Overview: Domestic alcohol shipments have reached a 27-year low, marking the lowest volume since the 1998 IMF foreign exchange crisis. Total shipments dropped to 2.988 million kiloliters last year, falling below the 3 million kiloliter mark that had not been broken once since the crisis.
The Full Story
Beer shipments dropped by 7.2 percent last year alone, marking the third consecutive year of decline. Soju also fell for the third straight year, dropping below 800,000 kiloliters, while makgeolli has been declining continuously for five straight years without a single break. Drinking habits have changed significantly; those who drink alcohol at least once a month used to drink 9 days a month on average, but that has now decreased to 8.8 days. Even per-drinking-session consumption has steadily edged down from 6.7 glasses to 6.6 glasses. The demographic that drinks the most is men in their 30s, who consume about 8.1 glasses per day when they drink.
Whisky companies, in particular, have seen prominent deterioration in their business performance. Operating profits have been cut in half, and some places have seen drops of over 70 percent. Looking first at the company that distributes Johnnie Walker, its domestic operating profit plummeted from 18.2 billion won to 9.4 billion won last year, while its net income swung from a surplus of 15.1 billion won to a deficit of 11.2 billion won. As a result, the company recently accepted applications for voluntary retirement from all employees, marking the first time since 2024, or two years ago. The company that sells Ballantine’s and Royal Salute is also in a bad situation. Its operating profit plummeted by over 70 percent, and its net income shrank to one-seventh. Golden Blue, a homegrown whisky company, even turned to a net deficit in the first half of this year. Lotte Chilsung also accepted voluntary retirement for the first time in 75 years since its founding, back in November of last year.
Amidst all this, there were exceptions. Finding new breakthroughs through low-alcohol and non-alcoholic, so-called “zero” products, total non-alcoholic beer sales in the first quarter of this year surged by 30 percent compared to the same period last year. Notably, OB Brewery leveraged its non-alcoholic and alcohol-free products to maintain the number-one manufacturer market share in the household non-alcoholic beer market. The importer of Tsingtao beer also turned a deficit into a surplus last year by promoting its non-alcoholic beer. Department stores are expanding services that custom-prep everything from fruits and vegetables to fish and meat according to customer preferences. Related sales have also shot up sharply.
What This Means
Buying alcohol at convenience stores and drinking alone at home—known as “homsul” or “honsul”—has firmly established itself as the major trend. To compete with online shopping malls, offering fresh, high-quality ingredients combined with taking care of cumbersome food preparation is currently the weapon department stores can put forward.
Consumer Takeaway
The market offers a shift toward non-alcoholic options and home consumption habits. Department stores are adapting by providing custom-prep services to compete with online shopping malls, while whisky distributors navigate significant financial downturns and workforce adjustments.
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