Beer in South Korea
Euromonitor International's Beer in South Korea market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
Buy online to access strategic market analysis and an interactive statistical database of volume and value market sizes including on-trade and off-trade, company and brand shares, distribution and pricing data.
Tables: 66 | Publication date: Apr 2009
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Dark beer; Lager by origin; Lager by price platform; Low/non- alcohol beer; Stout
Executive summary
In 2008, beer is set to post positive volume sales growth on 2007. Although the beer sector in South Korea is already pretty mature, new niche products from major companies helped to boost the demand for beer from younger drinkers and female drinkers. Since 2007, companies have introduced renewals of their major lager products and also launched new products targeting female consumers, and these new products gained positive responses from South Korean consumers in 2008. In addition, major players implemented diverse marketing activities targeting the 2008 summer Olympic Games from early 2008, including sweepstakes and sponsoring sports events. As a result, sales of beer continued to see moderate volume growth in 2008.
In 2008, the growth rate of beer volume sales was a bit faster than in the previous year, mainly due to the faster growth of premium lager. In 2008, imported premium lager, in particular, was registering stronger sales growth than in 2007. As Koreans increasingly have experience of having stayed in foreign countries and often travel abroad, many Korean people recognise and enjoy diverse imported lager products. As a consequence, the sales volume of imported premium lager has been growing positively for three consecutive years, with increasing marketing activities from foreign companies further boosting the volume growth of imported premium lager in 2008. Companies like Miller and SBP newly established wholly-owned subsidiaries in South Korea for effective marketing and distribution activities and other companies are also expanding distribution of their products in off-trade outlets as well as in on-trade outlets. As a result, imported premium lager saw the fastest sales growth in beer and the sales growth of overall beer was faster than in the previous year in 2008 with the help of faster sales growth in imported premium beer.
Average unit prices are moving upwards for beer in both the on-trade and off-trade channels. As the liquor tax rate for beer was lowered from 80% to 72% in 2007, beer companies did not need to raise the retail price of beer by absorbing the reduced tax amount to compensate for the rising costs. However, in July 2008, the two leading beer companies, Hite Brewery Co Ltd and Oriental Brewery Co Ltd, raised the manufacturers’ price of their major lager products by 5.6% within five days of each other. As a consequence, the average unit price of beer moved upwards. Because domestic beer companies import most of the raw materials for their beer from abroad, the retail price of beer is significantly affected by the price of raw materials in South Korea. However, with the sales share of large PET bottles growing in the off-trade channel and the importance of more casual bars and restaurants growing in the on-trade channel, unit price growth remained at moderate levels in 2008. At the end of July 2008, Korea Fair Trade Commission announced that it would consider investigating if there had been illegal collusion between Hite Brewery and Oriental Brewery in their price increases, as these companies raised the prices by the same amount within five days of each other.
In 2008, all areas of beer recorded positive volume sales growth on 2007. In addition to premium lager, standard lager, which accounts for the majority of beer volumes, also registered continued positive volume growth in 2008. South Korean consumers’ rising preference for alcoholic drinks with a low alcohol content continued to drive growth of domestic standard lager and major companies’ competitive marketing activities also contributed to the volume growth. In 2008, stout also saw positive volume growth, after consecutive annual volume declines over the review period. In December 2007, Hite Brewery Co Ltd introduced a renewal of its Stout brand with new packaging. Stout from Hite Brewery Co Ltd has been a dominant leader in stout sales as the only major local brand over the review period. With the renewal, the company extended the distribution of Stout and launched a new marketing campaign for the brand. As a result, Stout drove the sales growth in overall stout sales in South Korea in 2008.
In South Korea, the alcohol content of beer diversified over the review period. While most lager and stout products have an alcohol content between 4.5% and 5% abv, Cass Red from Oriental Brewery Co Ltd enjoyed great success as a high alcohol content beer with an 6.9% abv. In 2007, Hite Brewery launched S beer with an alcohol content of 4% abv. In 2008, Oriental Brewery Co Ltd introduced the new lowest-alcohol content lager Cass Lemon, with a 3.9% alcohol content.
Production, Imports and Exports
According to Korea Alcohol Industry Association Data, the production volume of beer increased by about 3% in 2007 on the previous year. In the first quarter of 2008, the growth rate was maintained at almost the same level as the first quarter of 2007. In South Korea, the export volume of beer is very small, accounting for less than 3% of total beer production volume. In 2007, beer export volume declined by 19% on 2006.
According to Korea Customs Office, the annual import volume of beer increased by 49% in 2007 on 2006. In terms of product origin, beer from the US accounted for the greatest volume, accounting for nearly 29% of total volume imports of beer. Imports from the Netherlands grew most strongly from 2006, as the import volume grew by 48% in 2007. Despite this strong volume growth in imported beer, the imported beer volume is very small compared with the domestic beer production volume, accounting for a 1% share of beer sales volume in 2008. Between January and May of 2008, the import volume of beer increased by 52% compared with the import volume during the same period in 2007. During this period, beer from the Netherlands accounted for the largest share of the import volume.
Apparent consumption of beer based on production and import/export data slightly differs from market size of beer in Euromonitor International’s data, but shows the same trend. As apparent consumption does not consider inventory volume in the distribution channel, actual sales are different to apparent consumption. For example, the import volume of beer is growing strongly, but the sales volume growth of imported beer is far slower than the growth in the import volume. Because distribution of imported beer is being extended significantly in the off-trade channel, the inventory volume of the products in distribution channels, including retail outlets, continues to grow. As a result, the import volume is growing more strongly than the sales volume growth.
Table of contents
ALCOHOLIC DRINKS IN SOUTH KOREA : MARKET INSIGHT
EXECUTIVE SUMMARY
Moderate sales volume growth continues
Grape wine posts the strongest growth
Hite Brewery Co Ltd leads in volume terms
Off-trade sales growing faster than on-trade sales
Steady outlook
KEY TRENDS AND DEVELOPMENTS
Changing drinking culture leads to steady growth in consumption
Wellbeing trends continuing to have an effect
Young generation and female consumers have increasing importance
South Korean consumers trade up to premium products
Specialist Retailers
Summary 1 Leading Specialist Retailers 2007
Market Merger and Acquisition Activity
MARKET BACKGROUND
Legislation
TAXATION AND DUTY LEVIES
Table 1 Taxation and Duty Levies on Alcoholic Drinks 2008
Table 2 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Sectors 2008
Table 3 Selling Margin of a Typical Domestically Produced Beer Brand 2008
Table 4 Selling Margin of a Typical Domestically Produced Wine Brand 2008
Table 5 Selling Margin of a Typical Imported Wine Brand 2008
Table 6 Selling Margin of a Typical Domestically Produced Spirits Brand 2008
Table 7 Selling Margin of a Typical Imported Spirits Brand 2008
OPERATING ENVIRONMENT
MARKET INDICATORS
Table 8 Retail Consumer Expenditure on Alcoholic Drinks 2003-2008
MARKET DATA
Table 9 Sales of Alcoholic Drinks by Sector: Total Volume 2003-2008
Table 10 Sales of Alcoholic Drinks by Sector: Total Value 2003-2008
Table 11 Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2003-2008
Table 12 Sales of Alcoholic Drinks by Sector: % Total Value Growth 2003-2008
Table 13 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Volume 2008
Table 14 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Value 2008
Table 15 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Volume 2008
Table 16 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Value 2008
Table 17 Company Shares of Alcoholic Drinks by Global Brand Owner 2004-2007
Table 18 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2008
Table 19 Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2008
Table 20 Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2008-2013
Table 21 Forecast Sales of Alcoholic Drinks by Sector: Total Value 2008-2013
Table 22 Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2008-2013
Table 23 Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2008-2013
DEFINITIONS
Sources
Summary 2 Research Sources
LOCAL COMPANY PROFILES - SOUTH KOREA
BOHAE BREWERY CO LTD - ALCOHOLIC DRINKS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 3 Bohae Brewery Co Ltd: Key Facts
Summary 4 Bohae Brewery Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 5 Bohae Brewery Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 6 Bohae Brewery Co Ltd: Competitive Position 2007
DOOSAN CORP LTD - ALCOHOLIC DRINKS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Doosan Corp Ltd: Key Facts
Summary 8 Doosan Corp Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 9 Doosan Corp Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 10 Doosan Corp Ltd: Competitive Position 2007
HITE BREWERY CO LTD - ALCOHOLIC DRINKS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 11 Hite Brewery Co Ltd: Key Facts
Summary 12 Hite Brewery Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 13 Hite Brewery Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 14 Hite Brewery Co Ltd: Competitive Position 2007
JINRO CO LTD - ALCOHOLIC DRINKS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 15 Jinro Co Ltd: Key Facts
Summary 16 Jinro Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 17 Jinro Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 18 Jinro Co Ltd: Competitive Position 2007
LOTTE CHILSUNG BEVERAGE CO LTD - ALCOHOLIC DRINKS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 19 Lotte Chilsung Beverage Co Ltd: Key Facts
Summary 20 Lotte Chilsung Beverage Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 21 Lotte Chilsung Beverage Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 22 Lotte Chilsung Beverage Co Ltd: Competitive Position 2007
BEER IN SOUTH KOREA
HEADLINES
TRENDS
Production, Imports and Exports
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager Price Band Methodology
Summary 23 Lager by Price Band 2008
Published Data Comparisons
SECTOR DATA
Table 24 Sales of Beer by Subsector: Total Volume 2003-2008
Table 25 Sales of Beer by Subsector: Total Value 2003-2008
Table 26 Sales of Beer by Subsector: % Total Volume Growth 2003-2008
Table 27 Sales of Beer by Subsector: % Total Value Growth 2003-2008
Table 28 Sales of Beer by On-trade vs Off-trade Split: Volume 2003-2008
Table 29 Sales of Beer by On-trade vs Off-trade Split: Value 2003-2008
Table 30 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2003-2008
Table 31 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2003-2008
Table 32 Beer: Production, Imports and Exports: Total Volume 2002-2007
Table 33 Beer Exports by Country of Destination: Total Volume 2002-2007
Table 34 Beer Exports by Country of Destination: Total Value 2002-2007
Table 35 Beer Imports by Country of Origin: Total Volume 2002-2007
Table 36 Beer Imports by Country of Origin: Total Value 2002-2007
Table 37 Company Shares of Beer by National Brand Owner 2003-2007
Table 38 Company Shares of Beer by Global Brand Owner 2003-2007
Table 39 Brand Shares of Beer 2004-2007
Table 40 Forecast Sales of Beer by Subsector: Total Volume 2008-2013
Table 41 Forecast Sales of Beer by Subsector: Total Value 2008-2013
Table 42 Forecast Sales of Beer by Subsector: % Total Volume Growth 2008-2013
Table 43 Forecast Sales of Beer by Subsector: % Total Value Growth 2008-2013