A 15-year veteran employee, referred to as A, has recently felt a sense of generational change during department gatherings. Once frequent, these events have dwindled to about once a month, with younger employees often opting out, citing commitments like exercise or language classes. A noted, "Whereas past gatherings were all about drinking heavily, now it’s common to wrap up after a meal with just a light drink."
The domestic alcohol market is facing a significant blow due to changing drinking cultures and a growing emphasis on health. The impact on the spirits market, particularly whiskey, has been severe. The whiskey industry, a hallmark of high-alcohol beverages, is experiencing a sharp decline in performance, leading to restructuring efforts. Both soju and beer are also facing sluggish sales, prompting alcohol companies to seek new opportunities in low-alcohol and ready-to-drink (RTD) products.
According to industry sources, Diageo Korea, which operates the whiskey brand Johnnie Walker, has recently begun accepting applications for voluntary retirement from all employees, offering up to 36 months of salary and a special severance payment of 20 million won. This marks the company's second round of layoffs in about two years. Last year, Diageo Korea's operating profit plummeted by 48.1% to 9.4 billion won compared to the previous year.
Competitors in the whiskey sector, including Golden Blue and Pernod Ricard, are also experiencing poor performance. Their operating profits fell by 36.3% and 71.6%, respectively. Golden Blue has not paid performance bonuses, which typically range from 100% to 130% of monthly salaries, due to last year's poor results, and discussions of a potential zero bonus for this year are ongoing.
Companies focusing on soju and beer sales are also feeling the chill. Hite Jinro reported a 3.6% drop in consolidated sales (59.08 billion won) and a 10.8% decrease in operating profit (5.59 billion won) in the first quarter compared to the same period last year, with both soju (-2.2%) and beer (-7.9%) sales declining. Lotte Chilsung Beverage also saw significant drops in sales across major alcohol categories, including beer (-25.3%), wine (-2.3%), and spirits (-17.5%).
In response, alcohol companies are seeking to adapt and find new paths forward. Despite an overall decline in alcohol consumption, low-alcohol and RTD products are emerging as new growth categories. Companies are strengthening their product lines and exploring new demand through sports marketing and expansion into overseas markets.
Lotte Chilsung Beverage has lowered the alcohol content of its soju brand Saero from 16% to 15.7% and is expanding its fruit wine and 200ml product lines. The RTD brand Soonhari Jin is also capitalizing on the growing demand for mixed drinks. The recently launched Saero Omija sold over 2 million bottles within a month, while Soonhari Jin achieved sales of 17 billion won in the first half of the year, surpassing last year's total sales of 16.2 billion won, driving growth in RTD sales.
Hite Jinro introduced the top-selling Japanese RTD brand Kirin Hyoketsu Momo to the domestic market last year and recently added a lemon flavor. They have also launched products like Terra Light, which has about one-third fewer calories than regular beer, and various flavored soju options. Their subsidiary, Hite Jinro Beverage, has expanded its non-alcoholic lineup with the addition of Hite Zero 0.00 Lemon & Yuzu.
Marketing strategies that once centered around drinking gatherings are now expanding into sports and leisure activities. OB Beer has promoted its non-alcoholic and low-calorie products, such as Cass 0.0, by hosting running events in collaboration with Musinsa Standard Sports, targeting the 2030 demographic. During the North and Central American World Cup, they operated viewing pubs, pop-up stores, and AI-based participation events.
To overcome domestic market limitations, companies are accelerating their efforts to penetrate overseas markets. In particular, fruit-flavored soju, which emphasizes lower alcohol content and sweetness, is emerging as a key player in international markets, coinciding with the spread of K-content. According to the Korea Customs Service, the export value of liqueurs, including fruit soju, reached $10.41 million last year, a 4.3% increase from the previous year.
Hite Jinro, which offers a series of export-exclusive A-Soju flavors like plum, strawberry, peach, lemon, and melon, reported a 6.9% increase in sales of other flavored spirits, totaling 107.5 billion won last year. Lotte Chilsung Beverage is also expanding its overseas reach, with a 15% increase in fruit soju exports in the first quarter of this year compared to the same period last year, leveraging its distribution networks in over 40 countries, including the U.S., Southeast Asia, and Europe.
Ryu In-soo, head of the Korea Alcohol Industry Research Institute, stated, "While the overall market is experiencing a downturn due to weakened consumer sentiment, trends toward lighter drinking centered on low-alcohol, low-volume, and highball beverages, as well as carbonated drinks based on low-alcohol spirits, will be important growth drivers."
* This article has been translated by AI.
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