[IPO Spotlight] Jeju Maekju Aims to Become Korea's Leading Beer Brand Through Global Distribution Network

Since entering the market in 2017, annual sales have grown by 147.9% on average... Regulatory easing such as liquor tax law revision presents opportunities

Partnership with Brooklyn Brewery... Plans to target the global beer market by leveraging global distribution networks

Building an independent business model 'Beer Software'... Aiming to become Korea's leading beer company

[Asia Economy Reporter So-yeon Park] Jeju Beer, a craft beer specialist company preparing for a KOSDAQ listing, held a press conference in Yeouido on the 10th to present its business plans and vision after listing.

Moon Hyuk-ki, CEO of Jeju Beer, stated at the press conference, "Taking the KOSDAQ market listing as an opportunity, we aim to further strengthen our research and development (R&D) capabilities and establish ourselves as one of the top four domestic beer companies based on investments in brewery facilities and personnel." He added, "Furthermore, by actively utilizing the distribution network secured through global partnerships, we will become a beer company representing Korea on the world stage."

Jeju Beer engages in craft beer manufacturing, import, and distribution. Since its establishment in 2015, it has introduced a manufacturing innovation model to the domestic beer industry through strategies such as scaling up production facilities to popularize craft beer. In particular, through a partnership with Brooklyn Brewery, the number one craft beer company in New York, it has secured infrastructure for producing high-quality beer by adopting world-class production facilities and technical cooperation.

Since then, in 2017, Jeju Beer successfully popularized craft beer by consecutively launching products such as 'Jeju Wit Ale,' a wheat beer with added Jeju tangerine peel, 'Jeju Pelong Ale,' and 'Jeju Slice.' The company has incorporated its technology research center as a corporation to serve as the core of R&D and plans to accelerate domestic and international distribution expansion.

The total number of shares offered by the company is 8,362,000, with a desired public offering price band of 2,600 KRW to 2,900 KRW per share. Through this offering, it plans to raise up to approximately 24.2 billion KRW. The company will conduct demand forecasting for institutional investors over two days on the 10th and 11th to finalize the offering price and will accept general subscriptions on the 13th and 14th. The listing is scheduled for the end of this month, with Daishin Securities as the lead underwriter.

◇ Since entering the market in 2017, annual sales have grown by 147.9% on average... Regulatory easing such as liquor tax law revision presents opportunities

According to statistics from the Craft Beer Association, the domestic craft beer market size recorded approximately 88 billion KRW in 2019, showing an average annual growth rate of 43.8% from 2013 to 2020. Due to changes in consumption patterns and alcoholic beverage drinking trends, interest and demand for differentiated premium beers are increasing, and the market size is expected to expand even faster.

Jeju Beer has also shown rapid growth since entering the market in 2017 with the launch of 'Jeju Wit Ale.' It recorded a 5.1% market share in the craft beer market in 2017 and secured a 28.4% share by 2020. Sales have also grown sharply, achieving an average annual growth rate of 147.9% since 2017, reaching 33.5 billion KRW in sales in 2020.

The company quickly responds to market changes by securing various product packages and diversifying sales channels. Currently, among craft beer companies, Jeju Beer is the only one that has introduced packaging facilities capable of producing kegs, bottles, and cans. It is also the only craft beer company that has entered all five major convenience store chains and four major large supermarkets. It has secured diverse distribution channels ranging from entertainment venues such as restaurants, pubs, and bars to home channels like convenience stores.

In particular, after the revision of the liquor tax law last year, Jeju Beer secured price competitiveness and was the first in the craft beer industry to enter the convenience store '4 cans for 10,000 KRW' category. Additionally, within the first half of this year, it plans to diversify its product production lines by producing on the mainland through OEM to overcome some supply shortages, and it will incorporate its technology research center as a corporation to serve as an R&D hub. Taking additional regulatory easing opportunities such as allowing contract manufacturing at other liquor manufacturers, the company plans to focus more on the essence of beer to lay the foundation for product development and business diversification.

◇ Partnership with Brooklyn Brewery... Plans to target the global beer market by leveraging global distribution networks

Craft beer is growing even more rapidly in the global beer market. According to research by the market and statistics group Statista, except for 2020, which recorded sales of 520 billion USD due to COVID-19, sales have been increasing every year. According to research by the global market research firm Fortune Business Insights, the craft beer market size has recorded an average annual growth rate of 10.4% since 2019 and is expected to reach approximately 200 billion USD (about 221 trillion KRW) by 2027.

Jeju Beer began exporting products such as 'Jeju Wit Ale,' 'Jeju Pelong Ale,' and 'Jeju Slice' to India, Thailand, Taiwan, Hong Kong, Singapore, and China in March 2019. It achieved export results of about 86,000 USD in 2019 and about 102,000 USD in 2020. The company expects to further increase export volume through production line expansion.

One of Jeju Beer's competitive advantages is securing a global distribution network through its partnership with Brooklyn Brewery. Brooklyn Brewery has built a global network through long-term collaborations with beer companies worldwide, including Carlsberg, a distribution powerhouse in the Asian beer market.

Jeju Beer plans to target the Southeast Asian market, which is four times the size of the Chinese and Korean beer markets combined, by leveraging the global distribution network. It will promote local production of products through partnership contracts with local breweries and actively communicate with local consumers through flagship store operations.

◇ Building an independent business model 'Beer Software'... Aiming to become Korea's leading beer company

Jeju Beer’s strategy is to develop a manufacturing innovation network by building an independent business model called 'Beer Software,' centered on brewing technology.

Under the vision of beer as a gourmet culture, Jeju Beer invests significant resources in R&D to find and maintain the essential taste of beer as a food. It has acquired various brewing operation know-how and manufacturing techniques from Brooklyn Brewery, developed and applied proprietary technologies, and perfected process management technology suited to Jeju Island’s climate characteristics. Based on this technological capability, it plans to design, develop, and sell customized private brand (PB) products and collaboration products in the future.

Jeju Beer also plans to actively utilize strategies to take advantage of the eased regulatory environment. Many global companies use production facilities worldwide, and Jeju Beer also aims to diversify production channels. By expanding product supply, it plans to reset goals related to expanding new export regions and increasing sales, which had somewhat slowed due to production shortages last year. CEO Moon Hyuk-ki emphasized, "Through the execution of innovative business strategies suited to domestic and international market environments, we will lead both quantitative and qualitative growth in the beer market and leap forward as a beer company representing Korea."