Convenience Store '4 Cans for 10,000 Won' Hindering Qualitative Growth [Craft Beer Economics③]

Craft Beer Market Grows Based on Convenience Store Channel with '4 Cans for 10,000 Won' in Recent Years
Price Cap at 4 Cans for 10,000 Won Limits Diversity and Creativity
Production Cost Limits Lead to Varied Appearance but Similar Styles
Collaboration Products Lacking Context and Beer Relevance Flood the Market

[Asia Economy Reporter Eunmo Koo] "The number of products has diversified, but the styles are all the same." "Beers that seem like craft beers but are not really craft beers." "A feast of collaborations without pedigree."

These are recent criticisms directed at craft beers, specifically those sold in convenience stores. The convenience store channel has become a double-edged sword for the craft beer industry. While it effectively introduced craft beer to the public by capitalizing on the home drinking and solo drinking culture that spread during COVID-19, it is also seen as an obstacle to qualitative growth by confining craft beer within the price frame of '4 cans for 10,000 won.'

The domestic craft beer market has grown in recent years based on the convenience store channel. Since the revision of the Liquor Tax Act Enforcement Decree in 2018 allowed small-scale beer retail distribution, craft beers have boarded the convenience store channel, which boasts excellent accessibility, transforming craft beer from an exclusive product for beer enthusiasts (Maekdeok) into one that general consumers can also enjoy.

At the center of this is the convenience store's beer marketing policy of 4 cans for 10,000 won. This marketing has been well received because it allows consumers to enjoy not only mass-produced beers but also uniquely flavored craft beers conveniently at an affordable price, protecting consumers' thinning wallets. It has played a significant role in introducing consumers to the world of craft beer. Although prices have slightly increased recently to '4 cans for 11,000 won' due to inflationary pressures, the influence of this marketing in the convenience store beer market remains absolute.

Although it has driven the growth of the craft beer market, perspectives on the 4 cans for 10,000 won marketing are gradually changing. It is becoming a constraint on demonstrating the diversity and originality that distinguish craft beer from mass-produced beer and serve as growth drivers. Craft beer has grown by differentiating itself from the pale and light lagers of large liquor companies, which emphasize lightness and cleanliness, by freely using basic beer ingredients such as malt, hops, and yeast, as well as various fruits and herbs, to offer diverse styles. However, the current convenience store channel, where selling prices are effectively fixed, is flooded with light, low-flavor similar products that can meet the supply price.

Kim Man-je, director of the Korea Beer Education Institute, pointed out that confining craft beer prices within the 4 cans for 10,000 won frame is a fundamental problem hindering qualitative growth. He said, "Within the current sales price framework, it is difficult for companies to produce high-flavor craft beers that can differentiate taste and aroma. Since only light and mild craft beers can generally be distributed, products may appear diverse at first glance, but most styles are actually similar."

Sevenbrau 'Gompyo Wheat Beer'

As the environment makes it difficult to offer craft beers differentiated from mass-produced beers in convenience stores, the market is flooded daily with collaboration products that have little relevance to beer. The release of various collaboration products accelerated after May 2020, when Sevenbrau and Daehan Flour Mills collaborated to launch 'Gompyo Wheat Beer,' which caused a shortage and became a hit. As products aimed solely at generating buzz were released like mushrooms after rain, it became difficult for most collaboration products to attract consumer attention unless they were exceptional, leading to reckless planning unrelated to beer taste.

Industry insiders also point out that the priorities have been reversed. A representative from the Korea Craft Beer Association said, "Brands should be established, but only collaborations have taken root." He added, "Originally, collaboration products were part of marketing to supplement the weak brands of craft beer companies, but in reality, the unique taste characteristics of each company's beer fail to be recognized by consumers and end up being consumed merely as entertainment or image."