Korres co-founder Lena Korres on expanding a Greek skin-care company internationally

0:02Hello, everyone, and welcome to the Modern Retail Podcast.

0:30the difference between the European market, the US market. I know over the last year plus, you've been focusing on hitting the Gen Z demographic. And also you're in a space that's really hot right now, quote unquote, clean beauty, which I know you've talked about in past interviews before, just how this has always been what you guys have been doing. But now it's something that more people are caring about. I want to just go into all those intricacies. But Lena, how are you doing? Thank you for joining. Hi, Kayle. I'm doing great. I'm in New York. Now this time of the year with my team. I'm traveling between New York and Greece, you know, around the year.

1:00Thank you for having me. Wow. What a cosmopolitan lifestyle. Yes. New York and Greece. Yes. So first, why don't we talk just about who you are? You've been at Chores for a very long time. But what what were you doing before? And how did you end up in the skincare business? Okay. So yes, I've been with Corrace from the beginning. So with Yorgos Corrace, we founded this brand 1996, like you said earlier. And before that, I was just, you know, I was fresh out of the university when I started. So before that, I was in, I was studying chemical engineering. And, you know, when I graduated, I was like, I loved my school.

1:44I loved engineering. I loved all of that. But the good and the bad thing is that you can do so many different things. You don't, you know, have a pre-described, you know, route. And many engineers, you know, they go down the route of heavy production and, you know, heavy industry. But I was more like, I've always been very outdoors. I love nature. I love, you know, natural products and all of that. So when I found myself in the Correst Pharmacy, in the original Correst Pharmacy, before the company was founded, where I met Yorgos as well, I was kind of, you know, enchanted because it was this magical place where they had, you know, everything from herbs.

2:26You could go there and find thousands of remedies, herbal preparations, everything that anybody needs from, you know, herbal medicine. And that there was a cult following, you know, in the pharmacy, like people went there, there were even, you know, personally handmade prescriptions, there was everything you could ask for. And everybody But it was a scientist as well. And me being a scientist, I was always, I do not want to go home and fix something in my kitchen. That was not my dream at all. You know, with my science background, I wanted everything to be, you know, super, you know, done properly and documented and everything.

3:03And I, when I got there, I found myself thinking that, you know, right now, the offering that we had, you know, in 1996 of natural products was extremely limited. and not only limited, but also you had to compromise. There were simplistic products. Everything looked brown and boring and, you know, kind of, you know, ancient really. So going in the pharmacy and meeting Georgos, you know, what we, you know, started dreaming about was a product, a brand that would be really scientific, would have fantastic, you know, aesthetics in terms of the texture, the look and feel, but also how the product, you know, the design of the product would be as natural as possible and super efficient because George is a pharmacist.

3:53I'm a chemical engineer. So we wanted, you know, our science to go into the product. And that's really how everything started and how I went into skincare. This is something I wanted to ask because I was doing research before and I knew that you guys had been around since the 90s, but I didn't realize that it started with the pharmacy. How common was, because I know that like US pharmacies, we have a very specific association and they're not what a European pharmacy is, I will say. And I'm sure we'll talk about this more. But like, how common is it that a pharmacy will make its own products, or at least in Greece?

4:23In Greece and in Europe, it's common, but in a small scale of, you know, products that you will make in the back room of the pharmacy that normally they have to go in the refrigerator, you know, they don't have any preservatives. So they're really simplistic. They're a better version of what you can do at home. if you have, you know, some basic knowledge. So that happens. And, you know, when I went to the pharmacy, there were already those type of products in the pharmacy. We had some really successful, you know, creams sitting in that little refrigerator where people, you know, came and bought.

5:01But that was, you know, not what we were dreaming about. This is going to be a decades-long question. You launched in 1996. And it's, you know, you've had a really interesting trajectory. I know that I was reading up, I believe you had a launch in 2008 in the US, but then you did a much bigger relaunch, I want to say in 2018. Is that correct? Well, there are milestones, but actually our story with the US goes much further behind and it's a really... Walk me through all these milestones. I want to hear that. Yeah. It's a really interesting story because, you know, when we started, you will discover through the stories, we did not have a business plan really because we were both...

5:41Yeah. Yeah, we were both scientists. We were too young. We didn't have, you know, the background to sit down and say, okay, this is a business plan. This is how we launch. This is what it's going to look like. What we knew very well and what our passion was, was the product. So we wanted to do like a state of the art, the most efficient, the most exciting natural product out there. That was everything we, you know, we put our hearts in. Now, what happened is that, you know, we started, you know, doing those products and there was a huge demand actually in the pharmacy we had so many people coming and saying we get everything for you from you why can we not get our beauty products from you so we started doing you know our brand we founded the brand we started doing our very first products and then because Greece is a destination as you know there is it's a highly touristic country there is so many people you know from around the globe visiting Greece in the summer so what happened is that we had two different distributors, like one in LA, one in New York, that were in Greece for holiday on the island of Crete.

6:44And they saw products in the pharmacy because we started distributing our products outside our own pharmacy. So they saw their products on the pharmacy on the island of Crete. And they both came back to us and asked, you know, to talk about, you know, bringing the products in the US. It was the time, the era before email, believe it or not. So we were communicating through facts. You don't hear that much these days anymore. Honestly, yeah, that's how it happened really. And, you know, that was not easy at all, you know, to communicate in this way. So we came in New York and we visited New York and LA and we met with both of them and decided to work with one of them here in New York.

7:25He was an amazing guy and his whole business model was that he was American. He was a lawyer, very well educated, but he had a passion for European products. So what he did is he created this company where he brought products from Europe. He ended up doing a small brand of his own also from Portugal, from Italy, from Greece, bringing products here in the US. So 1996, the brand was founded and it was like maybe a year later, we were such a baby company, not knowing anything, you know. of this, you know, crazy business world. And he brought the products here and we found ourselves in Beauty Bend, in Beauty Bender, in Anthropology.

8:09There was a website at that time called beautyjungle.com. And we were, you know, in the discoveries from around the world and we were, you know, really doing very well there. So that was the first steps that we took here in the US. So that was already maybe 1998 that I'm talking about. And the funniest part is that we had no presence in Europe, but at that time, Harvey Nichols, which is the number one trend-setting retail environment in Europe, Harvey Nichols in London, it's a fantastic store, very upscale, beautiful, amazing concepts, very pioneer. you know, they were bringing so many new things in the market.

8:53And they decided, they were thinking at that time, and they decided that we make it difficult for beauty consumers to shop because we have brands like Pores or Aveda or Dr. Hauska that are, you know, they have a story, they have, you know, an origin, they are natural, they are, you know, all of those things. And then we place them next to Estee Lauder or Clinique, and it doesn't make sense for the consumer. So they decided to launch a space they called Beyond Beauty, which would be the destination for all those cult, beautiful brands that had a different story to tell. And of course, were natural or organic or something like that.

9:33And they had an oxygen bar, then they had a juice bar. So they created this beautiful space. And in order to do that and to find those brands, they sent their buying team all over the world in the big metropolitan cities of the world. So this lady from Harvey Nichols, London, goes to New York to scout brands and she finds us in Henry Bendel. Loves the brands. So the first shipment to London went from New York instead of going from Greece, which, you know, London and Greece are both in Europe. Because, you know, it happened through our distribution here in New York. So being in New York really opened the doors for us.

10:14Apart from, you know, getting a presence in this market, it was the first step that really created the domino effect because Harvey Nichols was such an establishment and everybody was looking at Harvey Nichols that then after Harvey Nichols, we had one year exclusivity. We did amazing with them. And honestly, not everybody did amazing. There were 80 brands in the beginning and only 20 moved forward after the first year. So it wasn't an easy business to fight for, but it was a beautiful environment. And then it was Selfridges in the UK and Liberty and then Bon Marche in France and like Harrods and everyone, all the big department stores around Europe, you know, they wanted to have the brand because of the success with Harvey Nichols.

11:02So New York has been, you know, such a beautiful thing for us and a beautiful story because it really propelled the global presence of the brand. That is wild. Yeah, that is wild. You had a thing in New York, a random guy found you in Cree, and then that's how you got to the rest of Europe. So for those early 2000s then, was your distribution focused getting in those higher-end department stores in Europe specifically? Would you say that? Or how did that coalesce from there? Well, thank God we realized soon enough that there are several ways to do distribution in a country, apparently. But we did not have the financial means or the team to support a distribution that would be massive.

11:54So what we did to expand our brand is really have a solid presence in all those windows of the world. Because those big department stores, there is one or two or three in each country. in the big metropolitan cities where you can really have a presence and then you create the awareness for your brand because people travel. Everybody who will go to London will step foot in Haralds and Harvey Nicholas and Selfridges and all of those places. So then everybody that goes to Paris will go to Bon Marche and Galerie Lafayette, et cetera, et cetera. So when you accomplish that type of distribution, your brand starts building a global awareness and you're not already distributing Sephora or a partner like that because those partners require much more investment and support and team and all of that, which you cannot do if you're a very new brand.

12:50So that's how we grew our brand globally. And at the same time, because our heritage is the pharmacy, and actually I forgot to mention earlier, which I think is a beautiful thing to understand, that before we made those beauty products, we were doing herbal remedies. So we have the knowledge of more than 3 ,000 herbal remedies, which means we have the knowledge of how those natural ingredients work in your body when you take them morally before you put them on your skin. That heritage, that knowledge, we didn't want to walk away from that. So we were always trying, wherever we could, to have distribution in the top pharmacies, also in the European cities, because the European pharmacy model, like you said, Kaylin, in the beginning is very different.

13:35The European is a destination for good products, for amazing advice, for value for money, but products that really work and that are clinically documented versus the US pharmacy model is more of a drugstore, more of a supermarket, more of a place where you can find everything really for your home. In Europe, it's not like that. It's only your medicine and your super selected beauty products. I actually wanted to ask you about that because this is just a personal fascination I have because whenever I'm in Europe, I think the pharmacies there are so nice and you can just sort of browse and see all these products.

14:15But what is, how does, and maybe it's different now than it was 10, 15 years ago, but like, how does distribution work for those? Because they're usually independently owned and operated, my understanding, but then they still have the same ubiquitous signage that says Apotech or whatever in that language, whatever it is. Yeah. So like, does each country have its own set of specific distributors who then go to every pharmacy? Do you have to make inroads with each pharmacy itself so that you can get distribution there? How does that work? Yeah, no, you're right. They're independent pharmacists, really.

14:49Or best case scenario, you might have a chain of, let's say, 10 pharmacists. But, you know, that's nothing out of the thousands of pharmacists that exist in the European countries, because it's really, you know, one in every corner, more or less. And they're really small and beautiful and, you know, curated and all of that. So that's how it works. You have to find a distributor that has the sales force, the sales freak to really visit those pharmacists. You have to visit them. You know, you have around, you know, you just, you know, you have to visit them. per quarter you have to visit more or less everyone or if they're smaller pharmacists twice a year or if they're very important customers you know every month but we decided to build that on our own because that's our home country so in greece our biggest strength right now and of course the brand we have this the brand is a beautiful thing in greece because you know it's it's kind of the pride for greek people and there is no family in greece that raises their children without some of our products.

15:45There's no house that you will not find our products. We have this unbelievable awareness of 99.6%, which is insane. I know, I know, like, you know, people love the brand. So, you know, when we were riding a wave, you know, so, you know, the brand was getting so much love just out of our own pharmacy and then distributing to other pharmacies. And then, you know, having our friends talk about it. And so that we decided that in our home country, we will be, of course, our own distributors. So now we have a fantastic sales force that visit our customers and we know our customers personally and by name.

16:24There are many, there are about 6 ,000 pharmacies in Greece. And then we have our trade marketing team that goes and, you know, really merchandises the product properly and puts the window, you know, decoration and kind of create little events in the pharmacy. So we have that powerful team that activates in Greece, but we cannot, of course, replicate that with our own team in the other European countries. So there is where we need to go with a distributor that has the same structure to go into the local pharmacies and do all those things. How many people do you have specifically just on the team for Greece specifically?

17:02the uh for the team on greece you know that that sales and trade marketing team is is maybe more than 100 people wow and like that that's many more i imagine than for any other geography you have right yes yes that's correct yeah we have a massive distribution and you know we do it on our own yeah what is your biggest market uh like geographically is it the usa just because of the size or like does greece actually stand up to it with having so many people doing it yes exactly so greece is still number one which is really not what it should be maybe and and definitely the u.s is number two so uh but you know the potential in this market you know to grow is always uh you know greece is a 10 million people market it's so tiny all right now that we know that the u.s is number two let's go back to how it's been going with the u.s so you had your you know department stores the higher end in the 2000s throughout europe uh You deployed into more boutique pharmacies throughout Europe.

18:03When did the U.S. become a focus once again? I would say, yes, around maybe 2009, 2010, which was right after the crisis in the U.S. We had a distribution with Sephora. We actually had our own boutique in Soho on Worcester Street at that time because we wanted to bring, you know, the pharmacy environment. It wasn't the pharmacy, but really kind of, you know, the breadth of the assortment and, you know, the way we want to talk about the ingredients and the way we want to talk about grease, all of that you cannot really do in a retail environment. But if you have your own store, you know, in a very, you know, nice spot, then you get to give this experience to people.

18:50So it was mostly Sephora, our own store, some digital customers, digital partners, and also TV. Somehow we found ourselves with HSN, now it's HSN QVC. And that business actually became very, very big for us. So right now, that's how it started. Right now we do have presence with retailers, we have our TV business, and we have our own digital also, which we are prioritizing really to grow. So we have quite a wide distribution in the US. Of those three, which makes the most sales? Is it digital? Is it stores? Right now, I would say it's still actually TV. TV is massive. It's national TV. You have those numbers.

19:40When I have my meeting with my team and we recap the month, everybody goes crazy when they hear the numbers from TV. because when you say like the productivity there can be like ten thousand dollars a minute when you're on air or you're selling you know a hundred thousand pieces in a day those are you know really big numbers uh but and of course it's a very powerful means but you know amazon is doing amazing for us sephora and ulta you know very strategic partners for us and of course our own digital is growing and and you know we want to grow this not to compete with the other environments, mostly for the experience, to be able to give, you know, to people the experience.

20:22At some point, my dream for digital here in the US is to be able to give people access to things that they cannot have through other brands. Why? Because most of the brands here in the US, they buy a product, you know, from a third party manufacturer, you put your label, your name, and yourself and that's all you have for me it's the exact opposite we are a vertically integrated model where we do everything in-house and that is our beauty as a brand and i think that's such an amazing you know experience to get people in we have our farmers we grow our own ingredients i can really i wish to to streamline the next harvest of the oil of the olives and how we We produce our olive oil.

21:07We have our R &D, which is in-house. I have my killer R &D team of women, chemists, chemical engineers, and we formulate the products in-house. We have production in-house. We even have our own recycle lab where it's a huge, huge, really industrial scale. It's not a lab, industrial scale facility where we recycle plastic, paper, and carton. So these things, if I can bring them to life through our website, this is the dream here and what I want to do. Because sales, we can achieve through all of our partners. But to be able to bring people into that universe is something very unique, which I think is exactly what we need to achieve to do justice for our brand and really tell the things that we are here to tell.

21:57And we have been doing for 25 plus years. That was something I wanted to ask you because I was reading an interview you did maybe a year or so ago, year and a half ago, where you mentioned pretty much how you want to be telling your own story digitally. You want to be focusing on this. And my understanding was that it was a focus kind of on live streaming and that you would be doing it on your own website. Is that still the plan or sort of how are you looking at this in-house production and telling your own story and how do you see that manifesting? I don't have this figured out yet, to be honest.

22:25but I want to yes live streaming will definitely be part of it because the exciting thing is that you can watch things live of course there is time difference and there is those those things so you need to tackle this but you can really show what's happening in the lab when you you know you you create a product or you can show what's happening in the fields when you harvest the ingredients you can show all of that so that's something we're still figuring out I wanted to ask just about the evolution of product expansion over the years because you've gone beyond just skincare i know you're in i believe you're in fragrance if you're if i'm not mistaken and you're in a few other things so like how have you chosen specifically because you're so vertically integrated and you're making everything when you want to expand when you want to go into something new and to make sure that you have the bandwidth to do that yes it's a very different situation in greece versus let's say the u.s because in greece we have so many product categories you would not believe and that happened because we are like i like i said we have such a big brand awareness that people want more and more from the brand and when we can have a meaningful natural proposal in a category we will do it uh you will laugh but you know we have our heritage is skincare that's what we have been always doing and where i think we're extremely strong with formulating natural but super efficacious products and super safe of course because you know safety goes above everything.

23:52But around skincare, we have, you know, body care, we have our pure glycolic collection, we have some hair care, we even have makeup. And the product category that we have been asked for the most in Greece has been baby products. Everybody wanted to have baby products from us because of the trust relationship that we have with our consumers. but honestly to do natural products natural baby formulations that are super safe and where they should be we did not think we could do it with the you know with ingredients we had available in the beauty industry 20 years ago so we ended up launching our baby line something like five years ago I think 2018 and that is a big you know business we have in Greece but I am not thinking to bring everything we have here in the U.S.

24:43Because in the U.S., I want to make sure more of a streamlined story and proposition and people understand what the brand stands for. And the brand really stands for skincare. If I reach a level of awareness where people, you know, understand the brand instinctively and inside out, then there is definitely more expansion to do. But in Greece, that's how it went. Because as we were building really huge awareness, people demanded more and more from the brand i think there is very few brands that experience something like that in their home market sometimes their home market you know is really big or whatever but that level of awareness is a unique situation to be in yeah i cannot think of any example like that where 96 of the population knows about you and are just saying give me more exactly exactly it's a unique and maybe you know it has to do with Greece being a small market, really.

25:39If it is the US, it's a 300 million market. There is no way you can achieve this, apparently. But it's, you know, it's a circumstance that's pretty unique. Absolutely. So let's, we've talked a lot about last decades. What has your focus been on for the last few years? I was, you know, doing some research. I know that you've been trying to expand and especially in the US, I'm pretty sure, get more Gen Z shoppers and do a lot of campaigns focused on them. Is there anything else you've been thinking about or any other expansion plays that have been top of mind? Listen, Gen Z, yes, because, you know, every brand out there, there is no brand out there that wouldn't tell you the exact same thing.

26:13Yeah, that's true. You have to go after Gen Z. Okay, so I am not the brand that will, you know, that will target only Gen Z because we're not a brand that, you know, just was born yesterday or a year ago in the Gen Z era. So we are not that type of brand. But the way I see this really is that we have an elevated responsibility towards the younger generations. And that responsibility has to do with educating them, giving them products that will be good for a lifetime. Because if you think about it the way I think about it, we use beauty products like we use. I don't know if you're a guy. OK, maybe you can get away with two, three products.

26:50But if you ask your girlfriend, there is many products that we use. That means that you are layering so many different ingredients on your skin for 50, 60, 70 years of your life. So the accumulation of those ingredients in your body, whether you're using good natural ingredients or other ingredients, that's super important. It comes down to being equally important with what you eat. So for me, this is where I see the elevated responsibility that I would really like, you know, to educate them and give them the options to use amazing ingredients that will be good for them. Using for many, many years and will, you know, have healthy glowing skin forever.

27:34That's the biggest part of it for me, the way I see it. And being around for so many years as a brand, you get to that point the same way when you're a professional and you grow in your career. You reach a point where you want to give back to other people. You want to mentor other people. As a brand, I feel we have reached this position where we want to make sure we give back to the younger generation's knowledge, beautiful ingredients and products that are good for them. and beautiful values to align. Because like I was saying earlier, that's an exciting brand to align. And I think that each one of us and the younger generations even more so, you have a sense of belonging.

28:15You want to align with things that you believe in. I am like that. I have always been like that. If I read about the brand and I do not like their story, I will never purchase from that brand. So I think brands tell stories, bring out values where you can align. And that's a big part of the shopping. It's the exciting part of the shopping. You want a big part of things that you like. Yeah, that's actually what I wanted to ask you about. Given that you have such a big presence on home shopping networks and you have such a large distribution presence at the biggest retailers, Ulta, Sephora, et cetera, what are the other channels you're hitting in order to reach the US audience?

28:57Or do you even need to hit them because you're in these other places where you have so many eyeballs? And what are the channels that are working the best to get new shoppers new eyeballs? I would say digital, to be honest, because, yeah. And the big retailers. I mean, Sephora is doing an amazing job, you know, attracting new consumers. There is always this, you know, discussion on media. Gen Z like to shop in Sephora, then they like Ulta, then they go back to Sephora. You know, there is all of that happening. So there is, you know, there is massive, you know, Now, people will go in those retailers and shop, so you get visibility.