Liquor market in Korea hits record $7.4 bn

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South Korea’s alcohol market grew to a record 10 trillion won ($7.49 billion) last year as Covid-19 pandemic entered its endemic phase. The alcoholic beverage market is expected to surpass the amount in 2023, according to forecasts citing that drinking alone or at home has become a widespread trend among young Koreans as social gatherings become more frequent. Shifting alcohol consumption preferences, particularly among those in their 20s and 30s, also played a role in the market’s overall growth.

According to reports by Maeil Business Newspaper on Friday that studied data on liquor taxes, the total volume of alcoholic beverages shipped by domestic companies, an indicator of the liquor market’s size, amounted to 9.9 trillion won as of 2022, up 13.3 percent from the previous year and the highest amount since 2005.

The domestic liquor market peaked at 9.4 trillion won in 2015 before entering a period of decline. The market stabilized at around 8.8 trillion won amid challenges posed by the pandemic before seeing a rapid resurgence last year.

The reports also showed nearly every type of liquor, including beer, soju, and whiskey, exhibited growth over the past year and of these, beer experienced the biggest growth with 4.1 trillion won or 14.4 percent.

Premium soju, whiskey, and traditional liquor are other categories that exhibited significant growth. The combined market worth of these three categories of alcoholic beverages was a modest 167.5 billion won in 2021, but witnessed a remarkable surge, doubling to 323.3 billion won within the past year.

Distilled soju, predominantly led by premium brands including Hite Jinro Co., also experienced substantial growth, doubling from 64.6 billion won to 141.2 billion won. Whiskey, particularly favored by consumers in their 20s and 30s, witnessed a remarkable surge, more than tripling from 5.8 billion won to 19.2 billion won. Crafted traditional liquors also saw robust growth, increasing by 73.1 percent from 94.1 billion won to 162.9 billion won.

Premium soju is experiencing a surge in popularity, led by the popular Won Soju launched by Jay Park in February last year.

Korean traditional liquor has also gained popularity, especially among younger customers who have increasingly turned to a new dining experience combining traditional Korean cuisine with traditional liquor.

Meanwhile, household consumption data also suggested the ongoing expansion of the alcohol market. According to the Bank of Korea, South Koreans spent 16.9 trillion won on alcohol and tobacco last year, the highest level recorded to date and the domestic alcohol market is expected to surpass that record in 2023. Households spent 8.57 trillion won on alcohol and tobacco purchases in the first half of the year, which is expected to surpass 17 trillion won if this trajectory persists for the year’s remainder.

“In addition to the increasing number of social gatherings and growing popularity of new alcoholic drinks, low levels of economic confidence among households amid the economic slowdown also contributed to the increased liquor consumption,” according to Moon Jung-sook, a professor at Sookmyung Women’s University.