Energy Drinks in South Korea

2020 IMPACT

Work and study from home policies drive growth of energy drinks in 2020

Already experiencing notable demand prior to the pandemic, supported by consumers’ increasingly busy, stressful lifestyles, energy drinks in South Korea was given a further boost in 2020. Work and study from home policies introduced after the emergence of COVID-19 were the core growth driver for the category’s performance, resulting in a notable upturn in off-trade volume and current value growth, while demand through on-trade significantly declined.

Health and wellness trends less influential on development of energy drinks in South Korea

While health and wellness is impacting a number of soft drinks categories such as juice in South Korea, energy drinks, like carbonates, is less influenced by these trends, as consumers who purchase energy drinks, including the younger generation aged 10-30 years, are less concerned, and specifically choose these products for their functionality. Price, taste and caffeine content are therefore the three major indicators for South Koreans, while sugar content is not always the first factor to be considered in the purchase decision.

Lotte Chilsung Beverage remains dominant leader of energy drinks in 2020 but loses notable share to Coca-Cola

Lotte Chilsung Beverage remained the dominant leader of energy drinks in South Korea in 2020. The company benefits from strong brand awareness of its signature energy drink brand, Hot 6, in addition to being supported by a nationwide strong logistics and retail network.

RECOVERY AND OPPORTUNITIES

Shift towards on-trade in 2021 before return to greater normalisation for off-trade in terms of demand from 2022

Energy drinks is set to experience a decline in off-trade volume terms in 2021 in line with greater demand through the on-trade channel, depending on the threat level of the virus, if younger adults are able to return to bars over the early part of the forecast period. Nevertheless, 2022 is set to see a greater return to normalisation in terms of demand, with positive off-trade volume growth over the remainder of the forecast period, as consumers are more likely to return to their daily lives and routines in terms of working and studying.

Energy drinks sees opportunity from “Corona Blue”

COVID-19 created a new use for energy drinks as a stress reliever, with the category expected to emerge as a stress relief measure for those who experienced “Corona Blue” in 2020. In South Korea, the term “Corona Blue” has often been used to describe people who have felt trapped at home and irritable during the pandemic.