March 5, 2024
SEOUL – South Korea’s alcoholic beverage industry has been embracing quickly changing trend cycles — from wine to whiskey cocktails and cognac — with rising demand from young consumers to try new types of drinks.
The next type of alcohol that is expected to boom here is tequila, according to industry sources.
According to Samjeong KPMG’s report, South Korea’s wine consumption decreased significantly last year. The value of wine imports dropped 9.6 percent from $560 million in 2021 to $506 million in 2023.
“The country’s consumption of imported wines spiked during the COVID-19 pandemic, but it is gradually decreasing,” the report added.
The value of imported whiskey products, however, posted a compound annual growth rate of 22 percent during the same period. In 2021, the figure came to $175 million but increased to $267 million in 2022 and went slightly down to $260 million the following year. “Domestic consumption of high-end spirits, in particular, jumped in 2022, supported by the increasing popularity of whiskey cocktails here,” the report said.
Although whiskey imports had a setback in 2023, whiskey imports are expected to stay strong, “as the demand for whiskeys, particularly for high-end whiskey products, is expected to expand,” an official from a local whiskey manufacturer said.
KPMG explained that the recent increase in whiskey consumption here has come as younger customers in their 20s and 30s, who tend more quickly to latch onto new trends, started to consume different types of drinks.
“In the past, customer loyalty to a certain type of drink (soju or beer) used to remain unchanged, but such tendencies are getting weaker here,” the report noted.
KPMG anticipated that Korea’s alcohol consumption will become more diversified, and local companies will also try to launch new drinks in the market to target younger customers.
Korean liquor giant HiteJinro, widely known for its soju products, is also expanding its liquor product lineup to include high-end whiskey, sake and cognac products to meet the rising demand.
“HiteJinro will continue to introduce a variety of alcoholic beverages and build a portfolio that includes high-quality imported liquors,” an official from the company said.
The recent whiskey boom here will lead to increases in the consumption of other spirits, including tequila, made from the blue agave plant.
“The country’s tequila consumption has already been on the rise, and the tequila market may boom soon, like the whisky market did in the last two years,” an industry source said.
Local companies are already making moves to introduce tequila products in line with the trend, the source added. Kooksoondang, the country’s leading makgeolli producer, for instance, started this year to sell imported tequila products.
KPMG’s report also noted that the increasing interest in spirit and whiskey cocktails will help other spirits such as cognac and tequila advance in the South Korean market.
According to the Korea International Trade Association’s data, the country’s tequila imports increased 96.2 percent on-year to some 5.9 million tons in 2022 from a year ago. The imports continued their upward trend to reach 6.3 million tons in 2023, up 10.4 percent on-year.
“The tequila imports appear to have increased after the US tequila boom,” said another source from a local company that imports alcoholic beverages. “Many companies are seeing tequila as the next drink that will lead the local spirits market.”
The source also noted that agave spirits are currently experiencing growth in a number of countries outside of the US, and South Korea may join the rally.
Meanwhile, KPMG noted that the younger customers’ demand for no- and low-beverages has increased, as they tend to want to remain in control when drinking. The market for ready-to-drink products has also expanded, the report added.