a single word of that."
"It sounds complicated when you just hear it, but once you actually get into the content, it's not all that hard. Well, it's still not something you can take lightly, that's true. First we'll do a Provisional Filing, then within twelve months we'll file the Non-provisional."
If the equipment had backed me up a little more, I could have applied for patents at an even higher level of technology, but even this much would make it hard for a big liquor corporation to muscle in easily.
"So the first thing we have to do is register the patent?"
"Yeah. And while we're at it, we'll need to expand the equipment."
As Jacob nodded, Chloe cut in.
"So whose name is the patent going under?"
At Jacob's flinch, Chloe spoke calmly and evenly.
"I know Brian holds a 30% stake in Golden Grain Soju House, but I think the patent is a little different. To keep things clear, Brian should file the patent, and Golden Grain Soju House should pay the patent costs and take it on exclusively."
"No, hold on..."
As far as I was concerned, there was no need to go that far. Whatever came in to me as royalties meant less revenue and a smaller dividend for me. Sure, receiving it separately as royalties was advantageous, but I wasn't sure it was necessary to go to these lengths...
"No, I think you're right. Dad used to say something like that too, and Mom always said that when you do business with friends, you should put everything down clearly in a contract. So nobody gets hurt feelings. Just like Chloe says, you file the patent and I make the liquor using it. That's exactly the right way to do it."
In moments like this, the cultural difference between America and Korea really did seem to show.
"Well, in that case... I've got no complaints. I'll handle filing the patent myself, then. You just go ahead and start with the equipment expansion I tell you about."
"Sounds good. I'll do that."
I started explaining as I wrote on the whiteboard with a black marker.
"First, we need a mixing tank. At least 200 liters. We also need an RO Unit that can purify 500 to 1,000 liters a day, plus a chiller and a microfilter housing... You've got the semi-automatic bottling machine, right?"
"Yeah. We've got that."
"With this much, it should be sorted out in about two weeks. Just about every decent equipment supplier is clustered around Napa or Sacramento, so getting hold of it won't be hard."
"If I ask the place that did our distillery's equipment, it'll be handled right away. But the recipe doesn't go into the patent?"
"The recipe... it's better not to put it in. We just keep that as our secret. A secret is more reliable than the law."
I drew a single line on the whiteboard.
"This side is the 'process', meaning how it's made. We lock this up with a patent. And this side is the 'ratio' or the 'blend', meaning what goes in and how much. We deliberately leave this out of the patent. The moment you patent it, the ingredients used, the ratios, the order of the process, the temperatures, the times, all of it gets disclosed. Once a certain time limit passes, anyone can use it."
"Ah... I see. So then what if someone copies our process later?"
"Then we sue them on the spot."
At my words, Jacob started polishing off his pizza with a satisfied smile.
With the work at the school done, I returned home and began preparing for the patent registration. Cerasia's bottling and shipping had to move forward at the same time, so there was plenty to do, but I didn't find it the least bit hard.
Even with the workload high, all of it was being driven forward by my own will, so as hard as it was, it never felt hard.
A few days later, I got on the phone with the patent attorney. The voice coming through the speaker was quick and crisp.
"Hello, Mr. Brian. You're going to put in the Provisional Filing first today, right?"
"Yes, today if possible. Hybrid distillation, the stabilization process, the filtration method, the device structure, and aroma protection. Five filings should do it, correct?"
"Good. In the specification, just put in the figures and the sequence. For example, 'alcohol concentration 38 to 43%', that kind of thing... You know what I mean, right? Those numbers are important."
"Yes, I'm aware. I'll be counting on you."
After getting the patent application filed, I headed for Jacob's distillery. With December nearly upon it, the vast rice fields of Sacramento were full of a bleak feeling, but in my heart spring already seemed to have arrived.
"Welcome! I've been waiting."
The moment Jacob saw me, he showed off a steak he'd prepared in advance. He'd been bragging not long ago about buying a new barbecue grill, and here he was putting it straight to use.
"Eat up, Brian."
"This is Cerasia, launching soon. I'll leave a case behind when I go."
When I presented this year's first Cerasia, Maggie's eyes went wide.
"Oh my, I hear this is all the rage these days?"
"Haha, it's good for gifting to people around you, and it goes well with seafood, meat, all of it."
"Why don't you two have some right now?"
"We have to drive when we leave, so it's hard to drink more than half a glass."
Maggie's cooking wasn't bad at all, and after I'd polished off her steak along with the corn, potatoes, and other staple crops, I went up to Jacob's room, took a file folder out, and laid it on the desk.
On the cover of the folder, the words Redwood Lab Holdings LLC were written in bold letters.
"What's this?"
"A company I set up. A research firm I own 100%."
I opened my notebook as I spoke.
"The fruit soju we make at Golden Grain will be set up so it borrows and uses this research firm's technology."
"Oh, I see. So you made a corporation instead of doing it as an individual."
Filing a patent under an individual's name meant all the royalty income got counted as personal income, so the tax rate was high. But registering it as a corporation allowed the intellectual property income to be processed as corporate income, which meant research costs, equipment purchases, and consulting fees could all be expensed. In other words, the effective taxes went down and cash circulation became easier, so setting up a corporation could be called essential.
"You've probably already understood the structure, so I don't really need to explain it any further, right?"
"I'm not an idiot. I get it."
"Heh heh, right. It's a contract I prepared, so give it a read."
I took out the contract I'd prepared from the folder.
"First, we can exclusively make soju and soju-based fruit soju products 'only in North America.'
Second, in return for that, we give 4% of net sales to Redwood Lab as royalties.
Third, the minimum guarantee is set at 80,000 dollars in the first year, 140,000 in the second, and 200,000 dollars from the third year on. This is pretty brutal, isn't it?"
"Read a little further down there. It says if the sales fall short, you don't have to pay it."
"Ah... so it does."
Jacob breathed a sigh of relief and went back to looking over the contract. The math was rolling quickly through his head. 4% wasn't much. If anything, the terms were better than other distributors'.
"This is fine."
He figured that with the sales 'The One' was already generating on its own, plus the additional sales the fruit soju would bring in, he could comfortably handle terms like these. In any case, the royalty on the patent side was only 4%, so it wasn't all that burdensome either.
"You're really okay with this?"
"Yeah, I think I can handle it just fine. And honestly, from the very beginning right up to now, you've drawn up every single business plan for us. You came up with ideas like the fruit soju, too. This much isn't too much to give."
"If you think of it that way, I'm grateful."
"I'm the one who's grateful, what are you talking about? I just sign right here, yeah?"
And so Jacob confidently finished signing.
In mid-December, Redwood's third product, Cerasia, launched and once again kept growing the numbers in the bank account. At the year-end department stores, Cerasia sat on display rack after display rack, and the gold ribbons hung over the glass bottles glittered under the lights.
Chloe, Armando, Jacob, and I each enjoyed our own shopping at the department store before gathering at Redwood Winery.
Now that the year's farming was finished, everyone had some breathing room and should have been leisurely enjoying dinner, but Jacob and I had one more thing on the schedule.
"Brian! Your guest is here."
Dad's voice rang out, and soon a familiar voice came into the aging cellar.
"To see your friends once again, I couldn't be happier. I'd say it's one more gift for the year's end. Hahaha!"
It was Malcolm Lee of Unity Spirits, who distributed Golden Grain Soju House's vodka, 'The One'.
"It's been a while. Have a seat."
Curious about why these four friends had called him here, yet with an expectant look in his eyes, he took a seat.
At the look in his eyes, we glanced around at each other with odd smiles, then took a clear glass bottle out of a bag and set it down.
"We've made a new liquor."
"Vodka?"
When he tilted his head at the clear bottle, I took out a soju glass, opened the cap, and poured.
"Rather than explaining, just try it first."
In America, people don't normally accept some unknown drink that someone hands them. America is a country where drugs are common enough that you're warned to even be careful about leaving your glass unattended, but given the circumstances, and given that this was a winery, he tossed it back without hesitation.
"Mmm~"
The moment he drank it, his eyes went wide. He downed the rest of what was left in the glass in one go and again savored the rich peach aroma in his mouth.
"What is this? It's not a soft drink, but... it's seriously good?"
Seeing how much he liked it, the friends laughed as if they'd known he would. I poured him another glass as I spoke.
"What you just drank is fruit soju. We made it."
"Fruit soju?"
"Yes. It's a light liquor made for people who don't like the strong smell of alcohol. But you shouldn't assume that because it tastes of fruit, it must be weak. It's a full 13 percent."
"13... You'd be sipping away at it and then get hit by it all at once?"
"Exactly. There probably won't be a better drink for making moves at college than this."
Having tried the liquor once more, he traced a deep smile across his lips and said,
"Haha, this is killing me. It's a drink that feels like a total joke, and yet if you asked me whether it has no market value, there's no way I could say it doesn't. The young folks are going to go crazy for it, aren't they?"
"They are."
I even took out the label I'd made in advance and showed it. The label, which read 'The One – Peach Light Soju', looked as fresh and bright as actual peach juice.
"A soju that smells of peaches... This is neither wine nor vodka."
"To put it precisely, it's right in the middle. The alcohol is 13 percent, the aroma is light like a fruit wine, and it goes down smooth."
Malcolm opened the cap and took in the scent, then wrinkled the tip of his nose.
"This is totally a soft drink."
"That's the point. A liquor that's like a soft drink."
He rubbed his palms together and even smacked his lips. I could feel right away just how excited he was at that moment.
"If we were to grant you the rights, how would you go about distributing it?"
Rather than asking about the contract terms first, I had led with the distribution strategy. Not wanting to let this opportunity slip away, Malcolm didn't answer right away but thought for a moment before opening his mouth.
"This fruit soju is clearly a product that could catch on, but it's hard to grasp the feel of it before you've actually had a taste. I think we'd need to hold promotional events to form the market first."
His opinion was an idea I'd already had from before. So I figured that handing the distribution rights over to his company this time wouldn't be a bad choice.
"All right. Then I'll give you three days. Draw up the contract terms and bring me a proposal."
Only then did Malcolm realize he couldn't sign a contract on the spot. At the words that there was another round of competition left, he actually nodded.
It came from the thought that with an item this good, there was no way there wouldn't be competition.
"Fine, let's do it that way. I'll come back in three days."
He stood up at once and, as if it were already his, tapped the clear fruit soju a couple of times before heading out.
"Are you going to make them compete?"
When Chloe asked, I let out a small laugh.
"No... putting it this way just makes it more likely he'll bring better terms. Since 'The One' is distributed through them, it's better to have the fruit soju distributed through them too."
"Ah..."
I'd grown so terribly curious about how the people who tried the fruit soju would react.
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