Last Year's Sales 199.9 Billion KRW... 37.6% Increase from Previous Year
Operating Profit Doubled to 21.2 Billion KRW... First Double-Digit Operating Margin
[Asia Economy Reporter Eunmo Koo] Shinsegae L&B, the No.1 wine import and distribution company in Korea, is accelerating its growth thanks to the rising popularity of wine. The expansion of the ‘home drinking’ culture, where people enjoy drinks lightly at home rather than getting drunk, especially after COVID-19, is credited as a key factor.
According to the Financial Supervisory Service’s electronic disclosure system on the 14th, Shinsegae L&B’s sales last year reached 199.95697 billion KRW, a 37.6% increase from 145.4 billion KRW the previous year. Sales, which were around 51.7 billion KRW in 2016, more than doubled to 107.2 billion KRW in 2019 within three years, and then nearly doubled again to almost 200 billion KRW last year in just two years. Operating profit also more than doubled to 21.2 billion KRW compared to the previous year.
Besides Shinsegae L&B, other major domestic wine importers such as Geumyang International and Ayoung FBC also posted strong results, with sales exceeding 100 billion KRW and operating profits nearly doubling. Geumyang International recorded sales of 134.5 billion KRW last year, growing 46.7% from the previous year, and operating profit increased by 90.6% to 26.5 billion KRW. Ayoung FBC also saw sales of 101 billion KRW and operating profit of 11.1 billion KRW, growing 45.7% and 85.0% respectively compared to the previous year.
The improvement in performance was mainly driven by the home drinking culture spread by COVID-19. In particular, Shinsegae L&B’s daily wine ‘G7’ saw shipments reach 2.09 million bottles, a 15% increase from the previous year, reflecting growing interest and demand for wine among younger consumers. Additionally, the reduction of promotional activities such as in-store tasting events and offline events due to COVID-19, along with the optimization of logistics systems, also had a positive effect.
Furthermore, the expansion of its own liquor specialty stores, ‘Wine & More,’ contributed to the improved performance. As of April this year, 46 Wine & More stores are in operation. Nine new stores opened last year, and this year, in addition to two stores opened earlier, seven more stores are scheduled to open. By expanding distribution channels from mainly selling within the group to external sales channels, the sales proportion within the group decreased by about 10 percentage points to 48.5% last year from 58.5% a year earlier.
This year, considering the increasing number of consumers who care about health and the environment, the company plans to expand its lineup of eco-friendly wines. Currently, Wine & More sells over 350 types of eco-friendly wines, including natural, vegan, and biodynamic wines, and sales of eco-friendly wines increased by 96% compared to the previous year.
In addition to wine, the company plans to become a comprehensive liquor distribution company by importing and selling various types of alcoholic beverages. Last month, Shinsegae L&B launched a new sparkling beer called ‘Lets.’ The company plans to expand Lets’ distribution network not only in the home market but also in the entertainment market. Currently, it is sold at franchise businesses such as Whale Beer Warehouse and Brothers Chicken Feet, and the company plans to further expand sales in the entertainment market through negotiations with chicken franchises and others.
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